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Florida RE exam > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

What is Common Law?

A

Unwritten law that is derived from court decisions that reflect the attitudes of the community

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2
Q

What are compensatory damages?

A

Penalty imposed by civil courts that is typically determined by measurable loss

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3
Q

What are punitive damages?

A

Penalty imposed by civil courts that imposes additional damages to punish the party whose actions gave cause for the suit

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4
Q

What is Statutory Law?

A

Law, enforceable in court, that is based on written statutes that have been enacted by the government

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5
Q

What is Administrative Law?

A

Law that gives FREC the ability to levy monetary fines

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6
Q

What is the statutory law FS 475?

A

law enacted by Florida legislated that is intended to protect the public by the regulation of real estate and appraisal licensees

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7
Q

What is Agency Law?

A

Law that addresses the rights and duties that arise from an individual that is authorized and entrusted to work on behalf of their employer and represents the best interests of that employer (buyer/seller is the employer)

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8
Q

Who is the Principal?

A

The agent’s employer in an agency relationship
The buyer or seller

The party with whom a real estate licensee has entered into a single agent relationship with

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9
Q

What is a Special Agent?

A

An agent authorized by the principal to perform a single act defined in the employment contract

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10
Q

What is a Universal Agent?

A

Agent authorized by power of attorney to act for and represent the principal in all matters, without limitation

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11
Q

What is a general agent?

A

Agent with the principal’s authority to act for him or her on a continuing bases, but with authority limited to a specific trade of business

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12
Q

What is a subagent?

A

A party who has been granted authority to act on behalf of another agent and has the same duties to the principal as the agent who was employed by the principal

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13
Q

What is it called if there is a single agency listing where the broker is authorized only to locate a purchaser on behalf of the owner?

A

Special agent

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14
Q

what is the Brokerage Relationship Disclosure Act (BRDA)?

A

The act that specifies and defines the relationship between a broker and their employer, as well as disclosure requirements in a residential real estate transaction

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15
Q

What is a customer?

A

A member of the public whom is NOT represented in a single agency relationship

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16
Q

What is a single agent?

A

A broker who represents as a fiduciary, either the buyer or the seller, but not both in the same transaction

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17
Q

What is a transactional broker?

A

A broker who provides limited representation to a buyer, seller, or both, in a real estate transaction

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18
Q

What is a (illegal) dual agency?

A

A relationship created by a broker representing both the buyer and seller as a single agent in a transaction

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19
Q

What is a residential sales transaction?

A

Sale of improved residential property of 4 units or less
Sale of unimproved property intended for 4 units or less
Sale of Agricultural properties of ten acres or less

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20
Q

How to transition from being a single agent to a transaction broker?

A

Through the Consent to Transition to Transaction Broker disclosure notice

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21
Q

Which written disclosure notices are required in a when creating an agency relationship?

A

Consent to Transition to Transaction Broker
No Brokerage Relationship (notice of non-representation)
Single Agent

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22
Q

Which disclosure notice MUST be signed by the principal?

A

Consent to Transition to Transaction Broker

23
Q

How long are you required to keep copies of disclosure documents for residential sales that result in a written sales contract?

A

5 years from the date of execution of the contract (regardless of whether or not the transaction closes)

24
Q

What are the different types of representations?

A

Single Agent
Transaction Broker
Non-representation (no brokerage relationship)

25
Q

What are the duties that all licensees must perform in any type of agency relationship?

A

Honesty and fairness
Disclosure of all known material facts
Accounting for all funds

26
Q

Which duties does a broker have in a transaction broker relationship as well as single broker relationship?

A

Present all offers in a timely manner
Use skill, care, and diligence in the transaction

27
Q

Which offers must be presented in a single or transactional broker relationship?

A

All offers, written or oral, with or without a binder deposit

28
Q

What could happen if you fail to present an offer to the employer?

A

Concealment or Breach of Trust

29
Q

When can a broker accept an offer on behalf of their employer?

A

When the broker has been given power of attorney

30
Q

What type of relationship is presumed between the broker and the employer when no representation has been established in writing?

A

Transaction Broker

31
Q

What type of relationship provides limited representation to a buyer, seller, or both in a real estate transaction?

A

Transactional broker

32
Q

What are the duties of a transactional broker?

A

Honesty and fairness
Disclosure of all material items
Accounting of all Funds
Present all offers
Use skill, care, and diligence
Provide limited confidentiality
Any additional agreed upon duties

33
Q

What can a transactional broker NOT discuss under the duty of limited confidentiality?

A

Price
Motivation
Terms
Information that may harm the party’s bargaining position

34
Q

Which type of brokerage relationship establishes a fiduciary relationship?

A

Single agency

35
Q

What are the duties of a broker in a single agency relationship?

A

Honesty and fairness
Accounting for all funds
Disclosure of material facts
Present all offers
Use skill, care, and diligence
Fiduciary (confidentiality)
Obedience
Loyalty
Full disclosure

36
Q

Who is the single agent’s employer?

A

The Principal

37
Q

Who does the sales agent have an agency relationship with?

A

Their broker, not the principal. They are a subagent of the broker

38
Q

What is an Arm’s Length Relationship? A.k.a. caveat emptor or buyer beware)

A

Parties acting in their own best interest in an adversarial relationship

39
Q

Who typically operates at an arm’s length relationship?

A

Buyer and seller

40
Q

What is the opposite of an arm’s length relationship?

A

Fiduciary relationship, where the broker is acting in the principal’s best interest

41
Q

Why would a broker need to transition from a single agent to a transaction broker?

A

To avoid an illegal dual agency

42
Q

What is the reason for a written No Relationship notice?

A

when working with a FSBO

43
Q

What is a listing contract?

A

An employment contract between the seller and the broker

44
Q

When is a broker paid if they are employed by an owner to find a purchaser?

A

When they find a ready willing and able purchaser after the sales contract is signed by all parties.

45
Q

When is a broker paid if they were employed by a seller to effect a sale

A

When the transaction closes

46
Q

How are sales commissions determined?

A

By an agreement between the broker and the party paying the commission

It is a percentage of the purchase price

47
Q

How much is the compensation if it is not specified in the terms of the employment contract?

A

A customary commission rate on the type of property the broker would normally charge

48
Q

What happens if a broker refuses to pay commission to another broker or sales associate as agreed?

A

Failure to Account, which is a form of fraud

49
Q

When two or more brokers are competing for a sale, who earns the commission?

A

Procuring Cause, the one who produced a continuous and uninterrupted series of events that resulted in the sale

50
Q

When can a broker collect a commission from both parties in a transaction?

A

With knowledge and consent of both parties in the transaction

51
Q

What is Overage, Secret Profit, of Unjust Commission?

A

Illegal act of manipulating a transaction so as to profit at the expense of the employer without the knowledge of the employer

52
Q

Can a broker from outside of Florida receive a referral fee?

A

only if they are licensed and do not partake in the real estate transaction

53
Q

When can a licensee receive a fee or kickback in exchange for referral of real estate services?

A

When they are licensed to perform the service and discloses and receives consent from the parties

Florida RE exam (18 decks)

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