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Real Estate Licensing > Module 16 > Flashcards

Module 16 Flashcards

1
Q

A license is required when

A

Handling property of another

For Compensation

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2
Q

Requirements to get a License

A 
18 years old
Application
Application Fee
Complete 75 hr course w/in 3 years
Good Moral Character 
       Background Check
       Entitled to a hearing
Pass School Exam
Pass State Exam
Score NOT public
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3
Q

Exemptions from Licensing (NOT required) (7 items)

A
  • Individuals Selling Own Property
    - Includes Corporations and Entities
    - Includes Their Own Employees & Staff (W2)
  • Attorneys at Law
  • Criers of Sales
    -Auctioneers NEED a license
    - Licensed as Both Auctioneer & Real Estate Prof.
  • Attorney in Fact Utilizing Power of Attorney
  • Trustees, Guardians, Executors Acting Under Court
    Order
  • Salaried Employees of Brokerages & Unlicensed
    Assistants
    - May perform admin functions
    - May NOT show properties
    Host Open Houses
    Give Advice
    Cold Call
  • Salaried Leasing agents working for a prop manager
    - May provide leasing info, accept applications,
    complete lease forms, show properties
    - May NOT negotiate payments or lease terms.
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4
Q

Referral fees of Out of State Brokers

A

May receive referral fees if licensed in another state

Must be licensed in NC if doing biz here

If licensed elsewhere, may have education waived, may have national exam waived, when obtaining a NC license

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5
Q

Limited Commercial Brokers License- Out of State Brokers

A

Licensed in another state

Practicing exclusively commercial real estate

Must work under Supervision of a Broker ( cant be PB)

Must file application, no test or education

All money must stay in NC Trust Account

Must renew Annually

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6
Q

Rules to Become a BIC

A

At least two years full time practice of 4000 hours in 2 out of last 5 years

Must NOT be a PB

Submit a Designation Form

Complete a 12 hour BIC course w/in 120 days

BIC course is taught by the Commission

Failure to complete the course = Automatic termination of BIC status

Every Practicing Entity/ Office/ Location needs a BIC

One BIC per office

Even a sole proprietor who

 - Advertises or promotes services
 - Handles Money of Another in Trust
 - Works with ONE or More licensees

BIC must compete a BICAR Course every year

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7
Q

Brokers can be BIC eligible

A

NOT actively working as a BIC

Employed by a FIRM, able to be a BIC if requested

MUST still take BICAR every year

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8
Q

DUTIES of a BIC (10 items)

A
  • Supervise ALL activity of PB
    - Including completion of post licensing classes
  • Handle Admin duties of a Brokerage
  • Supervise ALL licensees as to Handling of Money
  • Supervise ALL licensees as to Compliance with the LAW
  • Retain Copies of ALL agent POCKET CARDS
  • BIC Keeps FIRM Pocket Card
  • Display in Office
    • License of the BIC (Certification)
    • License of the Firm
  • Maintain all records (for 3 years) Make them available for
    inspection
  • Maintain the Trust Account
  • Supervise ALL brokers in regard to Agency & Disclosure
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9
Q

Termination of BIC Status

A
  • Failure of Complete the 12 hr BIC Course
  • Brokers License Expires
  • License is suspended, revoked or surrendered
  • Become inactive for Failure to complete mandatory CE
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10
Q

Elimination of PB Status

A
  • Everyone starts out as a PB
  • PB MUST work for a BIC with Full Supervision
  • 3 years to complete 90 hours of post licensing
    - 30 hours per year
  • Can complete sooner
  • Deadlines are from the DATE of Licensure
  • Failure to complete = Inactive Status
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11
Q

Continuing Education

A
  • Must have 8 hours a year by June 30th
    • courses cease on June 10th
  • Every licensee must take 4 hour mandatory update
    course
  • BIC’s MUST take a 4 hour mandatory BICAR Course
  • BICAR- Broker in Charge Annual Review
  • Remaining hours are elective courses
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12
Q

License Renewal

A
  • All licensees renew on June 30th of every year
  • Must have education completed by June 10th
  • Complete 8 hours of CE & Pay fee
  • Failure to renew = Expired License
  • No compensation may be earned when expired
  • Can renew up to 6 months late (cannot practice)
  • After 6 months commission may impose additional
    education
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13
Q

