APPLIES TO ACADEMIC YEAR 2015/2016 Norwegian version

EMS 3651 Real Estate Accountancy

Responsible for the course
Paul H Fjeldheim

Department
Department of Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
In their capacity as a neutral intermediary, all real estate enterprises are responsible for handling the economic settlement between buyer and seller in a safe and orderly fashion, in accordance with the applicable regulations.
The legislation concerning the settlement process is extensive and regulates the value chain: registration of received client funds, booking of transactions, requirements concerning journaling and presentation of the annual accounts, taking into account the prevailing requirements for public information.
Nevertheless, the legal provisions do not regulate the actual settlement in detail. The real estate agent must ensure that the settlement is made in accordance with the contracts that the parties have signed, in accordance with generally accepted estate agent principles and his/her duty of care for both parties.

The settlement between the parties is the final part of the conclusion of a property deal. The settlement sums up the economic agreements that have been concluded during the transaction, in addition to the charges and fees that have accrued for each party.
The type of ownership and conveyance that is applicable will also determine how a correct settlement shall be carried out. The real estate agent is required to make sure that the transfer of the purchase sum from buyer to seller takes place without risks for any of the parties.

Students are expected to have acquired the necessary knowledge in their first and second year of the programme to understand the conditions on which such settlements are based.

Learning outcome
Acquired Knowledge
After having completed the course, the students shall have precise knowledge about, and understand the applicable framework for carrying out a correct settlement, including the rules for dealing with and booking entrusted funds (client funds). They shall also have gained knowledge of the requirements for generally accepted estate agent principles and for the estate agent’s duty of care for both parties based on the economic settlement.

Acquired Skills
After having completed the course, the students shall be able to perform a correct settlement for typical property deals that are carried out by estate agents. They shall be able to register common transactions that occur in connection with various types of settlements and shall have an understanding of how to handle and book entrusted funds (client funds) and the settlement and sale of real estate.
The student shall be able to consider aspects of the property deal that may affect the settlement, for instance agreements between the parties, circumstances on the seller’s or buyer’s side, required documentation for the property deal and what this entails in terms of preparing a reliable settlement.

Reflection
After having completed the course, the student shall not only have a technical insight into how a property settlement is carried out, but shall also understand that the requirements for generally accepted estate agent principles and the estate agent’s duty of care for both parties are important factors for carrying out the economic settlement. The students shall also show that they have increased their ethical awareness and reflection concerning the economic settlement.

Prerequisites
This course is given in the third year of the bachelor programme in real estate studies and is based on the courses given in the first and second year of the programme. Students are expected to have an in-depth knowledge of the legislation and other external parameters that have an impact on how the settlement is to be carried out.

Compulsory reading
Books:
Håndbok for Norges eiendomsmeglerforbund. Siste utg. Norges eiendomsmeglerforbunds servicekontor
Lyngtveit-Petersson, Christina. 2013. Oppgjør av eiendomshandler : mellommannsrollen ved eiendomsoppgjør. Norges eiendomsmeglerforbund
Rosenvold, Erik. 2013. Oppgjør av eiendomshandler : oppgavehefte EMS 3651. Handelshøyskolen BI, Institutt for regnskap, revisjon og jusBI Forlag

Other:
Diverse forfattere. Artikler referert til i forbindelse med gjennomføringen av kurset
Diverse Rundskriv fra Finanstilsynet


Recommended reading

Course outline

1. Legislation and regulations related to carrying out typical property deals, including the rules concerning handling of entrusted funds.
2. Accounting and reporting rules, including requirements for balancing the client accounts.
3. The client accounts and the connection to the annual accounts.
4. Organizing the settlement service in the real estate enterprise.
5. Quantification, documentation and registration of transactions.
6. Actions related to completion of the financial settlement between the parties, including settling of accounts, statement of accounts, redemption of loan and transfer of right of ownership to new owner.
7. Ability to identify the main risk phases in a property settlement.