Maryland Regulatory Environment

Question 1

How many members are on the Maryland Real Estate Commission?

a. 5
b. 6
c. 9
d. 10

Answer 1

(c) 9
The Maryland Real Estate Commission has 9 members, who are appointed by the Governor. 5 of the Commissioners must be real estate brokers and 4 Commissioners are non-broker, public members.

Question 2

If the racial stability of an area is threatened by the volume of real estate transactions, the Real Estate
Commission may

a. create a racial diversity area.
b. declare the area a real estate conservation area.
c. suspend all residential real estate transactions.
d. require real estate licensees in the area to lower their commission rates.

Answer 2

(b) declare a real estate conservation area.

The Commission may declare an urban area a “real estate conservation area” if the Commission finds that the racial stability of the area is threatened by the volume of real estate transactions.

Question 3

Who conducts real estate licensee disciplinary hearings?

a. Department of Licensing
b. Real Estate Division
c. Department of Labor
d. Real Estate Commission and the Office of Administrative Hearings

Answer 3

(d) Real Estate Commission and the Office of Administrative Hearings

Hearings on disciplinary matters against real estate licensees are conducted by the Real Estate Commission and the Office of Administrative Hearings. The Office of Administrative Hearing hears most matters.

Question 4

What is the term of a Maryland Real Estate Commissioner?

a. 3 years
b. 4 years
c. 5 years
d. 6 years

Answer 4

(b) 4 years

A Maryland Real Estate Commissioner serves a 4-year term with no limit how many terms can be served.

Question 5

Regulations regarding the Real Estate Brokers law are issued by the

a. Attorney General.
b. Real Estate Commission.
c. Governor.
d. Real Estate Research Center.

Answer 5

(b) Real Estate Commission

Among other things, the Commission adopts regulations to implement the Real Estate Brokers law.

Question 6

Laws and regulations related to real estate licensing are enforced by the

a. Attorney General.
b. Department of Licensing.
c. Real Estate Commission.
d. Governor’s Office.

Answer 6

(c) Real Estate Commission

In addition, to adopting regulations the Commission enforces those regulations.

Question 7

If a complaint filed against a real estate licensee is not referred to an investigation, it must be

a. dismissed.
b. scheduled for a hearing before the Real Estate Commission.
c. transferred to the Circuit Court for a hearing.
d. transferred to the Office of Administrative Hearings.

Answer 7

(a) dismissed.

If a complaint is filed but not referred to investigation by the Commission, it must be dismissed.

Question 8

The Maryland Code of Ethics for real estate is adopted by the

a. Supreme Court.
b. Department of Labor.
c. State Legislature.
d. Real Estate Commission.

Answer 8

(d) Real Estate Commission

The Maryland Code of Ethics was adopted by the Real Estate Commission as a regulation.

Question 9

The Maryland Real Estate Commission

a. passes legislation related to real estate.
b. conducts disciplinary hearings regarding real estate licensees.
c. establishes compensation rates for real estate licensees.
d. resolves disputes between real estate licensees.

Answer 9

(b) conducts disciplinary hearings regarding real estate licensees.

Legislation related to real estate, or any other matter, is passed by a General Assembly. Compensation rates for real estate licensees are determined in the marketplace as a result of negotiations. Disputes between and among real estate licensees’ fees are generally handled by the courts.

Question 10

Recovery against the Real Estate Guaranty Fund cannot exceed

a. $10,000 per claim.
b. $15,000 per claim.
c. $50,000 per claim.
d. $100,000 per claim.

Answer 10

(c) $50,000 per claim.

The Real Estate Guaranty Fund has a $50,000 per claim limit.

Question 11

Penalties collected by the Real Estate Commission must be

a. placed in the General Fund of the State.
b. placed in a special Real Estate Education Fund.
c. awarded to anyone harmed by the violation.
d. placed in the Real Estate Guaranty Fund.

Answer 11

(a) placed in the General Fund of the State.

There is no special account for penalties collected by the Real Estate Commission. All penalties collected are placed in the General Fund.

Question 12

A disciplinary order may be appealed to the

a. Real Estate Commission.
b. Department of Labor.
c. Legislature.
d. Circuit Court.