Active vs. Inactive Licenses

A
  • PB licenses INACTIVE unless assigned to a BIC
  • BIC notifies commission of Affiliation of PB
  • BIC MUST notify within 10 days of NON affiliation
  • Can’t engage in real estate when INACTIVE
  • Commission concerned with when fees
    • earned vs. received
  • Firms are INACTIVE w/o BIC
  • Must make up 1 year deficiency in education plus
    current year up to max of 16 hours
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14
Q

Additional Licensee Requirements

A
  • Brokers carry pocket cards at all times
  • All contracts & disclosure gets broker license #
  • Commission has home & business address
  • Must notify of address changes within 10 days
  • Must notify of criminal convictions within 60 days of
    conviction
  • Brokers work for 1 firm or BIC at a time
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15
Q

Pocket Cards contain

A

NAME
License #
Type
Expiration date

Does NOT contain
Firm
Discipline
or Active/Inactive

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16
Q

Firm and Entity Requirements (7 items)

A
  • Every entity other than sole proprietor needs a FIRM
    license
  • Submit an application
  • 10 day period for notice of changes
  • Firm licenses contain
    • Entity name & secretary of State ID number
    • Firm License #
    • Qualifying Broker
  • Qualifying Broker responsible for ALL compliance
  • Can renew 45 days prior to expiration
  • Expires June 30th every year
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17
Q

Advertising (4 items)

A
  • PB can NOT advertise w/o BIC approval
  • PB need to include Firm/Broker name
  • Cannot display signs without consent
  • No blind ads- must indicate real estate professional
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18
Q

Fees & Compensation (6 items)

A
  • Can’t get compensation without principal authorization
  • Can’t get compensation without disclosure & consent of
    Client
  • Disclosures must be in writing
  • Don’t have to disclose fees to third parties
  • Can’t give compensation to unlicensed people
  • Exception for Travel Agents making vacation rentals
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19
Q

Broker Price Opinions (3 items)

A
  • Brokers may create opinions of Sales Price (BPO’s) &
    get paid
  • DO NOT CALL them appraisals or Estimates of Value
  • Provisional Brokers may NOT perform BPO’s
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20
Q

Agency Agreements & Disclosure

A
  • All Agreements in writing and signed
  • Buyer agreements CAN wait until Time of Offer
  • Must provide brochure “Working With Agents” at FIRST
    substantial contact
  • Dual & Designated Agency require disclosure & consent
  • PB & BIC cannot be Designated agents in the same
    transaction
  • Dual & Designated agency Are limited forms of
    representation
  • Dual Agents MAY NOT Disclose
    • Prices and Terms Clients would accept
    • motivations for Transaction
    • Confidential Information
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21
Q

Basic Document Principles (4 items)

A
  • Can’t draft legal documents
  • Everyone gets a copy of everything they sign
  • Deliver ALL documents immediately (never later than 5
    days)
  • Exception for leases to owners within 45 days
22
Q

Sales and Purchase Agreements cannot use preprinted forms that:

A
  • Forfeits Earnest Money to the Broker

* Disclaims liability for Brokers Actions

23
Q

Property Disclosure Statement

A

Completed by all owners unless they are specifically exempted ( trusts, family members, Foreclosure)

24
Q

Do owners have to disclose?

A

No, they may choose no representation

25
Q

Cannot disclose offers of one party without

A

the Competing parties consent

26
Q

Retention of Record and Documents

A
  • Must keep records for three years
  • Three years form termination of relationship or closing
  • All contracts & Agreements
  • Trust and Escrow Records
  • Disclosure Documents
  • Closing Documentation
27
Q

Trust Account Requirements

A

Must have a Trust or Escrow Account
The Account must be a demand account
- Federally insured (FDIC)
- Legally doing business in this state
- Bank doesn’t have to be located here
- All records must be maintained
Commission may subpoena records & witnesses
Must balance & reconcile monthly
May be interest bearing with consent
Must reply to all client money requests within 10 days

28
Q

PB must deliver Trust account deposits

A

to BIC immediately

29
Q

Money must be deposited in trust account within

A

3 days

BIC (broker) may hold until contract acceptance

30
Q

Due Diligence Money goes

A

Straight to the seller, do not deposit

- buyer controls until Delivered to seller

31
Q

Trust Money

A

Cannot convert or commingle
Records always available for inspection
Officers of HOA’s are exempt even IF brokers
Must safeguard money

