Laws of Agency and Fiduciary Duties Flashcards
Of the following loan advertisements, which would the real estate Commissioner not allow?
“Income and credit a must” All of these “First trust deed for real property available 4% per annum” “Get a loan today! Call 888-loan-by-phone”
“Get a loan today! Call 888-loan-by-phone”
An advertisement implying that a loan can be obtained over the telephone is not allowed.
What would happen if a real estate licensee misrepresented a property to a principal?
Criminal charges may be brought against them Civil lawsuit may be brought against them Any or all of these Disciplinary action by the Real Estate Commissioner may be brought against them
Any or all of these
There are three bodies of authority. The first is the real estate commissioner’s rules and regulations. The second is the CA civil codes. The third is CA criminal codes. All three could apply to this misrepresentation by the real estate licensee.
A broker places trust funds into the firm’s trust account. Which of the following statements is correct regarding earned interest on funds that are placed into the firm’s trust account?
All interest earned goes to the earnings of the real estate firm The broker cannot receive interest on trust funds either directly or indirectly The interest can be used to pay for service fees for operating the trust account Trust accounts are not interest earning accounts
The broker cannot receive interest on trust funds either directly or indirectly
Brokers cannot receive interest on earnings in a trust account directly or indirectly
David hired Broker Kim to sell his penthouse condo in Miami. As part of the agreement, Broker Kim agreed to advertise the sale of this property in a magazine that Broker Letty publishes monthly to other real estate brokers and agents. For this additional service, David paid Broker Kim $500 for the magazine advertisement when they signed the listing agreement. Where must this money be deposited?
Into Broker Kim’s bank account and there must be a written receipt for the funds that refers to the cost of the advertisement in the magazine Into Broker Kim’s personal bank account to do what she wishes with it Into the trust account and used only to pay for advertising expenses None of these. Funds cannot be received from a client to pay for advertising
Into the trust account and used only to pay for advertising expenses
Advanced advertising fees must go into a trust account and can only be used to pay for advertising expenses.
Sam is selling a timeshare at Deer Run. He mailed an advertising pamphlet to 100,000 residents offering a chance to win an 80 inch flat screen television. Sam failed to disclose that it is required to attend a Deer Run sales presentation to have a chance at winning the prize. All new owners became prize winners. Which of the following statements is correct?
Prizes are not allowed when you must have attended a sales presentation all of these The attendance of a sales presentation must be disclosed when offering a prize or gift Current property owners cannot be allowed to win the prize
The attendance of a sales presentation must be disclosed when offering a prize or gift
It must be disclosed if a visit or attendance of a sales presentation is required in order to win a prize.
To negotiate the sale of an existing promissory note that is secured by real property, and working on behalf of someone for commission, you must be:
an experienced real estate investor a licensed real estate broker or salesperson a loan broker none of these
a licensed real estate broker or salesperson
This question describes a person who holds a real estate license.
A seller sold their property and is carrying the loan for the sale of the property. The note is secured by a purchase money deed of trust. The seller then hired a broker to service the loan. If the broker takes on this responsibility, what does the law require the broker to do?
The broker cannot do this. They are not a mortgage lender Place an ad in the local paper disclosing they are doing such an action Get a mortgage license Have authorization in writing from the holder of the note
Have authorization in writing from the holder of the note
This is required by state law.
A licensed real estate agent can legally represent a principal in the transaction of:
any registered mobile home any used mobile home any brand new mobile home any mobile home
any registered mobile home
A mobile home that has been registered and meets the requirements of the Health and Safety Code is considered real property and can be bought and sold by a real estate licensee.
As a real estate licensee, you may act as an agent for the principal in the sale of some mobile homes. The following actions are all against real estate regulations and you may face disciplinary actions from the Real Estate Commissioner, except for which one?
