Audit Update, Escalation Clauses & Mandatory CPE Course for 2020-2021
Notice to Brokers: Audit Update
Modified Trust Audits
In response to the pandemic restrictions, the NSREC’s Board of Directors adjusted the audit policy to conduct modified trust audits. Brokers who are scheduled for a trust audit will receive a modified trust audit in 2021. In the audit notification, the auditor will specify a list of items that the broker must send to the auditor electronically. Brokers, please provide only the items specified.
Modified Brokerage Audits
In December 2020, the Board introduced modified brokerage audits. These will continue into 2021. Brokers who were scheduled for a brokerage audit in 2021 will receive a modified brokerage audit. In the audit notification, the auditor will specify a list of items that the broker must send to the auditor electronically. This will include a limited number of transaction files and trust items. Brokers, please provide only the items specified. For the transaction file review of the brokerage audit, a rating will not be issued, but the broker will be provided with a list of discrepancies, if any, identified in each transaction file.
Escalation Clauses Do Not Comply With the Act
This is a reminder to the industry that the use of escalation clauses in an Agreement of Purchase and Sale (APS) violates Section 30 (d) of the Real Estate Trading Act, therefore licensees cannot use them when preparing offers. An escalation clause is a formula used in place of an actual purchase price, i.e. $X amount over the highest price offered in competing APSs.
To view the Real Estate Trading Act, click HERE.
Mandatory CPE Course for 2020-2021: All About Offers: Relationships, Contracts, Communication & Disclosure
Licensees are required to complete the online course, All About Offers: Relationships, Contracts, Communication & Disclosure by June 15, 2021. This online course reviews important concepts relating to real estate offers and uses a recent, real life case to explore their application in a complex residential offer situation.