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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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 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

>

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

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

>

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 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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

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

>

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

Develop Situational Awarenessp59

Every Broker Office amp Firm should have a Safety Policy

p60

Safety Video

>

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

Every Broker Office amp Firm should have a Safety Policy

p60

Safety Video

>

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

Safety Video

>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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