Informational Bulletins
Published to address operational and technical issues and highlight best practices. These are not declaratory in nature but rather serve a clarifying/educational role in terms of the Division’s expectations concerning the law and regulation. Nevada’s real estate industry takes them to be directional in nature and rely on this clarifying guidance concerning their business practices and educational materials.

Position Statements
Regulatory positions of the Division, Division Administrator, and the Commission. Equivalent in scope and impact to Advisory Opinions. Usually prepared in consultation with the Nevada Attorney General’s Office and serves to clarify the standard that will be enforced. These position statements may encompass any area of law/regulation under the Division’s jurisdiction.

Source:  Nevada Real Estate Division – Administrator 
May 17th, 2021

36 hrs. CE Salesperson renewal:
3 hrs.  Agency
6 hrs.  Contracts                                 
3 hrs.  Ethics                               
3 hrs.  Nevada Law
3 hrs.  Risk Reduction
18 hrs.  Any Designated Areas

36 hrs.  Broker & Broker Salesperson Renewal:
3 hrs.  Agency
6 hrs.  Contracts
3 hrs.  Ethics
3 hrs.  Nevada Law
3 hrs.  Risk Reduction
6 hrs.  Broker Management
12 hrs. Any Designated Areas

Note:  Property Management & Business Broker permit holders must complete the CE required for the renewal of their permit(s).  Property Management Permit Continuing Education has increased from 3 Hrs. to 9 Hrs.  Business Broker permit holder CE requirements remain at 3 hrs.  Those requirements do not add to the total 36 hrs. necessary to renewal both license and permit(s).

ATTENTION!  NEW Limited Continuing Education (CE) Exemptions – Licensees who are 65 years or older AND have been licensed in Nevada in good standing for
30 years or more may apply for an exemption to complete a reduced number of CE credits required for renewal.

12 hrs. Salesperson Renewal:
3 Hrs. Agency
3 Hrs. Contracts
3 Hrs. Ethics
3 Hrs. Nevada Law

15 Broker and Broker-Salesperson Renewal:
The 12 core courses/hours above plus 3 hrs. Broker Management

Property Management permit holders add 9 hrs. of property management.
Business Broker permit holders add 3 hrs. of business broker 

Click Here For My Class Calendar

Not too long ago, a potential client asked about drafting form agreements specifically designed to improve the odds at double escrowing property. The potential client was intent on purchasing real property, and either assigning the purchase rights, or selling the property outright to third parties with or without the other party’s knowledge. In response, I explained my definition of a “double escrow” (also known as “simultaneous closing”) to ensure we were on the same page: a situation in which a buyer, while under contract to purchase property, enters into a subsequent agreement to either (1) assign his contract to purchase that same property to a third-party purchaser, or (2) sells the property to the third-party purchaser, while arranging for both escrow closings to occur simultaneously. In this way, the buyer can potentially earn a profit by finding another party who is willing to pay more for the property, yet avoid the risks of investing the money needed to purchase the property.

The potential client said “exactly.” Due to the small investment necessary to perform a double escrow, these transactions are a favorite of many “educational programs” that promise their students will “get rich quick” investing in real estate, and this potential client might have been following this path. Thus, whether or not a licensee can engage in such transactions and what disclosures must be made and to whom must be part of the analysis.

There is nothing inherently wrong with arranging a double escrow, simultaneous closing or assignment of a purchase agreement (all of which have nearly the same results). Nevertheless, the transactions have a bad reputation because neither the original seller nor the final buyer are pleased that they could have sold at a higher price, or purchased at a lower price, and that they lost thousands to some investor who may never have intended to buy the property in the first place. Moreover, transactions discussed in the news, case law or social media often involve unscrupulous real estate brokers or licensees, who misuse information gained in their fiduciary capacity to buy low from one client and sell high to another. In fact, our Nevada Supreme Court has even defined the term “double escrow” as transactions involving such unscrupulous licensees:

In a “double escrow,” the broker or salesman purchases a principal’s property in the first escrow, and sells it to a third party at a profit in a second escrow without a full disclosure to both the principal and the third party. The escrows close at the same time and the broker or salesman thereby uses the proceeds from the sale in the second escrow to purchase his principal’s property. The broker or salesman receives a commission on the sale in the first escrow and a secret profit on the closing in the second escrow. Alley v. Nevada Real Estate Division, 94 Nev. 123, 124-125 (1978).

