2015-16 general update
TRANSCRIPT
![Page 1: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/1.jpg)
Welcome to the2015-2016
General Update Course
Should you be here
Non-BIC Brokers and Provisional Brokers must
take this course
Brokers-in-Chargeamp BIC Eligible Brokers
should take the BICUP Course
REQUIRES 90 Attendance
Course Completion Reporting
We are responsible for reporting course completion information to the
NCREC via Internet within 7 days
Todayrsquos Topics
bull Farewell HUD-1 Hello TRID bull Sales of Vacation Rentalsbull Changes to Commission Rules
Contracts and Addendabull Broker Safetybull Licensing and Education
Section 1
Farewell HUD-1Hello TRID
p1
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 2: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/2.jpg)
Should you be here
Non-BIC Brokers and Provisional Brokers must
take this course
Brokers-in-Chargeamp BIC Eligible Brokers
should take the BICUP Course
REQUIRES 90 Attendance
Course Completion Reporting
We are responsible for reporting course completion information to the
NCREC via Internet within 7 days
Todayrsquos Topics
bull Farewell HUD-1 Hello TRID bull Sales of Vacation Rentalsbull Changes to Commission Rules
Contracts and Addendabull Broker Safetybull Licensing and Education
Section 1
Farewell HUD-1Hello TRID
p1
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 3: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/3.jpg)
REQUIRES 90 Attendance
Course Completion Reporting
We are responsible for reporting course completion information to the
NCREC via Internet within 7 days
Todayrsquos Topics
bull Farewell HUD-1 Hello TRID bull Sales of Vacation Rentalsbull Changes to Commission Rules
Contracts and Addendabull Broker Safetybull Licensing and Education
Section 1
Farewell HUD-1Hello TRID
p1
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 4: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/4.jpg)
Course Completion Reporting
We are responsible for reporting course completion information to the
NCREC via Internet within 7 days
Todayrsquos Topics
bull Farewell HUD-1 Hello TRID bull Sales of Vacation Rentalsbull Changes to Commission Rules
Contracts and Addendabull Broker Safetybull Licensing and Education
Section 1
Farewell HUD-1Hello TRID
p1
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 5: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/5.jpg)
Todayrsquos Topics
bull Farewell HUD-1 Hello TRID bull Sales of Vacation Rentalsbull Changes to Commission Rules
Contracts and Addendabull Broker Safetybull Licensing and Education
Section 1
Farewell HUD-1Hello TRID
p1
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 6: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/6.jpg)
Section 1
Farewell HUD-1Hello TRID
p1
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 7: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/7.jpg)
Itrsquos December 10 and you just received a ldquoBuyer Closing Disclosurerdquo from the
attorney for your closing on December 14
The document is 5 pages long and your Buyers are waiting for you to explain it to
them
Are you ready to do that
Scenario 1p1
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 8: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/8.jpg)
Your Buyersrsquo closing is scheduledfor Monday March 23
In order to close on that date your Buyers must receive a Closing
Disclosure by March 19
The clock is tickinghellip
Scenario 2p1
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 9: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/9.jpg)
Your obligations are not changing
There are many similarities between the old and new forms
p2
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 10: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/10.jpg)
ObjectivesAt the end of this section you should be able tobull explain the purpose of the changesbull identify events that trigger the Loan Estimate (LE)bull identify key elements of the Closing Disclosure (CD)bull identify critical dates for delivery of the CDbull explain the brokerrsquos responsibility for LE and CDbull identify issues that may cause closing delays
p2
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 11: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/11.jpg)
Abbreviationsbull CFPB Consumer Financial Protection Bureaubull TRID TILA-RESPA Integrated Disclosuresbull TILA Truth-In-Lending Actbull RESPA Real Estate Settlement Procedures Actbull TIL Truth-in-Lending (Statement)bull GFE Good Faith Estimatebull HUD-1 Settlement Statement bull LE Loan Estimatebull CD Closing Disclosurebull BCD Borrowerrsquos Closing Disclosurebull SCD Sellerrsquos Closing Disclosure
p2
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 12: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/12.jpg)
What WAS the ProblemBEFORE October 2015 Duplicate forms
required by TILA and RESPA
Dodd-Frank was tasked with consolidating the forms
p2
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 13: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/13.jpg)
Hencehellip
HELLO TRID
TILARESPAIntegrated Disclosures
p3
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 14: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/14.jpg)
New Disclosure Forms
GFE Early TIL
Loan Estimate
(LE)
HUD-1 Final TIL
ClosingDisclosure
(CD)
p3
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 15: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/15.jpg)
p4
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 16: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/16.jpg)
p4
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 17: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/17.jpg)
So what does this mean for you as a Broker
p5
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 18: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/18.jpg)
Your obligations are not changing
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 19: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/19.jpg)
New rules apply toLOAN APPLICATIONS
RECEIVEDon or after
October 3 2015
p5
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 20: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/20.jpg)
Whorsquos Responsible
LENDERS are responsible for knowing which transactions are
covered
Real estate brokers should have a GENERAL understanding
