Unit 1 - Legal Issues and Risk Management

Question 1

Agency

Answer 1

The relationship between the agent and the principal

Question 2

Agent

Answer 2

A person who acts on behalf of another person or group.

Question 3

Buyer Brokerage Agreement

Answer 3

An employment contract with a purchaser.

Question 4

Community Association

Answer 4

A nongovernmental association of participating members of a community, such as a neighborhood, village, condominium, cooperative, or group of homeowners or property owners in a delineated geographic area. Participation may be voluntary, require a specific residency, or require participation in an intentional community.

Question 5

Consent to Transition to Transaction Broker

Answer 5

A written agreement to gain the principal’s permission to a change in the brokerage relationship.

Question 6

Customer

Answer 6

One with whom the broker or sales associate hopes to be successful in accomplishing the purpose of employment. A buyer or seller of real property who may not be represented by a real estate licensee in an authorized brokerage relationship.

Question 7

Designated Sales Associates

Answer 7

Two real estate licensees designated to represent the buyer and the seller as single agents in a nonresidential transaction. The buyer and seller each must have assets in excess of $1 million dollars and they must sign disclosures attesting to this fact.

Question 8

Dual Agency

Answer 8

Representing both principals in a transaction. This is a brokerage relationship that is not legal in the state of Florida.

Question 9

False or Misleading Statement

Answer 9

Misrepresentation or concealment of a material fact.

Question 10

Fiduciary Relationship

Answer 10

An alliance of trust and confidence that creates a moral and legal obligation when extended by one person and accepted by another.

Question 11

Innocent Purchaser Status

Answer 11

An individual who, in Good Faith and by an honest agreement, buys property in the absence of sufficient knowledge to charge him or her with notice of any defect in the transaction.

Question 12

Material Fact

Answer 12

A material fact in real estate is information that, if known, might cause a buyer to make a different decision about remaining in a purchase contract, or to the price paid or received for property. Both residential and commercial properties can be impacted by material fact disclosure requirements.

Question 13

Misrepresentation

Answer 13

A false or misleading statement of a material fact; concealment of a material fact.

Question 14

No Brokerage Relationship Notice

Answer 14

When a licensee has no brokerage relationship with the buyer or seller, he/she still must disclose the parameters of the relationship and make the customer aware of the duties the agent will provide. The include 1. Dealing honestly and fairly; 2. Disclose all material facts about the property that may not be readily evident to the buyer; and 3. Account for all funds.

Question 15

Principal

Answer 15

The party employing the services of a real estate broker; amount of money borrowed in a mortgage loan, excluding interest and other charges.

Question 16

Property Condition Disclosure

Answer 16

Seller’s property disclosure in which the seller discloses all material facts about the condition of the property being sold.

Question 17

Radon Gas

Answer 17

A naturally-occurring radioactive gas that can cause lung cancer. Radon gas is inert, colorless and odorless. Radon is naturally in the atmosphere in trace amounts. Breathing radon over time increases your risk of lung cancer. Radon is the second leading cause of lung cancer in the United States.

Question 18

Single Agent

Answer 18

A broker who represents either the buyer or seller of real estate, but not both in the same transaction. It is the highest form, providing the most confidence to the customer that the Realtor represents only the customer’s interest.

Question 19

Transaction Broker

Answer 19

A broker who provides limited representation to a buyer, a seller or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.

Question 20

14

Answer 20

The number of hours of continuing education a sales associate needs to renew license after the first renewal period.

Question 21

5

Answer 21

The number of years all disclosures and other transactional documents must be maintained