Real Estate Unit 5 – Flashcards
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A licensee who violates the federal telephone solicitation law may be fined up to $10,000 per call. True or False?
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False. Violators of the federal Telephone Consumer Protection Act may be fined up to $11,000 for each illegal call.
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In the event of disputed funds, a broker may request that the Florida Real Estate Commission issue an escrow disbursement order (EDO). True or False?
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True. A broker may request that the Commission issue an EDO to determine who is entitled to the disputed funds. However, the Commission may choose not to issue an EDO, forcing the broker to choose from one of the other settlement procedures: mediation, arbitration, or litigation.
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All earnest money sale deposits must be placed immediately in an escrow account an cannot be intermingled or commingled with the broker's personal or operating funds. True or False?
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True. To commingle funds is the illegal practice of mixing a buyer's or seller's funds with the broker's own money or of mixing escrow money with the broker's personal funds or business funds.
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The office sign at the entrance brokerage business must display the brokerage street address. True or False?
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False. There is no requirement to include the brokerage office street address on the entrance sign. The office sign must contain the broke's name, trade name (if one is used), and the words "Licensed Real Estate Broker" or "Lic. Real Estate Broker."
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An ostensible partnership may be registered as a real estate brokerage entity. True or False?
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False. An ostensible (or quasi partnership) is considered to be fraudulent and deceitful if the public is deceived into believing that a partnership exists.
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After discussion with the broker, a real estate licensee offers to share part of the commission with the buyer. The arrangement is disclosed to all interested parties. This is an example of a legal kickback or rebate. True or False?
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True. Florida law allows a real estate licensee to share part of the commission with the buyer or seller in a real estate transaction, provided the rebate is disclosed to all interested parties. Sharing a portion of the commission with a party to the transaction is an example of a legal kickback or rebate.
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The Supreme Court found "do not call" lists to be unconstitutional. Thus, a licensee may freely call anyone in Florida to solicit business. True or False?
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False. The Federal Trade Commission maintains a "do not call" list. The list has nor been found to be unconstitutional. A licensee is not permitted to call an individual on the list unless the licensee has had a business relationship with the individual on the list. A licensee may call an FSBO seller if the licensee has a bona fide buyer interested in the seller's property, even if the seller in on the "do not call" list.
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If escrow funds are held by a title company, the broker is under no obligation to deliver the funds to the title company within three business days. True or False?
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False. FREC rules require that the broker request a written receipt from the attorney or title company. The purpose of the receipt is to document that the funds were delivered to the escrow agent by the end of the third business day.
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All active Florida real estate brokers are required to have an office. True or False?
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True. Active real estate brokers are required to have an office. Additionally, the office must be registered with the Department of Business and Professional Regulation.
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A corporation sole is permitted to register as a real estate broker. True or False?
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False. A corporation sole cannot be registered as a real estate broker. A corporation sole is an ecclesiastical or church organization, usually headed by a bishop or other clerical official who has been empowered by a church to hold title to church property. Before dealing with a corporation sole, a broker should obtain a written opinion from an attorney who has experience in such titles.
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Two men enter into a business arrangement. The two parties agree that one party will be solely liable for the debts of the business and the other party will be liable only for the amount of cash invest in the business. Which type of business arrangement have the formed? Corporation, General partnership, Limited partnership, Business trust
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Limited partnership. A limited partnership is composed of one or more general partners and one or more limited partners. The limited partner must make an investment in cash or property, but not services. Limited partners are not liable to creditors of the partnership.
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A licensed real estate broker has a successful real estate business. The broker has branch offices in Fort Myers, Naples, and Bradenton, Florida. The broker wants to close her Bradenton office and open a new branch office in Sarasota, Florida. Which statement applies to this situation? -The broker can request that the branch office license for Bradenton be transferred to the Sarasota location to avoid paying another branch office fee. -The broker simply must notify the DBPR within 15 business days of the change of address from the Bradenton location to the new Sarasota location. -The broker must request permission from the DBPR to relocate to Sarasota before opening the new location. -The broker must register the new branch location and pay the branch office license fee.
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The broker must register the new branch location an pay the branch office license fee. The new location must be registered and the fee paid. Registrations issued to branch offices are not transferable.