Table on page 6 provided for your reference
pp5-6
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 21: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/21.jpg)
May lenders use the new Loan Estimate and Closing Disclosure forms in excluded transactions
(when the forms are not required)
p7
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 22: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/22.jpg)
The HUD-1 ishellip
Stayinrsquo AliveIt will still be used in some transactions
p7
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 23: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/23.jpg)
Which changes requirea new 3-day review of CD
1 APR increases by MORE thanbull 18 for fixed-ratebull 14 for adjustable
2 Prepayment penalty added
3 Basic loan product changes
p8
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 24: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/24.jpg)
The Loan Estimate (LE)
p9
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 25: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/25.jpg)
Are Brokers responsible for the accuracy of the Loan Estimate
NO
p9
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 26: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/26.jpg)
Should Brokers have a general understanding of when their
clients are supposed to be given the Loan Estimate
p9
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 27: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/27.jpg)
The Loan Estimate
Must be given within 3 days of Loan Application
p9
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 28: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/28.jpg)
Loan Application
Borrower has provided
1 legal name2 gross income3 SSN (for credit report)4 property address5 estimate of property value6 amount of mortgage loan requested
p9
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 29: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/29.jpg)
The Loan EstimateA lender may NOT charge a consumer
any fee(s) prior to providingthe Loan Estimate other than
a reasonable fee for ahellip
p10
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 30: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/30.jpg)
Tolerance Limits still applyand are now called
ldquoPermissible Variationsrdquo
Brief explanations of permissible variations are provided on page 10
p10
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 31: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/31.jpg)
Brokersrsquo Responsibility for LE
GENERAL understanding ofhellipbull which
transactions are subject to TRIDbull timing amp purpose
of Loan Estimate
Lenders are responsible for the Loan Estimate
p11
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 32: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/32.jpg)
THE CLOSING DISCLOSURES (CDs)
p11
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 33: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/33.jpg)
If a transaction begins with the OLD forms it will end with the OLD forms
If a transaction begins with the NEW forms it will end with the NEW forms
Reminder TRID rules apply to loan applications received
on or after October 3
p11
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 34: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/34.jpg)
2 Separate Closing DisclosuresBorrower (Buyer) and Seller
Information has not changedItrsquos just been reorganized
p11
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 35: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/35.jpg)
Why are there two separate Closing Disclosure forms
Borrowerrsquos confidential loan
informationis not shared with
Seller
p12
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 36: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/36.jpg)
ldquoWhat HIPAA did to medical offices TRID has done to closing attorney officesrdquo
p13
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 37: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/37.jpg)
Page 1 of HUD-1 is now Page 3 of Buyerrsquos CD
HUD-1 page 1 BCD page 3
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 38: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/38.jpg)
BCD page 3 ndash ALMOST IDENTICAL TO HUD-1
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 39: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/39.jpg)
Page 2 of HUD-1 is now Page 2 of Buyerrsquos CD
HUD-1 page 2 BCD page 2
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 40: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/40.jpg)
BCD page 2 (top half of page)
Loan Fees
Attorney amp Title Fees
POC items
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 41: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/41.jpg)
BCD page 2 (bottom half of page)
Loan Escrows
Recording Fees amp Excise Tax
Brokerage fees
Inspections amp Other Fees
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 42: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/42.jpg)
The Sellerrsquos Closing Disclosure (SCD)
SCD page 1 (sellerrsquos total debits amp credits)
SCD page 2 (sellerrsquos costsexpenses)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 43: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/43.jpg)
SCD page 1 (bottom portion of page)
Total Seller Credits
Total Seller Debits
Broker Info
Settlement Agent Info
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 44: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/44.jpg)
SCD page 2 (bottom portion of page)
Seller CostsDebits amp Seller-Paid Items
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 45: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/45.jpg)
The Biggest Impact for Brokers
The Borrowerrsquos Closing Disclosure must be
RECEIVED BY THE BORROWERat least 3 BUSINESS DAYS
before Settlement
p18
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 46: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/46.jpg)
What is a ldquoBusinessrdquo Day
A Business Day is Monday-Saturday
Sundays and 10 federal public
holidays are excluded
p18
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 47: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/47.jpg)
Definition of ldquoRECEIVEDrdquo
If delivered IN PERSON The CD is ldquoreceivedrdquo on the same day it is provided