Advertising a mobile home as new when it is used As a licensee, you sell a mobile home which is over 8 feet wide and over 40 feet in length If payment by a check is refused by a bank and you submit it for payment anyway Not providing a properly endorsed certificate of ownership from the seller to the buyer
As a licensee, you sell a mobile home which is over 8 feet wide and over 40 feet in length
As a licensee, you can transact a sale of a mobile home over 8 feet wide and 40 feet long, however you must be open and honest with your advertising, you must deliver the title to the buyer, and you must also only pay fees with a check that will clear the bank.
Claudia is an owner of a management company that manages the affairs of sports stars and public figures. She advertises and sells real property for her clients. Who would prosecute Claudia if she violates any real estate laws?
The local real estate association The Bureau of Real Estate The District Attorney The CA Real Estate Association
The District Attorney
Any violations of real estate law would require prosecution by the District Attorney. Claudia may have her license revoked by the BRE.
What are the responsibilities of a real estate licensee when they advertise on the internet?
The licensee must properly supervise any non-licensee who responds to inquiries The licensee is the only one who can handle inquires The licensee is the only one who can handle inquires and must do so within 48 hours The licensee cannot work with anyone out of the county in which they live
The licensee must properly supervise any non-licensee who responds to inquiries
A non-licensee who responds to real estate inquiries must be properly supervised by a licensee.
Which of the following terms refers to a formal declaration (not an oath), and expects the declarer to be honest and truthful?
An affirmation Verification Acknowledgement Affidavit
An affirmation
When there is an affirmation, it is considered a formal declaration. However, you are not under oath when declaring an affirmation.
A real estate broker who runs a local real estate office is required to have written employment contracts with:
each member of the staff the parking attendant only the receptionist all members of the sales staff including those who a hold real estate license
all members of the sales staff including those who a hold real estate license
Real estate law requires written employment contracts for all salespeople in a real estate office that are working for that broker.
When a homeowner decides to lease out their residential property, how can the lessor determine the amount that can be legally charged for the security deposit?
Whether the tenant is single, married, has children and/or a pet If the rental unit is furnished or not The number of bedrooms and bathrooms The square footage of the entire lot
If the rental unit is furnished or not
If the rental unit is furnished, the lessor can charge a higher deposit.
Of the following, which is fraudulent?
Representing a clear falsehood Representing someone forced into a contract Representing knowledge of the falsehood all of the these
all of the these
All of these are fraudulent representations.
What is the statutory maximum amount that may be paid from the Consumer Recovery Account to help with claims against a licensee for judgements?
total aggregate maximum of $50,000 per licensee total aggregate maximum of $75,000 per licensee total aggregate maximum of $100,000 per licensee total aggregate maximum of $250,000 per licensee
total aggregate maximum of $250,000 per licensee
The Consumer Recovery Account total aggregate maximum payment is $250,000.
A listing to sell a mobile home expires and the listing is not extended. How long does the agent have to remove all signs and lockboxes from the property?
up to 30 days up to 10 days up to 20 days 48 hours from expiration or termination of the listing
48 hours from expiration or termination of the listing
Once a listing is expired or terminated, the broker has 48 hours to remove all signage and lockboxes.
It is considered commingling when a broker:
deposits $200 into the trust account to pay for trust account fees deposits money from multiple people into the same trust account deposits funds into the trust account that the broker received from a renter for a security deposit on a property that the broker personally owns. all of these are commingling
deposits funds into the trust account that the broker received from a renter for a security deposit on a property that the broker personally owns.
If the broker owns the property and deposits the security deposit into the trust account with other trust funds, this is considered commingling.
A real estate agent placed a real estate ad that reads “2 bedroom and 2 bathrooms, putting range, and outdoor pizza oven. Only $385,000! Call 999-999-9999”. This type of advertising is known as:
blind advertising acceptable advertising false advertising misleading advertising
blind advertising
This is blind advertising because there is no distinction if this ad was placed by a real estate agent or the homeowner. Blind advertising is not allowed.
