Article 12A

Question 1

Commingling

Answer 1

illegal mixing of money in accounts that should be kept separate

Correct:
Broker puts client’s deposit funds into escrow account

Incorrect:
Broker puts client’s deposit funds into business operating account

Question 2

Rendering Account for Client

Answer 2

all monies collected from client must be handled honestly with accountability

Note: all payments should be transferred to Broker immediately; not SP

render- return, yield, pay/perform services

Question 3

Managing Property for a Client

Answer 3

to accept any $, broker must have:

• explicit, clear consent from client
• clients knowledge

Question 4

Broker Must Inform Property Owner

Answer 4

Broker cannot buy property w/o informing owner

Question 5

Disclosure of Interest to Client

Answer 5

Before BR buys on behalf of CT, it must be disclosed to all concerned parties

Question 6

Broker Sale of Property in Which they Own an Interest

Answer 6

if BR is selling property they own to CT, all parties must be informed of ownership status

Question 7

Compensation

Answer 7

BR may not receive payment from more than 1 party without consent from all parties

Suggestion: disclose to all parties whom they represent as client or customer
Inform and obtain agreement from all licenses if payments are to be made by more than 1 party

Question 8

Negotiating Exclusive Listing Contracts [ELC]

Answer 8

• cannot “Steal” a listing by asking owner to void current contract
• all transactions must go through the current broker if CT and BR have previously signed an agreement

Question 9

Inducing Breach of Contract or Sale

Answer 9

cannot pressure any party to break contract for any reason

example: break a sale contract to engage in sale with a higher bidder.

Question 10

Broker’s sale. offer Authorized by Owner

Answer 10

Broker may not put property up for sale or offer without owner’s express opinion

Question 11

Cobrokerage

Answer 11

2 brokers working to sell one broker’s exclusive property

this requires a co-brokering agreement previous to sale

Question 12

Sign on Property

Answer 12

Cannot place signs on property without homeowner’s consent

Question 13

Deliver Duplicate Original of Instrument

Answer 13

BR immediately* provides copy of signed documents

*as soon as BR arrives at office or to fax, copier etc.

Question 14

Services of another BR’s SP or employee

Answer 14

BR1 cannot accept services from BR2’s SP without BR2’s express consent
SP can only be paid by BR2

BR1->Consent->BR2 BR1->Pay->BR2
I I I

Question 15

Termination of SP - BR Association

Answer 15

Broker owns all listings (including any SP found)

SP cannot save or use listing info for their own use after termination relationship

Question 16

Continuation of Exclusive Listing Contract [ELC]

Answer 16

ELCs have fixed termination date that cannot auto-renew

• they can be extended by signing additional documentation
• common subject of negotiation

Question 17

Solicitation Prohibitions

Answer 17

cannot induce owner to sell/lease due to:

• people of a certain color/race/religion etc
• after owner sends written notice of decline of sale
• designated area of cease and desist

Question 18

Solicitation

Answer 18

the attempt to buy/lease/obtain a listing by:
- phone canvass, mail, leaflets, flyers, knocking on doors, email blasts, otherwise solicitation
not solicitiation:
- classified ads in non primary RE periodicals
- ads placed in public view
- radio + tv

Question 19

Residential property

Answer 19

1/2/3 Family homes + cooperatives + condominiums

Question 20

Net Listing Agreement [NLA}

Answer 20

Not permitted in NY RE
Example: I want to net 500k, you keep everything else as commission

[NLA] can result in BR receiving too much or too little compensation.

Therefore we need to have a precise number, usually a flat fee or % of gross sale price

Question 21

Branch offices

Answer 21

place of operation for RE firm away from principle office
must be run/supervised by Broker
Broker license displayed in principal office
Branch office license displayed at each branch
SP can run Branch, if under strict supervision of BR and DOS has both names for each branch

Question 22

Supervision of SP by BR

1d of 441 real property law

Answer 22

Regular, consistent, frequent personal guidance
Instruction and oversight
Superintendence

Question 23

Written records for SP

Answer 23

BR and SP must keep records of:

• all listings obtained by SP
• all sales and transactions by SP
• records need transaction info & dates
• SP needs to submit data to DOS to become BR
• SP needs 35 hours work per week, for 50 weeks in a year

Question 24

Voting Stock

Answer 24

SP cannot own voting stock in sponsoring BR firm as it may bar BR from supervising effectively

Question 25

Records to maintain for 3 years

Answer 25

- name and address of seller, buyer, mortgage holder - Purchase/Resale price - Contract Deposit Amount - Commission paid to BR or gross profit of resale if property owned by BR - Expenses of acquiring mortgage loan - Net commission/net profit of BR, showing all payments made - Records of transactions to be maintained

Question 26

How to properly advertise listings | 2

Answer 26

Ads must indicate advertiser is a broker, or broker name and number. Ad location must be specific to geographic area. Unacceptable: Apt for rent, NYC - Acceptable: Apt for rent, Kew Gardens, Queens

Question 27

How to post business signs in an apt where signs are not permitted in the lobby (3) Subdivision 3 - 441 article 12a

Answer 27

Post on the corridor wall next to the dwelling entrance door Post on the dwelling entrance door itself Post on the entrance of the dwelling unit in which business is conducted