If MAILED or delivered ELECTRONICALLYThe CD is ldquoreceivedrdquobull on the 3rd business day after deliveryORbull when lender has EVIDENCE of receipt
p18
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 48: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/48.jpg)
Example
If the BCD is RECEIVED BY THE BORROWER on Monday what is the earliest possible
date settlement may occur
Answer Thursday (unless a federal holiday occurs during the period)
Monday Tuesday Wednesday Thursday
Delivery Day 1 Day 2 Settlement(3rd business day)
p19
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 49: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/49.jpg)
BrokersThe disclosure timeline is
Itrsquos important to educate your clients and customers
p19
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 50: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/50.jpg)
Rules apply to delivery of BCD ONLY
No requirements for delivery of SCD to Seller
p19
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 51: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/51.jpg)
BCD must be delivered to BORROWER
Delivery to Broker Buyer Agentis NOT Sufficient
p19
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 52: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/52.jpg)
If the lender decides to issue2 separate closing disclosures
a broker acting as a dual agent should only give the parties their respective CDs
Buyer should only see the BCDSeller should only see the SCD
p19
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 53: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/53.jpg)
Settlement StatementBroker Obligations
Broker mustDisclose
ANDConfirm Accuracy of
all entries that she has direct knowledge
p21
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 54: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/54.jpg)
Settlement StatementBroker Obligations
Broker mustReview
ANDConfirm Accuracy of
all calculations
p21
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 55: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/55.jpg)
Potential Issuesbull Closings may be delayedbull Tasks will have to be performed
earlier (ex title search)bull Some lenders will create Disclosures
and send to closing attorneys amp attorneys will not be allowed to make changes
p22
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 56: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/56.jpg)
Review and Discuss the Fact Situation
and related Closing Disclosures on pages 23-27
Small Group Exercise
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 57: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/57.jpg)
Section 2Sales of Vacation Rentals
p29
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 58: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/58.jpg)
You discover a ldquoFor Salerdquo sign in the yard of one of the vacation rental
properties you manage
The sign shows the name of another brokerfirm
What should you do
Scenario 1p29
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 59: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/59.jpg)
Yoursquove listed a property that is in high demand The seller tells you he
sometimes uses it as a vacation rental It is not his primary residence
What questions should you ask him
Scenario 2p29
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 60: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/60.jpg)
Your buyers are interested in a mountain home they can use as a
second home and a vacation rental
What questions should you ask the listing agent
Scenario 3p29
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 61: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/61.jpg)
ObjectivesAt the end of this section you should be able to explainbull seller and buyer obligations when a vacation rental
property is soldbull how to handle early termination of the manager-
brokerrsquos agency agreementbull how to disburse trust monies when a vacation rental
property is sold bull the value of communication amp cooperation between
brokers managing amp selling the same property
p30
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 62: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/62.jpg)
Vacation Rental Act (VRA) Applies tohellip
A landlord (person or entity)OR
real estate broker
that manages residential property for vacation rental
VRA applies to ALL owners of residential property used for vacation rentals even if no broker is
involved
p30
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 63: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/63.jpg)
ldquoVacation Rentalrdquobull Rental of residential property
bull Vacation leisure or recreation purposebull Less than ninety (90) days
bull Renter has permanent residence elsewhere
p30
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 64: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/64.jpg)
Handling Monies Related to Vacation Rentals
Owner-Landlords OR Brokershellipbull must deposit advance payments into trust
or escrow account within 3 banking days of receipt
bull may NOT disburse sales or occupancy tax or security deposit prior to end of tenancy or breach by tenant UNLESS refunding to tenant
pp30-31
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 65: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/65.jpg)
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p31
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 66: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/66.jpg)
Tenant Security Deposits (TSDs)bull Cannot post a bond for TSD in lieu of trust
accountbull Telephone and cable television charges may
be deducted (if specified in lease)bull Account to tenant within 45 days
pp31-32
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 67: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/67.jpg)
When a Vacation Rental is SOLD
bull ALL Reservations must be disclosed to prospective buyers
bull Copies of lease agreements must be provided to Buyer within 10 days of closing
bull Buyer must honor lease agreements within 180 days of closing
p32
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 68: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/68.jpg)
Exception
If the Buyer continues to use the same
Broker-Property Manager
the Seller doesnrsquot have to provide lease agreements (because the Broker can
