Audit Program: A Guide to Real Estate Audits in Nova Scotia
View the Audit Program: A Guide to Real Estate Audits in Nova Scotia HERE(revised December 2019)
Audit Program with highlighted changes (added December 2019)
Audit Program summary of changes (added December 2019)
Past Bulletins Regarding Audit Program
December 16, 2019—Message from the Chair
October 10, 2019—Message from the Chair
April 16, 2019
November 9, 2018
October 5, 2018
September 14, 2018
Helpful Resources
IMPORTANT: BROKERAGE AUDIT RATINGS SUSPENDED FOR 2019. For more information, click here.
Adding a Second Buyer to an Agreement of Purchase and Sale Procedure
Audit Transition Period
Buyer Brokerage/Designated Brokerage Remuneration Procedure
Do's and Don'ts of Struck Clauses
Questions and Answers by Topic
General
Exempted Files
Transaction File Review
General
1. Would two different ratings from a brokerage audit (e.g. “Needs Improvement” transaction file review, “Good” trust) ever result in just a transaction file review portion of an audit being done?
NO. One of the two types will always be done, either a trust audit or a brokerage audit (and a brokerage audit, by definition, always includes a trust audit).
2. When hiring a new salesperson, will a broker have access to the salesperson's "less than good" audit results from their previous brokerage if the salesperson's non-compliance had not yet reached the formal discipline stage?
NO. Only formal discipline results are on a licensee's file and available to the public for inquiry.
Exempted Files
1. Does a broker need to identify to the auditor, up front, any file that they want to be considered for exemption?
NO. If the file is not randomly selected as part of the sample, there is no need to identify.
2. Can part (certain discrepancies) of a file be exempted?
NO. The auditor will assess if documentation is sufficient overall to exempt the file. If it is not then the file and all of its discrepancies are included in the audit results (no partial exemption).
3. If a file is selected by the auditor for review and it contains sufficient notes from the broker to support the requested exemption from the brokerage ratings, will the auditor then select another file for review for that licensee to replace the exempted one?
NO. If a file meets the threshold of exemption, it will be counted as a compliant file for the purposes of the broker’s audit rating. However, as a result, if an investigation is initiated by the Registrar for that licensee’s conduct that file and other files facilitated by that licensee may be investigated further.
4. When considering a file for an exemption, will the efforts by the administrative staff be considered part of the compliance process? For example: if there are three requests for missing documents or initial from the transaction administrator, followed by a request from the broker and meeting notes signed by the licensee; would that be considered five attempts?
YES, as long as the administrative staff is not in violation of the Nova Scotia Real Estate Trading Act or Bylaw (meaning they are not advising a licensee how to draft a clause, etc.) their attempts will count as corrective action.
Transaction File Review
1. Are terminated files held to the same standard as closed files?
YES, unless the termination clearly preceded the requirement (e.g. not required to have supplementary documents in a file if they were not due until a date later than the termination).
2. Are condo documents expected to be in the file as supplementary documents even if they are hundreds of pages?
NO. The auditor will assess if documentation is sufficient overall to exempt the file. If it is not then the file and all of its discrepancies are included in the audit results (no partial exemption).
3. Is signing of a new Working with the Real Estate Industry form required each time a new Seller Brokerage Agreement or Buyer Brokerage Agreement is signed for an ongoing client? If not, what is the acceptable time period for a previously signed Working with the Real Estate Industry form?
NO. The same Working with the Real Estate Industry form can be used and there is no restrictions on time.
4. How will the circumstance of an auditor mistakenly think an item from a file is missing be prevented? Can there be a policy whereby the auditor will make note of these and set these files aside to review with the broker together to confirm if an item is actually missing?
NO. Auditors are instructed to look at the file three times when noting an item is missing. In the event the broker is disputing this, they can email the Compliance Manager or the Registrar. Upon review of the auditor’s notes it may receive a different outcome however, it is more probable it will remain as missing.
5. If an auditor finds a certain discrepancy in a file which affects another brokerage, will the related file at the other brokerage be flagged for inclusion in their audit?
NO. The audit samples are selected independently. Only in cases where something serious is found resulting in an investigation would a brokerage be impacted by what was found in the audit of another brokerage.
6. When there are issues at closing (or close to closing) and the issues are handled between lawyers, how are the brokerages to record any changes in their files?
If an Amendment by all parties or their respective lawyers cannot be obtained by the brokerage, clearly document what took place and describe what the lawyers are handling (e.g. the Amendment, etc.)
7. If discrepancies in an Agreement of Purchase and Sale are corrected in a Counter Offer or Amendment, will discrepancies be attributed to either brokerage during their respective audits?
NO. Regardless of which brokerage initiated the fix, the fact that the discrepancies were corrected means that there are no longer audit discrepancies.
8. If the striking out of a clause obscures the words of the clause, will this be a discrepancy right away?
YES, this will be a discrepancy. The new audit program is being applied consistently for all audits starting January 1, 2019. There is no "grace period" for individual file requirements identified in the guide. Further, whiting out or obscuring a clause in any way which restricts the legibility was never permitted.
