Flashcards in Chapter 5 - Real Estate Brokerage Operations Deck (71):
T/F All active Florida real estate brokers are required to have an office and to register to office with the Department of Business and Profession Regulation (DBPR)
What is the broker's primary office referred to as?
The principal office
Are sales associates permitted to open offices of their own?
No; they must be registered from and work out of an office maintained and registered in the name of their employer
T/F If a broker desires to conduct business from additional locations, the broker must register each additional location as a branch office and pay the appropriate registration fees.
Are registrations issued to branch offices transferable?
What is required of signs at real estate broker's principal and branch offices?
Must be easily observed and read by anyone entering the office
Must contain the following information: trade name (if one is used), broker's name, and the words " Licensed Real Estate Broker" or "Lic. Real Estate Broker"
What is a blind advertisement and is it permitted?
An advertisement that provides only a post office box number, telephone number, and/or street address
It is not permitted
What is the federal law concerning telephone solicitations?
The Telephone Consumer Protection Act of 1991
What does The Telephone Consumer Protection Act of 1991 cover and exempt?
It covers both interstate and intrastate telemarketing calls
It exempts political solicitations, telephone surveys, and charitable solicitations
How much will violators of The Telephone Consumer Protection Act be fined for each illegal call?
Up to $11,000
T/F Florida has made its registry part of the National Do-Not-Call Registry.
How much will violators of Florida's Telemarketing Act be fined for each illegal call?
T/F FCC rules mandate that it is lawful to send unsolicited advertisements to a residential or business fax machine without the recipient's prior express invitation or permission
False; it is unlawful
Sales associates who receive a binder deposit from a customer or principal must deliver it to their broker-employer when?
Immediately - no later than the end of the next business day
By when are broker's required to place trust funds into their escrow account?
No later than the end of the third business day after their sales associate has received it
When does the first day of the three-business-day time period begin?
On the business day after the check is given to the brokerage
What is commingling funds?
The illegal practice of mixing a buyer's, seller's, tenant's, or land-lord's funds with the broker's own money or of mixing escrow money with that broker's personal funds or brokerage funds
Misappropriation of another's property will expose the broker to:
Charges of conversion
What is conversion?
The unauthorized control or use of another person's personal property
What is conflicting demands?
When the buyer and seller make demands regarding the disbursing of escrowed property that are inconsistent and cannot be resolved
What must the broker do if he receives conflicting demands on escrowed property?
The broker must notify the FREC, in writing, within 15 business days of receiving the conflicting demands unless specifically exempted
What are the four settlement procedures?
Escrow disbursement order
What is mediation?
An informal, nonadversarial process intended to reach a negotiated settlement; the process is nonbinding
What is arbitration?
A process whereby, with the consent of all parties to the dispute, the matter is submitted to a disinterested third party. Each side presents its case to a third party, who makes a binding judgement in favor of one side or the other
What is litigation?
If the disputing parties cannot agree, a disputing party may file a lawsuit so that the matter can be resolved in a court of law
What is escrow disbursement order (EDO)?
A determination of who is entitled to the disputed funds
T/F The Time-Share Act prohibits a real estate licensee from collecting an advance fee for the listing of a time-share unit
Any broker or sales associate who furnishes rental information to a prospective tenant for a fee must provide the prospective tenant with a contract or receipt that contains a provision for repayment under specified conditions. What must the contract state?
That if the prospective tenant does not obtain a rental, he is entitled to be repaid 75% of the fee paid if requested within 30 days of the contract/receipt date
If information provided to a prospective rental tenant is not current or is inaccurate in any material respect, the broker must repay __________________ to the prospective tenant on demand.
The full fee
What are a couple of the federal antitrust laws?
The Sherman (1890), Clayton (1914), and Federal Trade Commission (1914) Acts
Are real estate brokers allowed to fix commissions or fees for the services they perform?
What is a kickback?
An unearned fee paid to a licensee associated with a real estate transaction for non-real-estate services (payment for something other than one of the eight services of real estate)
Are kickbacks legal?
Yes, as long as an unlicensed person pays the real estate agent for services to say the seller or buyer
What happens if a sales associate changes employer?
Their license ceases to be in force
They are required to notify the DBPR within ten days after the change by filing a Request for Change of Status form, disclosing the name and address of the new employer
What types of business entities may register as a broker?
Limited liability partnerships
Limited liability companies
What is a sole proprietorship?
A business owned by one person
What is a general partnership?
An association of two or more persons for the purpose of jointly conducting a business
What is a limited partnership?
One or more general partners and one or more limited partners
The limited partners must make an investment of cash or of property, but not of services
What is a limited liability partnership?