provide them)
p32
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 69: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/69.jpg)
Exception
If the Seller uses a standard lease agreement
the Seller may provide only the unique info from each lease
p32
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 70: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/70.jpg)
If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Property Managerhellip
Within 20 days of closing the Buyer must notify each tenant in writing ofbull date of salebull Buyerrsquos name amp addressbull whether tenantrsquos lease will be honoredbull whether tenant has right to any refund
p32
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 71: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/71.jpg)
Disbursing Moniesin Escrow Account
TenancyOccurs or Ends
Advance Payments
Tenant Security Deposits
1) Less than 180 days after sale
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
3) More than 180 days after sale
that Buyer wonrsquot honorDisburse to tenant
within 30 days of sale Disburse to tenant
within 30 days of sale
2) More than 180 days after sale
but Buyer agrees to honor
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
Transfer to buyer within 30 days
amp mail buyerrsquos info to tenants
p33
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 72: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/72.jpg)
Brokers Managing Vacation Rentalsare subject to
bull Landlord-Tenant Lawbull Vacation Rental Actbull Real Estate License Lawbull Commission Rulesbull Agency Agreement
with Ownerbull Lease Terms
p34
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 73: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/73.jpg)
Release of Advance Payments
The statute permits a broker to disburse some monies to owner prior
to the tenancy but does not require it
p34
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 74: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/74.jpg)
What Monies May Be Released or Paid Out Prior to the Tenancy
bull ldquoAdministrative feesrdquobull Fees owed to third
parties on tenants behalf
bull Maximum of 50 of advance rent
p34
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 75: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/75.jpg)
May a Broker disburse theproperty management (brokerage) fee with other advance payments
YES IFBroker is disbursing partial advance rents to
owner AND
Fee is earned and authorized to be disbursed in the prop mgmt agreement
p34
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 76: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/76.jpg)
ScenarioBrokers policy bull 50 of total rent due at lease signing bull remaining 50 due 30 days prior to tenancy
1 Tenant signs a lease2 Broker pays initial advance rent payment to
owner minus commission 3 Before the tenancy Tenant cancels reservation
and is due a refund OR the owner ceases to own the property
p35
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 77: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/77.jpg)
Scenario Discussion Questions1 What does the law require 2 Who is liable for the 50 rent already paid
to the owner3 Who is liable for brokerage fees paid to the
broker from advance rents prior to the tenancy
p35
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 78: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/78.jpg)
May an owner terminate the property management agreement
prior to the termination date
but there may be consequences
p36
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 79: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/79.jpg)
May the vacation property management agreement contain a
termination penalty
IF IT IS CLEAR AND CONSPICUOUS
p36
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 80: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/80.jpg)
Early Termination FeesMay a seller compel a buyer to use the
sellerrsquos property manager as a condition of the sellpurchase agreement
(NO)
p36
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 81: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/81.jpg)
A brokervacation property manager drives by a property he manages and
discovers a ldquoFor Salerdquo sign in the yard with the name of another company
No one had contacted the broker-property manager regarding the sale
What should he do
p37
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 82: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/82.jpg)
Answer Communicate withthe Owner amp the Listing Firm
p37
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 83: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/83.jpg)
Is it a material fact that a property is being used for long-term or
vacation rentals
p37
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 84: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/84.jpg)
Listing Agents need to knowhellip
bull whether the property is being leasedbull property managerrsquos name amp contact infobull dates of occupancy for any signed leasesbull when the property management
agreement expiresbull whether an early termination fee may be
charged
p37
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 85: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/85.jpg)
Buyer Agents need to knowhellipbull dates of future tenanciesbull whether advance funds have been
collected andor releasedbull whether advance rents have been paid to
owner and if so if broker retained brokerage fees
bull when the property management agreement expires
bull whether funds are being held in escrow
p37
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 86: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/86.jpg)
Standard Forms
REALTORSreg may use Vacation Rental Addendum with standard Offer to Purchase
Non-REALTORSreg may use standard forms with NC BAR logo only (not REALTORreg logo)
REALTORSreg and Owners may use Vacation Rental Agreement
p38
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 87: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/87.jpg)
Monies related toNC vacation rentals must be depositedhellip
bull in trustescrow accountbull in insured bank or savings amp loan
in North Carolina
bull within 3 banking days of receipt
p38
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 88: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/88.jpg)