Of the following, who is authorized to manage property for the public?
a business manager A certified property manager designee any of these a licensed real estate broker
a licensed real estate broker
Managing property is a real estate action and requires a licensed professional.
What happens when a real estate licensee does not renew their license before it expires?
The licensee must forfeit their real estate license The licensee must pay proper fees for reinstatement, and will only receive a restricted license for 90 days, then they will be fully reinstated. The licensee has two years from the expiration date to renew and pay a late fee, however they do not have to retake the state exam The licensee must pay a fine and take real estate classes again, then reapply for a license
The licensee has two years from the expiration date to renew and pay a late fee, however they do not have to retake the state exam
Licensees who allow their real estate license to lapse have a two-year grace period after their license expires to renew it and pay a late fee. The licensee does not have to retake the state exam (as long as this is done within two years). If more than 2 years have passed before the agent renews their license, they would have to retake the state exam.
A brokerage aspires to be a competitive and profitable business when calculating their office fees. What would be the correct way for a broker to properly run their business and charge the right amount for “desk fees” ?
Take annual profit and subtract expenses and divide that by the number of salespeople Divide the brokerage’s total commissions earned by the number salespeople any of these Divide the operating expenses (salaries, rent, insurance etc.) by the number of salespeople
Divide the operating expenses (salaries, rent, insurance etc.) by the number of salespeople
You calculate desk fees by taking the sum of the operating expenses and dividing them by the number of salespeople. This is the breakeven amount that must be produced by each salesperson for the company to stay in business.
What does “company dollar” refer to?
Income of an office after all commissions and expenses are subtracted Money required to set up a real estate office for the first time Money required for in-house counsel Income of an office after all commissions are subtracted
Income of an office after all commissions are subtracted
The “company dollar” is the amount of money left over after all commissions are subtracted and paid out.
When is a structural pest control report required?
With every sale in California all of these When buying a property and using FHA or VA Loans With every sale in California of a wood framed property
When buying a property and using FHA or VA Loans
When using FHA or VA financing, a pest control report is needed in areas where pests, such as termites, are found.
How would the Real Estate Commissioner cancel the approval of a new subdivision?
Issue a desist and refrain order Ask the attorney general to rescind and cancel the approval Have the local mayor cancel and rescind the approval Send a letter to the developer asking them to stop building and refund the owners from the Recovery Account
Issue a desist and refrain order
If the Commissioner wants to rescind the approval of a subdivision, they would send a desist and refrain order to stop the developers.
Sandra, an unlicensed employee for a real estate agent, goes door knocking and hands out current listings in the area. She also makes calls for the real estate agent looking for buyers and sellers. Is this allowed under real estate law?
This is unlawful for the unlicensed employee This is unlawful for the licensed real estate agent This is unlawful for both Sandra and the licensed real estate agent This happens all the time and is fine to do
This is unlawful for both Sandra and the licensed real estate agent
Going door knocking and distributing flyers does not require a real estate license, while telephone solicitations do require a license. Because the licensee supervises the non-licensee, both of these individuals have violated the real estate law.
A broker has an advertisement that states: “If you reference this advertisement and you buy or sell a property with me, I will give you a $1,000 gift card.” This is:
not allowable to anyone illegal. A broker cannot give $1,000 to the buyer allowable, as long as it’s open to everyone who buys and sells with the broker illegal. A broker cannot give $1,000 to the seller
allowable, as long as it’s open to everyone who buys and sells with the broker
A broker can share commission or give anything of value as long as the principal is aware.
When an FHA loan is arranged, when does a copy of the HUD booklet “settlement cost and you” need to be provided to the buyer?
Within 6 business days It does not have to be provided as long as the loan costs and information has been disclosed properly Within one week Within 3 days of the loan application
Within 3 days of the loan application
The HUD booklet must be provided to the borrower within three days of the FHA loan application.
