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Flashcards in Article 12A Deck (27)
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1

Commingling

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

2

Rendering Account for Client

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

3

Managing Property for a Client

to accept any $, broker must have:
- explicit, clear consent from client
- clients knowledge

4

Broker Must Inform Property Owner

Broker cannot buy property w/o informing owner

5

Disclosure of Interest to Client

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

6

Broker Sale of Property in Which they Own an Interest

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

7

Compensation

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

8

Negotiating Exclusive Listing Contracts [ELC]

- 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

9

Inducing Breach of Contract or Sale

cannot pressure any party to break contract for any reason
example: break a sale contract to engage in sale with a higher bidder.

10

Broker's sale. offer Authorized by Owner

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

11

Cobrokerage

2 brokers working to sell one broker's exclusive property
this requires a co-brokering agreement previous to sale

12

Sign on Property

Cannot place signs on property without homeowner's consent

13

Deliver Duplicate Original of Instrument

BR immediately* provides copy of signed documents
*as soon as BR arrives at office or to fax, copier etc.

14

Services of another BR's SP or employee

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

15

Termination of SP - BR Association

Broker owns all listings (including any SP found)
SP cannot save or use listing info for their own use after termination relationship

16

Continuation of Exclusive Listing Contract [ELC]

ELCs have fixed termination date that cannot auto-renew
- they can be extended by signing additional documentation
- common subject of negotiation

17

Solicitation Prohibitions

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

18

Solicitation

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

19

Residential property

1/2/3 Family homes + cooperatives + condominiums

20

Net Listing Agreement [NLA}

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

21

Branch offices

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

22

Supervision of SP by BR

1d of 441 real property law

Regular, consistent, frequent personal guidance
Instruction and oversight
Superintendence

23

Written records for SP

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

24

Voting Stock

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

25

Records to maintain for 3 years

- 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

26

How to properly advertise listings
(2)

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

27

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

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