A Broker managingvacation rental properties
must have awritten property management agreement
with the ownerBEFORE
providing any brokerage services
p39
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 89: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/89.jpg)
bull know the VRAbull deposit monies in a NC-based trust
accountbull transfer monies for rentals in 180 days to
Buyer within 30 days of closingbull refund monies to tenants for rentals that
will not be honoredbull transfer monies if agency agreement is
terminated
Brokers managing vacation rentals musthellipp39
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 90: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/90.jpg)
For Discussionhellip2014 Disciplinary Case
p40
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 91: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/91.jpg)
Section 3Changes to
Commission Rules Contracts and Addenda
p45
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 92: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/92.jpg)
ObjectivesAt the end of this section you should be able to explain
bull changes to Commission Rules and Contracts amp related Addenda
p45
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 93: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/93.jpg)
Commission Rule Changesas of July 1 2015
p45
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 94: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/94.jpg)
Rule A0104 Early Termination Fee
bull May be included in any agency agreement (listing buyer agency or property management agreement)
bull If included must be clearly and conspicuously disclosed on the agreement
p46
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 95: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/95.jpg)
Rule A0104(o) Review
If a Broker has an ownership interest in a property the Broker MAY NOT be a Buyerrsquos Agent for that property
p46
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 96: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/96.jpg)
Rule A0104(o) Exception
Commercial Transactions Only
If broker has less than 25 ownership interest Broker may represent a Buyer
IF Buyer consents after full written
disclosure of brokerrsquos ownership interest
p46
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 97: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/97.jpg)
What is a Commercial TransactionSale or Rental of real property that is
NOT a residential one-to-four unit dwelling
ldquoCommercial Real Estaterdquo defined by Rule A1802 See page 44
p46
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 98: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/98.jpg)
Rule A0105 Advertising
To advertise ALL Brokers musthellip
have the consent of their BICsand
include the names of their BICs andor their firms in all their ads
p46
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 99: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/99.jpg)
Remember You are required to keep copies of
every ad (per Rule A0108)
p47
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 100: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/100.jpg)
Rule A0116 Handling of Trust Money
Before July 1 2015 A Listing FirmBroker was not allowed to hold an EMD check made payable to an escrow agent other than hisher own firm
p47
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 101: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/101.jpg)
As of July 1 2015hellip
A Buyerrsquos Agent or Listing FirmBroker may hold an EMD check made payable to an Escrow Agent other than the Broker or Firm
p47
The check must be delivered to the Escrow Agent within 3 days of contract formation
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 102: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/102.jpg)
What if a Buyer asks for the DDF or EMD check back before
it is delivered
p48
Answer It dependshellipLetrsquos consider 2 different scenarios
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 103: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/103.jpg)
Listing Firm DOES hold earnest money
If Listing Firm still has possession of the checks Listing Firm musthellip deposit EMD into trust account
and return DDF to Buyer
Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Listing Firm)
2 days after effective date of contract Buyer
asks for both checks back
Listing Firm holds both checks throughout
contract negotiationOffer is negotiated and
becomes a contract
pp48-49
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 104: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/104.jpg)
MLS states ldquoListing Firm does not hold earnest money lsquoJane Smith Attorneyrsquo is
Escrow Agentrdquo Buyer Agent delivers offer to Listing Firm
with DDF (payable to seller) and
EMD (payable to Jane Smith Atty)
Listing Firm holds both checks throughout
contract negotiation
Offer is negotiated and becomes a
contract
2 days after effective date of contract Buyer
asks for both checks back
If Listing Firm still has possession of the checks
Listing Firm must return BOTH checks to Buyer
pp48-49
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 105: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/105.jpg)
As long as a Broker holds a checkinstrument payable to the seller
or another escrow agent
the Broker must follow the Buyerrsquos instructions
even after the parties have entered into a legally binding contract
pp48-49
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 106: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/106.jpg)
Sunshine Enterprises Inc Manager Because this entity is a Manager
the entityrsquos officers must be disclosed onwith QRS Realtyrsquos firm license application
Manager(an individual)
Sunshine Properties LLC unlicensed entityMember-Manager
Because Sunshine Properties LLC is a Manager its Managers must be disclosed onwith
QRS Realtyrsquos firm license application
Sally Smithlicensed Broker
Member-ManagerIdentified as QB
John Davis unlicensed individual
Member-Manager
Rule A0502QRS Realty LLC
Submits application for Firm Broker License
pp50-51
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 107: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/107.jpg)