Answer 12

(d) Circuit Court.

Either party aggrieved by the disciplinary decision of the Commission or Hearing Board may appeal the decision to the Circuit Court.

Question 13

The Maryland Real Estate Commission

Answer 13

▪ 9 Commissioners
▪ 5 real estate licensees, each with at least 10 years’ experience before appointment
▪ 4 consumers
▪ appointed by the Governor
▪ Secretary of the Commission appoints an Executive Director

Question 14

The Maryland Real Estate Commission

Answer 14

▪ 4 year terms
▪ no restriction on number of terms
▪ Chairperson elected by the Commissioners
▪ Governor may remove for incompetence or misconduct
▪ Commission meets monthly

Question 15

The Maryland Real Estate Commission

Answer 15

▪ Executive Director must have a broad knowledge of generally accepted practices in the real estate business and be reasonably informed of agency and contract law
▪ Executive Director may not be a real estate licensee in any state
▪ with 10 days’ notice, a member of the public may speak before the Commission

Question 16

The Commission may adopt regulations

Answer 16

▪ to carry out the Real Estate Brokers law
▪ for the conduct of disciplinary hearings
▪ to govern applications for licenses
▪ to provide a code of ethics to set standards of conduct for all real estate licensees
▪ Commission may not make a regulation that allows a conditional or temporary license

Question 17

A complaint

Answer 17

▪ may be filed by anyone including a Commissioner
▪ must be in writing
▪ must state specifically the facts on which the complaint is based
▪ may be accompanied by documentary or other evidence

Question 18

The Commission must review each complaint

Answer 18

▪ a complaint not referred for investigation must be dismissed
▪ if a complaint is dismissed, any Commissioner may file an exception to the decision
within 30 days from the date of the dismissal
▪ if, after the investigation, the Commission determines there is a reasonable basis for
disciplinary action, the investigation must be referred for a hearing

Question 19

Hearing before the Real Estate Commission

Answer 19

▪ specific notice requirements

• the hearing notice must be delivered to licensee at least 10 days before the hearing
• notice is given to broker if licensee is an associate real estate broker or a real estate salesperson

Question 20

Hearing before the Real Estate Commission

Answer 20

▪ the individual may represented at the hearing by an attorney
▪ if the individual fails or refuses to appear, the Commission may still hear and adjudicate
the complaint

Question 21

the Commission may summarily suspend a license if the licensee

Answer 21

▪ fails to account promptly for any money held in trust
▪ fails to display to the Commission all records, books, and accounts of any money held in trust
▪ has been convicted of a felony or fails to disclose that the licensee has been convicted of a felony

Question 22

Real estate “conservation areas”

Answer 22

For a violation, the Commission may

▪ reprimand a licensee
▪ suspend or revoke a license
▪ impose a $5,000 penalty for a first violation; impose a $15,000 penalty for a second violation, or impose a $25,000 penalty for a third violation

Question 23

Real estate “conservation areas”

Answer 23

the advertising suspension may not

▪ apply to advertising in regularly distributed newspapers, magazines, radio,
television, or telephone directories
▪ exceed 24 months in duration.

Question 24

The Commission has established a Real Estate Guaranty Fund to compensate, if necessary, parties damaged by the improper actions of licensees

Answer 24

▪ Fund must maintain minimum balance of $250,000
▪ each licensee must pay $20 to Fund upon issuance of license

Question 25

The Commission has established a Real Estate Guaranty Fund to compensate, if necessary, parties damaged by the improper actions of licensees

Answer 25

A party’s claim must fulfill the following requirements

▪ it must be based on an act or omission that occurred in the provision of real estate brokerage services by a real estate licensee or by an unlicensed employee of a real estate broker

▪ the claim must involve money or property obtained from a person by theft, embezzlement, false pretenses, or forgery or involve fraud or misrepresentation.

Question 26

The Commission has established a Real Estate Guaranty Fund to compensate, if necessary, parties damaged by the improper actions of licensees

Answer 26

▪ licensee responsible must reimburse the fund, with 10% interest
▪ license of offender is suspended until the fund is reimbursed and licensee applies for reinstatement