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The Nevada Law and Reference Guide a Legal Resource Guide for Nevada Real Estate Licensees

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The Nevada Law and Reference Guide a Legal Resource Guide for Nevada Real Estate Licensees Nevada Real Estate Division The Nevada Law and Reference Guide A legal resource guide for Nevada real estate licensees. FOURTH EDITION, 2014 FUNDED BY THE REAL ESTATE EDUCATION & RESEA R CH FUND AUTHO R IZED BY THE NEVADA REAL ESTATE COMMISSION NEVADA REAL ESTATE DIVISION, DEPT . O F BUSINESS & INDUST R Y Nevada Real Estate Division The Nevada Law and Reference Guide A legal resource guide for Nevada real estate licensees. This work is published by the NV RED in both electronic and hardcopy formats. © 2008 Nevada Real Estate Division, Department of Business & Industry, State of Nevada. (NRS 218.698 and NRS 344.070 (2006)). This work may be reproduced in whole or in part provided there is no alteration or editing of the material and provided that an appropriate credit line and copyright notice are included. No part of this work may be repackaged, reformatted, or modified either electronically or by any other means, by the addition or removal of any material, information, artwork, design work, images or text. First edition published 2008. Second edition published 2010. Third edition published 2012. Fourth edition published 2014. ACKnowledgements Funding for this project was provided Sarah Zita, of Zita Group, Inc., by the Nevada Real Estate Division, Las Vegas, Nevada, designed and provided Department of Business & Industry, State the wonderful graphics, photographs, of Nevada, through the Nevada Education layout, formatting, technical and editorial Research and Recovery Fund. corrections, and the artwork. The beauty and functionality of the Guide is all her. The Guide was conceived and given its nativity under the auspices of Nothing of this scope is possible without Gail J. Anderson, Real Estate Division extensive review. The written material Administrator (2002-2007), and the was reviewed by the late Gail Brown 2005-2006 Nevada Real Estate Fox, long-time corporate broker in Clark Commissioners: Benjamin Green, Washoe County; Matt D’Orio, formerly Education/ County; Lee Gurr, Elko County; Curry Information Officer with the Real Estate Jameson, Washoe County; Charlie Mack, Division; Lee Gurr, previous NV Real Clark County; and Beth Rossum, Clark Estate Commissioner and broker/owner; County. The format, chapter topic Deanna Rymarowicz, Esq., legal counsel suggestions and problem areas were for the Greater Las Vegas Association of identified with a series of round table Realtors®; Ben Scheible, Esq., author and discussion groups composed of real estate real estate educator; and Robert Aalberts, JD. industry practitioners. Their insight and professor of law at UNLV, who was also a comments when the project was just member of the review committee. Current beginning were invaluable. RED Administrator Ann M. McDermott, along with Safia Anwari, Education & Debra March, Executive Director of Information Officer of the Real Estate The Lied Institute of Real Estate Division, reviewed and edited the text Studies, College of Business of the to ensure its timeliness. The University of Nevada, Las Vegas, served Real Estate Division would like to as administrative project manager. acknowledge the contribution of Bruce Her extensive background in real Alitt, Chief Investigator, in reviewing estate education and administration/ and suggesting edits management kept the project moving forward. Finally, much thanks goes to the current Commissioners and Real Estate Division Melody L. Luetkehans, JD, researched Administrator for seeing this project and wrote the Guide under contract through to its finalization: with the Lied Institute. Previously, she RED Administrator Ann M. McDermott; was General Counsel for the Nevada Beth Rossum, Commission President, from Association of Realtors® and manned their Clark County; Janice Copple, Legal Hotline for years. She continues vice-president, Washoe County; Bert to teach real estate law and is currently Gurr, secretary, Elko County; Marc Sykes, with the National Judicial College on the Washoe County; and Soozi Jones Walker, University of Nevada, Reno campus. Clark County. TABLE OF contents I. nevada law on real estate agencY ............................................................................................................................... I - 3 A. Representing the Client ................................................................................................................................................I - 3 B. Duties – Sources ...........................................................................................................................................................I - 12 C. Things for Which a Licensee is Not Liable ..........................................................................................................I - 14 D. Termination of Agency ..............................................................................................................................................I - 19 E. Review ..............................................................................................................................................................................I - 22 II. Nevada Law on FiduciarY Duties ..................................................................................................................................... II - 3 A. Evolution of the Common Law to Statutory Duties ......................................................................................... II - 3 B. Client Before Self – Absolute Fidelity .................................................................................................................... II - 5 C. Duty of Honesty ............................................................................................................................................................ II - 9 D. Reasonable Skill and Care: Competency ............................................................................................................II - 11 E. Disclosure: “Should have Known” – Duty to Investigate ..............................................................................II - 13 F. Supplementary Services ..........................................................................................................................................II - 17 G. Review .............................................................................................................................................................................II - 20 III. Nevada Law on BroKerage Agreements ..................................................................................................................... III - 3 A. Creation and Termination ......................................................................................................................................... III - 3 B. Types of Representation ..........................................................................................................................................III - 11 C. Compensation .............................................................................................................................................................III - 15 D. Specialized Brokerage Agreements ....................................................................................................................III - 24 E. Review ............................................................................................................................................................................III - 28 IV. Nevada Law on Offers and Purchase Agreements............................................................................................ IV - 3 A. Offers and Counteroffers – General Law .............................................................................................................IV - 3 B. Purchase Agreements ............................................................................................................................................. IV - 10 C. Alternative Contracts ............................................................................................................................................... IV - 25 D. Review ........................................................................................................................................................................... IV - 29 V. Nevada Law on DisclosureS ............................................................................................................................................... V - 3 A. General Disclosure Information ...............................................................................................................................V - 3 B. The When, Who and How of Disclosure ...............................................................................................................V - 9 C. What Must Be Disclosed ...........................................................................................................................................V - 15 D. Review .............................................................................................................................................................................V - 22 E. Appendixes ...................................................................................................................................................................V - 23 VI. Nevada Law on Advertising ............................................................................................................................................... VI - 3 A. Advertising
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