Rule A1711CE Required of Nonresident Brokers
Nonresident Broker must notify the Commission within 10 days ofhellipbull Change in status
of out-of-state license
ORbull obtaining ANY
NC address
p52
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 108: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/108.jpg)
Rule A1711 contrsquod
Brokers NC license will be made INACTIVE in 30 days unlesshellip
Broker proves she completed CE during previous license period (in another state or NC)
Also Once a broker has ANY NC address the Broker must begin taking NC CE
p52
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 109: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/109.jpg)
MOG Disclosurep52
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 110: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/110.jpg)
Which Transactions
bull sales subject to Residential Property Disclosure Act
bull first sale of a dwelling never inhabitedbull lease with option to purchase where
lessee occupies the dwellingbull sale of residential property where parties
agree not to complete a Residential Property and Owner Association Disclosure Statement
p53
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 111: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/111.jpg)
Is the MOG Disclosure required invacant land sales
NO
p53
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 112: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/112.jpg)
WHO must provide MOG and WHEN
Seller must provide MOG to Buyer no later than time of offer Must be signed by SellerBuyer should also sign to acknowledge receipt
p53
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 113: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/113.jpg)
What if MOG is NOT Provided
Buyer may cancel the contractwithin 3 calendar days of contract formation
OR3 calendar days following receipt of disclosure
whichever occurs first
If Buyer cancels due to MOG all deposits should be refunded
p53
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 114: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/114.jpg)
Brokerrsquos Duty for MOGInform owner of legal obligation to provide
the MOG Disclosure Statementand the possible consequences of not
providing it
p53
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 115: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/115.jpg)
p53
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 116: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/116.jpg)
Revisions toSales Contracts amp Addenda
p56
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 117: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/117.jpg)
Offer to Purchase amp Contract (Form 2-T)bull Blank initial lines will
not invalidate contractbull Fixtures Provision
Rewrittenbull Buyer amp Seller
authorizations regarding closing disclosures
bull Seller must provide loan payoff info
bull Seller responsible for paying certain HOA charges
bull Use of Electronic Meansbull DateTime defined as
datetime of day in NCbull Statement to confirm
that contract is binding when signed and communicated
bull Deletion of ldquoSealrdquo next to Signatures
bull Acknowledgement for receipt of DDF
pp56-57
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 118: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/118.jpg)
Revised Addenda
bull 2A11-T Additional Provisions Addendumbull 2A12-T Ownersrsquo Association
Disclosure and Condominium Resale Statement Addendumbull 4-T Agreement to Amend Contract
pp57-58
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 119: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/119.jpg)
Section 4 Safetyp59
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 120: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/120.jpg)
You have a listing that hasnrsquot attracted many showings
You receive a call from a prospective buyer who claims to be sitting in his car in front of the listing He says he is a cash buyer
and wants to close in two weeks He would like to see the property
immediatelyWhat would you do
Scenario 1p59
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 121: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/121.jpg)
Yoursquove scheduled an open house for Sunday afternoon The home is
located in a popular neighborhood and is occupied
What steps will you take to prepare for the open house
What IS a ldquosafe open houserdquo
Scenario 2p59
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 122: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/122.jpg)
Learning Objectives
At the end of this section you should be able to
describe various safety skills and strategies for real estate brokers
p59
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 123: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/123.jpg)
Develop Situational Awarenessp59
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 124: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/124.jpg)
Every Broker Office amp Firm should have a Safety Policy
p60
Safety Video
![Page 125: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/125.jpg)
Safety Video
![Page 126: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/126.jpg)
Safety Tip 1Identify the consumer
Be suspicious
p60
Safety Tip 2Always leave your Itinerary
p60
Safety Tip 3Have a fully charged cell phone
and have it readily available
p61
Safety Tip 4Have a Prearranged Distress Code
p61
Safety Tip 5Implement a Buddy System
p61
Safety Tip 6Practice Vehicle Safety
p61
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 127: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/127.jpg)
Safety Tip 2Always leave your Itinerary
p60
Safety Tip 3Have a fully charged cell phone
and have it readily available
p61
Safety Tip 4Have a Prearranged Distress Code
p61
Safety Tip 5Implement a Buddy System
p61
Safety Tip 6Practice Vehicle Safety
p61
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 128: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/128.jpg)
Safety Tip 3Have a fully charged cell phone
and have it readily available
p61
Safety Tip 4Have a Prearranged Distress Code
p61
Safety Tip 5Implement a Buddy System
p61
Safety Tip 6Practice Vehicle Safety
p61
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 129: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/129.jpg)
Safety Tip 4Have a Prearranged Distress Code