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A real estate broker does NOT have to report to the FREC conflicting demands regarding escrowed property if the escrowed funds are maintained by which method? -Florida credit union -Attorney's trust account -Florida savings association -The broker must report conflicting demands regardless of where the funds are escrowed
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Attorney's trust account. Real estate license law governs only broker's escrow accounts held in Florida commercial banks, credit unions, or savings associations. Real estate license law has no authority over title company escrow accounts or attorney escrow accounts. Therefore, if a title company or an attorney is the escrow agent, the broker has no obligation to report an escrow dispute to the FREC account.
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A seller wants to give something extra to the sales associate beyond the sales commission to be paid for a transaction. The seller decided to give the sales associate a shopping mall gift certificate. Which statement applies to this situation? -The seller can give the sales associate a gift certificate because it is not cash -The only compensation the the sales associate may receive is part of the commission, regardless of circumstance -The seller cannot give the gift certificate to the sales associate directly, but may give it to the sales associate's broker with a note requesting the the gift certificate be given to the sales associate for fine service. -All compensation must be paid in cash only.
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The seller cannot give the gift certificate to the sales associate directly, but may give it to the sales associate's broker with a note requesting that the gift certificate be given to the sales associate for fine service. All monies or other compensation earned by sales associates as a result of any real estate services must be paid to the sales associate by their employers not directly by a buyer or seller.
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The Sherman Antitrust Law and Florida antitrust laws prohibit which activity? -The buyer and broker negotiating the fee in a buyer brokerage agreement -The seller and broker negotiating the commission percentage based on the degree of service desired by the seller -The seller and broker negotiating the final commission to be paid to the broker -The Associate of REALTORS recommending a standard commission rate based on surveys of membership
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The Association of REALTOR recommending a standard commission rate based o surveys of membership. It is illegal for real estate brokers to conspire to fix commissions or fees for the services they perform. The amount of commission to be paid negotiable.
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A sales associate received an earnest money deposit on Monday. The sales associate gave the check to his broker on Tuesday. By the end of business on which day must the check be deposited into the escrow account? Wednesday, Thursday, Friday, Monday
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Thursday. The broker has unit the end of the third business day (Thursday) to deposit the funds. The three business-day time period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker. In this case, the first day of the three-business-day period is Tuesday.
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Which settlement procedure involves a negotiated settlement between the disputing parties? Arbitration, Mediate, Litigation, Escrow disbursement order
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Mediation. Mediation is an informal, non-adversial process intended to reach a negotiated settlement.
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A sales associate may hold which position. -General partner in a real estate brokerage partnership -Owner of a sole proprietorship real estate business -President of a real estate brokerage corporation -Limited partnership in a real estate brokerage limited partnership
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Limited partner in a real estate brokerage limited partnership. A sales associate or broker associate may not be an officer or director of a real estate brokerage corporation. Sales associates may be limited partner in a limited partnership.
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Which method is NOT one of the four settlement procedures available to the parties when there is an escrow dispute? Stipulation, Mediation, Litigation, Escrow disbursement order
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Stipulation. A stipulation is an agreement as the penalty reached when a licensee has violated license law. The four settlement (escape) procedure available include: (1) mediation; (2) arbitration; (3) litigation; and (4) escrow disbursement order.
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For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR? -90 days if no escrow funds were collected -Six months if escrow funds were collected but the contract failed to close -Two years regardless of whether the contract closed -Five years regardless of whether trust (escrow) funds were collected
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Five years regardless of whether trust (escrow) funds were collected. Brokers must maintain records of real estate transactions for five years regardless of whether escrow funds are pledged.
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Which requirement must be accomplished to register a real estate brokerage as a general partnership? -Execute a written agreement signed by all of the general partners -File a partnership agreement with the Florida Real Estate Commission -Register the partnership in the name of the partnership with at least one partner licensed as an active broker -Accomplish all of the requirements listen above
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Register the partnership in the name of the partnership with at least one partner licensed as an active broker. General partnerships are created by written, oral, or implied contract. Partnerships registered as a real estate brokers obtain register in the name of the partnership. The partnership itself is registered, and at least one of its partners must licensed as an active broker.
