Regulatory Alerts2014-06-27
Circular on Contracts, Settlement, and Client Fund Handling in Real Estate Brokerage
The Norwegian Financial Supervisory Authority issued Circular 7/2014 to establish binding rules for real estate brokers regarding contract formation, settlement procedures, and the management of client funds. The regulation mandates that brokers must secure legal protection for the buyer before any portion of the purchase price can be disbursed to the seller, with specific exceptions for foreign property and certain new housing sales. It further requires rigorous monthly reconciliation of client accounts, strict segregation of funds, and adherence to guarantee requirements under the Housing Construction Act to protect consumers from financial risk.
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