p61
Safety Tip 5Implement a Buddy System
p61
Safety Tip 6Practice Vehicle Safety
p61
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 130: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/130.jpg)
Safety Tip 5Implement a Buddy System
p61
Safety Tip 6Practice Vehicle Safety
p61
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 131: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/131.jpg)
Safety Tip 6Practice Vehicle Safety
p61
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 132: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/132.jpg)
Safety Tip 7Walk Behind
p61
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 133: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/133.jpg)
Safety Tip 8Dress for Safety and Success
p61
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 134: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/134.jpg)
Safety Tip 9Conduct safe personal marketing and be careful how you use social media
p62
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 135: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/135.jpg)
Safety Tip 10Conduct safe open houses
p62
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 136: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/136.jpg)
Safety Tip 11p62
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 137: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/137.jpg)
p62
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 138: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/138.jpg)
Section 5Licensing and Education Review
p63
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 139: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/139.jpg)
My parents want to buy a beach house near Wilmington Theyrsquove
asked me to be their buyerrsquos agent Irsquove had a license for more than 10
years but I havenrsquot taken any CE for the last 4 years
Can I represent them
Scenario 1p63
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 140: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/140.jpg)
Irsquove decided to stop practicing brokerage on a day-to-day basis but I want to be able to get referral fees
Will I still need to pay the $45 renewal fee each yearWill I need to take CE
Scenario 2p63
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 141: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/141.jpg)
Objectives
At the end of this section you should be able to explain
bull license categoriesbull license renewal requirementsbull CE requirementsbull BIC requirements
p63
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 142: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/142.jpg)
License Categories
bull Broker LicensendashProvisional BrokerndashBrokerndashBroker-In-Charge
bull Firm License
bull Limited Nonresident Commercial License
p64
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 143: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/143.jpg)
Expired or Inactive =NO BROKERAGE ALLOWED
(including referral fees)
p64
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 144: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/144.jpg)
Current vs Expired License
CURRENT $45 renewal fee wasRECEIVED by the Commission
ON OR BEFORE JUNE 30
p65
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 145: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/145.jpg)
Current vs Expired License
EXPIREDRenewal fee was not
received on time
EXPIRED = NO LICENSE
p65
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 146: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/146.jpg)
Reinstatement
Can reinstate within 6 months by paying $55Deadline December 31 of expiration year
If expired more than 6 monthshellipSubmit application with fee amp criminal
background checkAND
Complete additional education andor exam
p65
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 147: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/147.jpg)
ReinstatementAdditional Education Requirements
bull PB expired 6 mos-5 yrs bull Broker expired 6 mos-2 yrsbull Broker expired 2 yrs-5 yrsbull PB OR Broker expired more than 5 years
p65
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 148: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/148.jpg)
Active vs InactiveACTIVE = Up-to-date on CE andor
Postlicensing EducationINACTIVE = Education Deficiency (or a PB with
no BIC affiliation)
p66
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 149: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/149.jpg)
UPDATE Non-BIC Brokers amp Provisional Brokers take GenUp
BICs or BIC-Eligible Brokers take BICUP
AND
ELECTIVE
EVERY LICENSE YEAR
CE Requirementp66
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 150: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/150.jpg)
All CE must be completed by June 10
What happens if you miss the June 10
deadlineInactive on July 1
Continuing Educationp66
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 151: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/151.jpg)
You didnrsquot take CE for the past 4 years Now you want to activate your
license What must you do
1 Complete current yearrsquos CE2 Take elective courses to make up missed
hours from last year (4 or 8 hours)AND
3 Submit license activation form (REC 208)
p66
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 152: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/152.jpg)
On your own or with a partnerhellipAnswer the 3 questions on page 67
p67
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 153: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/153.jpg)
REALTORreg Code of Ethics Training
Quadrennial training deadline December 31 2016
Applies to REALTORreg-members only(not a Commission requirement)
Call your local board or associationor visit wwwrealtororg for information
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 154: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/154.jpg)
The only license category that requires brokerage experience
Broker-in-Chargep68
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 155: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/155.jpg)
bull Active Status and NOT Provisionalbull 2 years full-time brokerage experience
within past 5 yearsbull Complete 12-hour BIC course within 120
days of declaration (unless taken within the preceding 3 years)