Limited liability partners are not liable for obligations or liabilities of the partnership arising from contract, errors or omissions, negligence, malpractice, or wrongful acts committed by another partner or by an employee, agent, or representative of the partnership
What is a corporation?
An artificial person or legal entity created by law and consists of one or more persons
What is a limited liability company?
A form of business organization that offers the best features of a corporation and partnership; it provides the owners protection from personal liability for business debts in the same way a corporation does, but the IRS treats an LLC as a partnership for tax purposes
What is a corporation sole?
An ecclesiastical or church organization; before dealing with a corporation sole, a broker should obtain a written opinion from a lawyer who has experience in such titles
What are the business arrangements and entities that may not register as brokers?
A corporation sole
A joint venture
A business trust
What is a joint venture?
A temporary form of business arrangement often encountered in the real estate business; normally used when two or more parties combine their efforts to complete a single business transaction or a fixed number of business transactions
What is a business trust?
A form of business entity that may be formed to engage in transactions involving its own real property; formed by any number of persons who make an investment at a stipulated amount per unit
What is an unincorporated association?
A group of people associated for some noncommercial common purpose; not regarded as partners and are not incorporated
A sales associate receives a binder deposit from a prospective buyer on Thursday morning. Later that same day, the associate gives the binder deposit to his broker. By the end of business on what day of the week must the broker deposit the funds into her escrow account?
Real estate brokerage trust funds may not be deposited into a
Life insurance company in Florida
In connection with escrow accounts, the Florida Real Estate Commission has rules and regulations that:
Prohibit the depositing of more than $1,000 of personal funds into a sales escrow account
Real estate sales associates who receive checks payable to them as deposits on the purchase of real property must:
Endorse the checks and immediately turn them over to their employers
T/F It is illegal for the broker to keep any earned interest even if the buyer and the seller give written permission.
T/F The escrow account may be either interest-bearing or noninterest-bearing.
T/F A broker may choose to have an attorney or a Florida title company maintain the escrow account.
T/F A broker must get written authorization from the buyer and the seller prior to placing escrow funds in an interest-bearing escrow account.
A dispute arises between the buyer and seller as to which one is entitled to escrowed property. The broker should first:
Notify the FREC, unless exempted from the notice requirements
A real estate sales associate decides to sell property he owns "by owner". What is true?
A the first point of meaningful negotiation, the licensee should disclose to prospective buyers that he is licensed as a real estate sales associate
An individual who paid for rental information but did not obtain a rental is entitled to repayment of:
75% of the fee if requested within 30 days of the contract/receipt date
A broker desires to keep an escrow account in an interest bearing account. Would this be legal?
Yes, if all parties to the transaction agree, in writing, that the funds will go into an interest bearing account and who is to receive the interest
A broker took earnest money from a buyer. He deposited the money in the trust account, but when his electric bill was due, the broker deposited the buyer's money into the broker's business account. This is:
How long does a sales associate have to deliver earnest money to the broker?
What is required on a broker's entrance sign?
Name of the broker
Broker of record's name
Name of firm or corporation or trade name along with at least one of the brokers
What must a broker do with his trust account?
Reconcile monthly with a statement of any discrpancies
Broker Paul from ABC Realty and Broker Shawn from XYZ Realty meet to play golf at the country club. During their round of golf and at lunch, both discuss how the cost of business continues to rise. They agree that they should each increase their commission rates. This discussion is:
A violation of the Sherman Anti-Trust Act
Which cannot register with the Department to perform real estate services to the public?
A corporation sole
John, the actively licensed broker in a partnership, has had his license revoked. The sales associate working for that partnership:
Will become involuntarily inactive, as the partnership will be cancelled
Three brokers get together and decide to form a corporation to sell real estate. They want to call their company "House of Brokers". Each broker wishes to maintain contact with the public. What is necessary to do this?
All three brokers must be active brokers, the corporation must be registered, and the trade name must be registered
Broker Sally wants to work out of a trailer at a new home site. She will negotiate deals here and do closings. What is true about this situation?
Because Sally conducts closings and negotiations here, this would be considered a branch office and must be registered with the FREC
The principal statutes affecting the investigation and litigation activities of the Antitrust Division are the:
Sherman and Clayton Acts
If the rental information provided by the broker or sales associate, for a fee, to a prospective tenant is not current or accurate in any material respect, the full fee shall be repaid to the prospective tenant upon demand. A demand from the prospective tenant for the return of the fee, or any part thereof, shall be made within ______ days following the day on which the real estate broker or sales associate had contracted to perform services to the prospective tenant.
_______ was enacted because Congress felt that consumers needed protection from unnecessarily high settlement charges caused by certain abusive practices that have developed in some areas of the country.
Real Estate Settlement Procedures Act (RESPA)