In the Alley case, the lower court affirmed the Nevada Real Estate Division’s decision to permanently revoke the broker’s license for secretly receiving part of a $2,000 profit by using a “double escrow scheme.” The Nevada Supreme Court affirmed the decision focusing on a prior case where the court denounced such schemes due to the failure to make full disclosures to the principal and the third party. Specifically, the Court in the Alley case upheld the revocation of the broker’s license because: The law does not allow the agent who also has a right to purchase to wait until someone makes an offer of an amount in excess of the agreed purchase price and then elect to purchase the property at the lesser price without informing the owner of the higher offer, and, after the agent has obtained the consent from the owner to buy the property, then immediately sell it for the higher price as his own property. Alley v. Nevada Real Estate Division, 94 Nev. 123,125 (1978)

Obviously, such conduct is not legal, and we all know that licensees are prohibited from engaging in similar fraudulent conduct like that discussed above. However, if a licensee told the truth, made the required disclosures, acted as a principal, and funneled all of their profits through their broker, would their conduct still constitute a violation of Nevada Revised Statutes’ Chapter 645? Interestingly, my friend, Steve Kitnick (www.NevadaCE.com) informed me of two cases recently decided by the Nevada Real Estate Commission that might provide an answer. Although violations were found in those cases, they offered a lot of insight into the way Nevada Real Estate Division and Nevada Real Estate Commission view such transactions. In part 2 of “Dangers of the Double Escrow,” I will describe what occurred in those cases and provide some analysis to help answer the question.

Attorney Darren Welsh, Esq. April 24, 2013

Darren Welsh Blog – Berkshire Hathaway HomeServices, Nevada Properties

Waiving Your Rights in a Residential Sale in Nevada

The Nevada Seller’s Real Property Disclosure Form (SRPD) has changed effective March 8, 2013.  The changes clarify the section warning “purchaser may not waive the requirement to provide this form and a seller may not require a purchaser to waive this form,” per NRS 113.130(3) removing the former citation of the Senate Bill 34 (3) / Senate Bill 314. It kept the “type of seller” can be selected from a Bank, an Asset Management Company, Owner-Occupied, or Other.”

I want to take this time to address Waiver of Rights in a Nevada residential real estate transaction, specifically the Buyer’s Waiver of Remedy under of NRS 113.150.

The issue is that even though a seller may not require a purchaser to waive the receipt of the SRPD per NRS 113.130(3), a buyer may waive any of her rights as to remedies under NRS 113.150.  Section 150 is where the Buyer finds their remedies for a non-disclosure.

Although the law says the Seller cannot force a Buyer to waive the right to receipt, if the Seller does not provide the SRPD, the transaction may still close. More importantly, a Seller can simply avoid the subject of not providing the form and focus on getting the Buyer to waive the remedies of the non-performance by a Seller.

As described in the form Buyer’s Remedy Waiver of NRS 113.150 Rights:  The Buyer may waive their right to:

1. rescind the purchase pursuant to NRS 113.150(1) This means although the buyer cannot be forced to waive the right to receive the SRPD form, they can waive their right to cancel the transaction because they did not receive the form. This waiver is the least potentially damaging to a buyer. If a seller is “demanding” as a contingency that this form be signed, number 1 is the safest for a buyer to check.  The reason is that a buyer can still conduct their own inspection and find a defect and cancel the transaction per NRS 113.150(2), subject to the terms of the purchase agreement.
   