Broker-in-ChargeQualification Requirements
p68
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 156: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/156.jpg)
Your license record will showldquoBIC Eligiblerdquo status AFTER
1 Yoursquove satisfied all BIC qualification requirements
2 Yoursquove submitted and NCREC has processed your BIC Declaration Form
3 Yoursquove taken the 12-hour course on time
p68
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 157: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/157.jpg)
To Maintain BIC Status-Eligibilityhellip
Renew your license on time($45 by June 30)
ANDTake appropriate CE on time
(BICUP and one Elective by June 10)
p69
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 158: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/158.jpg)
1 Return to Active Current Status2 Submit Activation Form (REC 208)3 Attend 12-hour BIC Course4 Submit BIC Declaration Form (REC 204)
Next Submit affiliation forms for all Brokers amp PBs
To Regain BIC StatusEligibilityp69
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-
![Page 159: 2015-16 General Update](https://reader031.vdocuments.us/reader031/viewer/2022011722/58f0643b1a28ab0e598b45e7/html5/thumbnails/159.jpg)
Thanks for your participation
coming your way
- Welcome to the 2015-2016 General Update Course
- Should you be here
- REQUIRES 90 Attendance
- Course Completion Reporting
- Todayrsquos Topics
- Section 1 Farewell HUD-1 Hello TRID
- Slide 7
- Slide 8
- Your obligations are not changing
- Objectives
- Abbreviations
- What WAS the Problem
- Hencehellip
- New Disclosure Forms
- Slide 15
- Slide 16
- So what does this mean for you as a Broker
- Your obligations are not changing (2)
- Slide 19
- Whorsquos Responsible
- May lenders use the new Loan Estimate and Closing Disclosure fo
- The HUD-1 ishellip
- Which changes require a new 3-day review of CD
- The Loan Estimate (LE)
- Are Brokers responsible for the accuracy of the Loan Estimate
- Should Brokers have a general understanding of when their clien
- The Loan Estimate
- Loan Application
- The Loan Estimate (2)
- Tolerance Limits still apply and are now called ldquoPermissible Va
- Brokersrsquo Responsibility for LE
- Slide 32
- Slide 33
- 2 Separate Closing Disclosures Borrower (Buyer) and Seller
- Why are there two separate Closing Disclosure forms
- Slide 36
- Slide 37
- Slide 38
- Slide 39
- Slide 40
- Slide 41
- Slide 42
- Slide 43
- Slide 44
- The Biggest Impact for Brokers
- What is a ldquoBusinessrdquo Day
- Definition of ldquoRECEIVEDrdquo
- Example
- Slide 49
- Rules apply to delivery of BCD ONLY No requirements for delive
- BCD must be delivered to BORROWER
- Slide 52
- Settlement Statement Broker Obligations
- Settlement Statement Broker Obligations (2)
- Potential Issues
- Review and Discuss the Fact Situation and related Closing Disc
- Section 2 Sales of Vacation Rentals
- Slide 58
- Slide 59
- Slide 60
- Objectives (2)
- Vacation Rental Act (VRA) Applies tohellip
- ldquoVacation Rentalrdquo
- Handling Monies Related to Vacation Rentals
- What Monies May Be Released or Paid Out Prior to the Tenancy
- Tenant Security Deposits (TSDs)
- When a Vacation Rental is SOLD
- Exception
- Exception (2)
- If the Buyer DOES NOT continue to use the Sellerrsquos Broker-Prope
- Disbursing Monies in Escrow Account
- Brokers Managing Vacation Rentals are subject to
- Release of Advance Payments
- What Monies May Be Released or Paid Out Prior to the Tenancy (2)
- May a Broker disburse the property management (brokerage) fee w
- Scenario
- Scenario Discussion Questions
- May an owner terminate the property management agreement prior
- May the vacation property management agreement contain a termin
- Early Termination Fees
- Slide 81
- Slide 82
- Slide 83
- Listing Agents need to knowhellip
- Buyer Agents need to knowhellip
- Standard Forms
- Monies related to NC vacation rentals must be depositedhellip
- Slide 88
- Brokers managing vacation rentals musthellip
- For Discussionhellip 2014 Disciplinary Case
- Section 3 Changes to Commission Rules Contracts and Addenda
- Objectives (3)
- Commission Rule Changes as of July 1 2015
- Rule A0104 Early Termination Fee
- Slide 95
- Rule A0104(o) Exception
- What is a Commercial Transaction
- Rule A0105 Advertising
- Slide 99
- Rule A0116 Handling of Trust Money
- As of July 1 2015hellip
- What if a Buyer asks for the DDF or EMD check back before it is
- Listing Firm DOES hold earnest money
- MLS states ldquoListing Firm does not hold earnest money lsquoJane Sm
- Slide 105
- Rule A0502
- Rule A1711 CE Required of Nonresident Brokers
- Rule A1711 contrsquod
- MOG Disclosure
- Which Transactions
- Is the MOG Disclosure required in vacant land sales
- WHO must provide MOG and WHEN
- What if MOG is NOT Provided
- Brokerrsquos Duty for MOG
- Slide 115
- Revisions to Sales Contracts amp Addenda
- Offer to Purchase amp Contract (Form 2-T)
- Revised Addenda
- Section 4 Safety
- Slide 120
- Slide 121
- Learning Objectives
- Develop Situational Awareness
- Every Broker Office amp Firm should have a Safety Policy
- Safety Video
- Safety Tip 1 Identify the consumer Be suspicious
- Safety Tip 2 Always leave your Itinerary
- Safety Tip 3 Have a fully charged cell phone and have it read
- Safety Tip 4 Have a Prearranged Distress Code
- Safety Tip 5 Implement a Buddy System
- Safety Tip 6 Practice Vehicle Safety
- Safety Tip 7 Walk Behind
- Safety Tip 8 Dress for Safety and Success
- Safety Tip 9 Conduct safe personal marketing and be careful h
- Safety Tip 10 Conduct safe open houses
- Safety Tip 11
- Slide 137
- Section 5 Licensing and Education Review
- Slide 139
- Slide 140
- Objectives (4)
- License Categories
- Slide 143
- Current vs Expired License
- Current vs Expired License (2)
- Reinstatement
- Reinstatement Additional Education Requirements
- Active vs Inactive
- CE Requirement
- Continuing Education
- You didnrsquot take CE for the past 4 years Now you want to activa
- On your own or with a partnerhellip Answer the 3 questions on page 6
- REALTORreg Code of Ethics Training
- Broker-in-Charge
- Broker-in-Charge Qualification Requirements
- Your license record will show ldquoBIC Eligiblerdquo status AFTER
- To Maintain BIC Status-Eligibilityhellip
- To Regain BIC StatusEligibility
- coming your way
-