Ch. 1 - Legal Issues and Risk Management Flashcards Preview

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Flashcards in Ch. 1 - Legal Issues and Risk Management Deck (42)
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1

The relationship of their agents and their principals.

agency

2

A person who represents another person in a fiduciary relationship.

agent

3

An agreement between a buyer and a broker for the broker to provide services to a buyer for compensation. The broker may be acting as a single agent, a transaction broker, or a non-representative.

buyer brokerage agreement

4

A residential homeowners association in which membership is a condition of ownership of a unit in a part of a residential development that is authorized to impose a fee that may become a lien on the parcel.

community association

5

A disclosure form that allows a single agent to become a transition broker. The notice must be signed by the principal before the broker can make the change.

Consent to Transition to Transaction Broker Notice

6

A person who works with a sales associate or a broker. While the person could be a principal, the usual definition is that the broker is either a transaction broker or has no brokerage relationship with the person.

customer

7

A sale associate who is appointed by a broker as a single agent for a buyer or a seller in a nonresidential transaction when another sales associate in the firm has been appointed as the single agent for the other party in the transaction. Both buyer and seller must have assets of at least $1 million and agree to the arrangement.

designated sales associate

8

An illegal arrangement whereby the broker tries to represent both the buyer and the seller in the same transaction.

dual agency

9

In real estate, a statement made by a licensee or party in a real estate transaction that is not factual.

false or misleading statement

10

A relationship of trust and confidence between an agent and principal.

fiduciary relationship

11

An amendment to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that exempts from liability landowners who made reasonable inquiries about hazardous substances before purchasing the property.

innocent purchaser status

12

An important fact that may affect a buyer's decision to buy or seller's decision to sell. Licensees must disclose facts that materially affect the value of residential property.

material fact

13

A false or misleading statement made intentionally or unintentionally, or the failure to disclose a material fact.

misrepresentation

14

A disclosure that must be given by a licensee who does not represent a buyer or a seller before entering into an agreement or showing a property.

No Brokerage Relationship Notice

15

(1) The person who enters into a fiduciary relationship with a single-agent licensee. (2) The amount of money remaining due on a mortgage loan.

principal

16

A form designed for disclosure to a buyer of any property defects. The form is normally signed by the seller, and the buyer signs a receipt that the buyer has received the disclosure.

property condition disclosure

17

A colorless, odorless gas occurring from the natural breakdown of uranium in the soil. Many experts believe radon gas to be the second leading cause of lung cancer.

radon gas

18

A broker who represents either the seller or the buyer in a real estate transaction, but not both.

single agent

19

A licensee who has limited representation to the buyer and/or the seller in a transaction. Instead of being an advocate for the buyer or the seller, the licensee is working for the contract.

transaction broker

20

1. A broker need NOT give a brokerage relationship disclosure when the property being shown is a
a. triplex.
b. single-family home valued at more than $1 million.
c. seven-acre tract zoned for agricultural use.
d. nonresidential property.

d. nonresidential property.

21

2. A principal is legally represented by a
a. single agent.
b. dual agent.
c. transaction agent.
d. non-representative.

a. single agent.

22

3. Which statement to a prospective buyer is NOT likely to increase a licensee's liability?
a. "The title to the property is clear; I checked the courthouse yesterday."
b. "I used to be in construction, so I can tell you that the roof is in perfect condition."
c. "You should be able to get information from the school board about which school your child would attend if you purchase this home."
d. " You don't need a home inspection because the house is only five years old."

c. "You should be able to get information from the school board about which school your child would attend if you purchase this home."

23

4. A licensee is legally required to disclose to a prospective homebuyer that
a. there was a recent murder in the house.
b. the roof occasionally leaks.
c. the occupant of the property is infected with human immunodeficiency virus.
d. the former owner was killed when he fell from the roof.

b. the roof occasionally leaks.

24

5. A broker may not legally work with a buyer or seller as a
a. transaction broker.
b. single agent.
c. dual agent.
d. non-representative.

c. dual agent.

25

6. A principal is responsible for the acts of her
a. transaction broker.
b. dual agent.
c. single agent.
d. non-representative.

c. single agent.

26

7. A student failed her sales associate post-licensing course for the second time. What are her options if she wishes to maintain her license?
a. She must wait 30 days and pass a different end-of-course exam.
b. She must take the 63 hour pre license course for sales associates and pass the course exam and the state exam.
c. She must retake at least 45 hours of the sales associate prelicense course and pass a course exam.
d. She must retake the course and pass the end-of-course exam.

d. She must retake the course and pass the end-of-course exam.

27

8. Which term is found in the Junk Fax Protection Act?
a. Innocent purchaser
b. Established Business relationship
c. Good-faith estimate of settlement costs
d. National register

b. Established Business relationship

28

9. Licensed sales associates working at the seller's single agent brokerage firm
a. may represent either the seller or the buyer in a transaction.
b. are legally bound to represent the seller.
c. may have another principal in the transaction.
d. may be transaction brokers for the buyer to ensure limited confidentiality.

b. are legally bound to represent the seller.

29

10. If a broker sells commercial property exclusively, she
a. must give the customer a No Brokerage Relationship Notice before showing property.
b. may be a single agent, transaction broker, a designated sales associate, or have no brokerage relationship with the customer.
c. must give the customer a Single Agent Notice before showing property.
d. may not be a single agent.

b. may be a single agent, transaction broker, a designated sales associate, or have no brokerage relationship with the customer.

30

11. In which status does a licensee NOT need to provide a written brokerage relationship disclosure notice?
a. Single agent broker.
b. Transaction broker.
c. Designated sales associate.
d. When acting with no brokerage relationship.

b. Transaction broker.