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Real estate escrow funds may NOT be places in which type of depository. -Commercial bank in Florida -Attorney's trust account -Florida saving association -Stock brokerage house
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Stock brokerage house. Brokers may maintain an escrow account in a Florida commercial bank, credit union, or saving associate. Some brokers instead choose to have a Florida-based title company that has trust powers maintain the escrow funds, or alternatively, if designated in the sales contract, a Florida attorney may escrow the funds.
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What amount of a broker's own personal funds may the broker place in the property management escrow account? $0, $1,000, $5,000, $10,000
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$5,000. A broker may keep up to $5,000 of the broker's personal funds or brokerage funds in a property management escrow account.
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Mike Meyers, licensed real estate broker, is a sole proprietor who used the trade name #1 Service Realty. His wife Susan Myers works with Mike and is a licensed brokers associate. Of the following pieces of information that appear on the broker's entrance sign, which is optional under Florida license law? -Mike Meyers -#1 Service Realty -Susan Meyers, Broker Associate -Licensed real estate broker
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Susan Meyers, Broker Associate. The name of sales associates and broker associates are not required to appear on the entrance sign. If the names of associates do appear on the entrance sign, the associate's license status must appear next to the name.
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Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation? -Susan has formed a real estate brokerage business as a limited liability company (LLC) -Susan must partner with a real estate broker in order for her license to be issued this way -Susan is in violation of Florida license law -Susan has form a limited liability (LLC) for income tax purposed only, and is employed by and registered under either a licensed real estate broker or an owner-developer
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Susan has formed a limited liability company (LLC) for income tax purposes only, and is employed by and registered under either a licensed real estate broker or an owner-developer. Broker associates and sales associates must have their licenses issued in their legal names. A sales associate is allowed by law o form as a limited liability company. The DBPR issues the license in the licensee's actual name, and includes the entity designation on the face of the license. The LLC may be formed for income ax purposes only, and is not a real estate brokerage entity.
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A real estate brokerage office receives an earnest money deposit check on Thursday. By end of business which day must the funds be deposited into the escrow (trust) account? Friday, Monday, Tuesday, Wednesday
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Tuesday. Brokers must place trust funds into their escrow account no later than the end of business of the third day following receipt of the funds.
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Which business entity may NOT register as a real estate brokerage entity? -Cooperative association -Limited liability company -Sole proprietorship -Limited partnership
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Cooperative association. A cooperative association is allowed to conduct commercial business and to convey, sell, or buy its own property, but it cannot be registered as a real estate broker.
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Lori Sammis is a licensed real estate sales associate. Under which name may she register and be licensed? -Excellent Service Realty -Lori Sammis, PA -Lori Sammis and Company -Lori Sammis ad Excel Realty
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Lori Sammis, PA. Sales associate must have their licensed issued in their legal name. A sales associate may not be licensed or registered under a trade name. However, for tax purposes, a sales associate is allowed by law to form a professional (PA), ad in this case, the DBPS will issue the license in the licensee's actual (legal name and include the entity designation (PA) after the licensee's legal name
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Which statement is FALSE regarding a real estate brokerage corporation? -A corporation that is organized under the laws of Georgia but that does business in the state of Florida is known as a foreign corporation -A sales associate may be appointed as a director of a real estate brokerage corporation -If the only active broker of a brokerage corporation dies, no new brokerage business may be performed by the corporation of a new active broker is designated and registered -At lease one officer or director of the corporation must be licensed as an active broker
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A sales associate may be appointed as a director of a real estate brokerage corporation. A sales associate or broker associate may not be an officer or director of a real estate broker corporation.
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A broker who has a good faith doubt regarding who is entitled to escrow funds should take which action? -Request an escrow disbursement order from the DBPR -Notify the FREC in writing of the good faith doubt within 15 business days -Institute one f the settlement procedures within 15 business days -Send a certified letter to the parties to the contract indicating that they will forfeit the funds if they do not make a claim within 30 business days
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Notify the FREC in writing of the good faith doubt within 15 days. If a broker has a good faith doubt as to which party should receive the escrowed property, the broker must notify the FREC, in writing, within 15 business days of having such doubt.