2. rescind the purchase agreement pursuant to NRS 113.150(2)(a) This means although the buyer cannot be forced to waive the right to receive the SRPD form, they can waive their right to cancel the transaction even if they are informed of a new defect during escrow.  Remember NRS 113.150(2) is when…before the conveyance of the property to the purchaser a seller informs the purchaser of a defect in the property of which the cost of repair or replacement was not limited by provisions in the agreement to purchase the property… This is potentially more damaging to a Buyer.  As described above, checking number 1 on the Buyer’s Waiver of Remedy form still allows the Buyer the chance to cancel if they are informed of a new defect.  By waiving this right in #2, the Buyer is potentially not able to cancel the transaction without penalty even if the Seller discloses a new material defect during escrow.
   
3. recover from the Seller three times the amount necessary to repair or replace any defect per NRS 113.150(4).  This means although the buyer cannot be forced to waive the right to receive the SRPD form, they can waive their right to collect treble damages.  This waiver is powerful.  It eliminates the Buyer’s ability to pursue treble damages as described in my March 2012 entry, Disclosure In Real Estate Sales, As Is, NRS 113, Treble Damages, basically nullifying the clarification the Nevada Supreme Court describes in Webb v. Shull.  If a seller is “demanding” as a contingency that this form be signed, number 1 is the safest for a buyer, number 2 the next safest, number 3 is highly suspect.  Arguably a seller could not disclose, perhaps even intentionally, and not be held liable.
   
4. All of my legal rights under NRS 113.150.  This means although the buyer cannot be forced to waive the right to receive the SRPD form, they can waive their right to cancel the transaction because they did not receive the form; they can waive their right to cancel the transaction even if they are informed of a new defect during escrow and they can waive their right to collect treble damages.

Permission was granted to re-post this blog by Darren Welsh, Esq. on July 17, 2020.  Mr. Welsh stated the information contained in his article is “still the law.”

Live instruction now includes method(s) of course delivery where the instructor and the students interact in real-time, either at the same physical location (classroom instruction is where the instructor is alive and the student is alive and both instructor and student are in the same classroom together) or through the use of digital technology. Put another way, live stream video conferencing is now considered to be “live classroom instruction.”  It is not to be confused with online courses.  Online courses are a form of “distance learning.”

Other delivery methods of distance education include:
• Internet: web-based content requiring the use of a computer and network browser. Sponsor provides student with a login to access the course material electronically.
• Correspondence: usually refers to a printed workbook being provided to the student and does not require the use of a PC/laptop or any other digital or electronic equipment.
• CBT or computer-based technology: this refers to written or pre-recorded course content provided on a CD or DVD which may be played back on a computer or DVD-player without the need to go online.• Video: this would include pre-recorded audio/visual instruction to be viewed using conventional VHS/VCR-type equipment. 

Source:  Real Estate Division Course Manual:  A reference guide for real estate education providers on the requirements for education programs and the course application process.

The regulation that you must take at least half of your continuing education requirements in a live classroom setting still applies.  However, digital technology delivery is now considered as live classroom instruction!

License Renewal Requirements
Real Estate Salesperson
Real Estate Broker-Salesperson
Real Estate Broker
Permit Renewal Requirements
Business Broker Permit
Property Manager

IMPORTANT ANNOUNCEMENTS
3/27/2020 NRED Post-Licensing & Continuing Education Guidance
3/23/2020 NRED NEW Guidance – Renewal Extensions
3/13/2020 Temporary Licensing Guidance in Response to COVID-19

 

1. Licensees renewing in March and April must still pay their renewal fees online in the month it is due.  The licensee can request an extension for completing their CE classes until May 2020 using the form provided by NRED. 

2.  Any person who has passed RE exam and has all other requirements will not be able to process an application for a real estate license until the NRED is accepting snail mail or open their office for business.

3. Any licensee wishing to terminate from a brokerage and transfer to another brokerage will be unable to do so until the NRED is accepting snail mail or open their office for business.

4.  A licensee may terminate from a brokerage and snail mail their termination to the NRED who will process the termination whenever the NRED resumes snail mail operations.

5.  A broker may terminate a licensee from their brokerage and snail mail the termination to the NRED who will process the termination whenever the NRED resumes snail mail operations.

Source:  Steven Kitnick & Jan O’Brien  03/24/2020

Source: March 5th, 2020 E-mail. Permission to Post was granted by Mr. Holle.