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What is the maximum finder's fee that may be paid in the form of a credit toward rent paid to the tenant for referring a person to the management company if that person later becomes a tenant of the complex? -One month's rent -$100 -$50 -$0; this is an illegal kickback
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$50. A property management firm or an owner of an apartment complex may pay a finder's fee (or referral fee) of up to $50 to an unlicensed person who is a tenant of the apartment complex.
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A broker made a request to the Commission that it issue an escrow disbursement order (EDO) regarding disputed escrowed funds. Prior to the EDO being issued, the escrow dispute was settled between the parties. How long does the broker have to notify the FREC that the matter has been resolve? -24 hours -10 business days -15 business days -30 calendar
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10 business days. If a broker requested an EDO and the escrow dispute is either settled or goes to court before the EDo is issued, the broker must notify the FREC within 10 business day.
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Advertising rental property information that is materially inaccurate is which type of violation? -First degree misdemeanor -Second degree misdemeanor -Third degree misdemeanor -Third degree felony
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First degree misdemeanor.
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A real estate licensee advertises a property for sale that is listed by the company, but fails to disclose in the ad that the property is being advertised by a real estate company. This is know as what type of advertising? Fraudulent, Secretive, Blind, Creative
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Blind. Blind advertising is advertising that fails to disclose the license name of the brokerage firm.
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What is the fine per telephone call for violation of Florida's Telemarketing Act? -$1,000 -$5,000 -$10,000 -$11,000
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$10,000. Violators of Florida's Telemarketing Act may be fined $10,00 per call.
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A prospective tenant purchased rental information from a real estate brokerage company for $75. What recourse is available to the prospective tenant who purchased the information and found that much of the rental information was out-of-date? -The tenant should file a claim in small claims court for damages -The tenant should demand a refund of $50 of the fee paid -The tenant should demand within 20 days a refund of $75 -Th tenant should request that the DBPR conduct an audit of the brokerage company
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The tenant should demand within 30 days a refund of $75. If the information provided to a prospective tenant is not current or is inaccurate in any material respect, the broker must pay the full fee to the prospective tenant on demand if the claim is made within 30 days from the contract date.
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Which statement is TRUE regarding interest-bearing escrow accounts? -Brokers may make an office policy that all escrow funds must be places in an interest-bearig account to help cover the costs of maintaining the account, and are not required to disclose this is each each sale contract because it applies to all transactions -The broker must get written permission from all parties to the transaction before placing the funds into an interest-bearig account -It is illegal for the broker to keep any interest earned on escrow funds -Florida license law requires the interest accrued on escrow funds to be credited to the buyer because it is the buyer's earnest money deposit
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The broker must get written permission from all parties to the transaction from all parties to the transaction before placing the funds into a interest-bearing account. If an escrow account is an interest-bearing account, the broker must get written permission from all parties before placing the funds into the account. The written authorization must specify who is entitled to the interest earned.
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A sales associate receives an earnest money deposit on Saturday. When does the sales associate have to give the deposit to the broker? Sunday, Monday, Tuesday, Wednesday
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Monday. The sales associate has until the end of the next business day to deliver the deposit to the broker.
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For each type of business entity, indicate whether that entity may register as a real estate broker -Limited liability company -Corporation sole -Corporation -Limited liability partnerships -Joint ventures Business trusts
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May register as a broker: -Limited liability companies -Corporations -Limited liability partnerships May not register as a broker: -Corporations sole -Joint ventures -Business trusts
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What is a general partnership?
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All members participate in operation and management of business
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What is a corporation?
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A legal entity managed and operated by a board of directors
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What is joint venture?
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Two or more people or firms carry out a single business project
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What is a limited liability company?
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Combines the tax advantages of limited partnership and limited liability of corporations
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Report the deadline for the following: Sales associate must deliver escrow deposits to their broker by the end of...
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Next business day
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Report the deadline for following: Broker must notify the FREC in writing of conflicting demands of a good faith doubt within...
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15 business days
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Report the deadline for the following: If a broker requests a EDO ad the escrow dispute is setled before the EDO is issued, he/she must notify the FREC within...
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10 business days
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Report the deadline for the following: Brokers must deposit escrow funds by the end of the...
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Third business day
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Report the deadline for the following: Upon receiving conflicting demands, brokers must institute one of the settlement procedures within...
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30 business days