32
Q

Once trust money is deposited it cannot be distributed without

A

Mutual agreement of the parties or

by Court Order

33
Q

Commission may Suspend, Revoke, or Deny Licensees for

A
  • Misrepresentations & Omission
  • False Promises
  • Pursuing Course Misrepresentation
  • Acting for more than one party without consent
  • Representing multiple parties without disclosure &
    consent
  • Failing to Properly Remit Monies
  • Being Unworthy of Incompetent
  • Paying real estate commissions to unlicensed people
  • Committing Fraud, dealing dishonestly
  • Failing to Deliver Documents
  • Failing to Review closing statements for Accuracy
  • Getting a license by false or fraudulent means
  • Getting convicted of fraud or moral turpitude
  • Violating provisions in Sale of Personal Real Estate
  • Disciplinary Action on Another Professional License
34
Q

Education & Recovery Fund

A
  • Exists for Consumers injured in Real Estate
  • Commission may use for education
  • Must file lawsuit against Broker & Notify commission
  • Must get judgement that is Uncollectible
  • Maximum amount is $50,000 per consumer
  • Also limited to $25,000 per year, max of $75,000 per
    broker
  • Spouses cannot recover
  • Automatic suspension of Broker until fund repaid
35
Q

Statute of Intestate Succession

A
  • Governs the distribution of estates out of probate

* Utilized when someone dies intestate (w/o will)

36
Q

Condo Act

A
  • Requires public offering statement prior to sale
  • Public Offering Statement contains disclosures to be
    made to consumers
  • Consumers have a 7 day right of rescission
37
Q

NC Time Share Act

A
  • Applies to 5 or more Time periods over period longer
    than 5 years
  • Must get certificate of registration for the project
  • Requires a Real Estate License
  • Developer must register purchase within 6 to 45 days
    (purchaser may register)
  • Must have an Independent Escrow Agent with bank
    located in this state
  • Borrower gets a Public Offering Statement
    • Obligations of the Purchaser
    • Dates of Availability of Amenities
    • Specific Terms of Agreement
    • Notice of Right to Cancel
  • Purchaser has 5 day right to cancel (cannot be waived)
  • Must refund all money within 30 days
  • Commission may fine developer $500
  • Additional securities license required
38
Q

Mechanics Lien Statute

A
  • Grants priority to contractors, subcontractors, suppliers
  • Must record within 120 days of work completion
  • Must file lawsuit to foreclose within 180 days of work
    completion
  • Effective date of the lien is the date work started
39
Q

Machinery Act

A
  • Governs Real Estate Taxes
  • Sets an Octennial Appraisal Requirement (8 years)
  • Horizontal Adjustments can occur every four years
  • Rates adjust every year
40
Q

Homestead Exemption

A
  • Protects home equity from general judgement creditors
  • Requires 2 years of residency
  • Doesn’t apply to mortgages or Taxes (Judgement
    Creditors)
  • Protects $30,000 per person/ over 65 protects $60,000
41
Q

NC Subdivision Statute

A
  • Governs a Division of Land into parcels of two or more
  • Exempts lots of 10 acres or more
  • Exempts a Single Owner when dividing a lot of up to 2
    acres into 3 lots
42
Q

Mandatory Street Disclosure Law

A
  • Must Disclose whether streets are public or private

* Must disclose who maintains the streets

43
Q

Excise Tax Statute

A
  • Transfer Tax on Real Estate transfers
  • Round up to nearest $500
  • Tax is $1 for each $500 of Value
44
Q

Conner Act

A
  • Requires recording of certain documents
  • DREAMOIL, Deeds, Restrictive Covenants, Easements,
    Assignments, Mortgages, Options, Installment Land
    Contracts, Leases longer than 3 years.
45
Q

Statute of Frauds

A
  • Requires contracts for the exchange of Real Estate to be
    in writing
  • DREAMOILS, Deeds, Restrictive Covenants, Easements,
    Mortgages, Options, Installment Land Contracts, Leases
    for Longer than 3 years, Sales Contracts
46
Q

Enabling Act

A
  • Confers zoning power on municipalities & local

authorities

47
Q

NC Land Installment Contracts

A
  • Seller must record within 5 days of Execution
  • Buyer has 3 day cancellation period
  • Buyer must be given 30 days to cure default prior to
    foreclosure
48
Q

NC Landlord Tenant Act & Prop Management

A
  • Fresh Batteries at start of tenancy/ tenant replaces
    during the lease
  • Max Security Deposits
    • Week to Week= 2 weeks
    • Monthly = 1.5 months
    • Annual = 2 months
    • Return Deposit (30 Days interim account/ 60 days for
      final)
  • No deposits on Assistive Animals
  • No Self Help- Landlords Breach is constructive eviction
49
Q

NC Vacation Rental Act of 2000

A
  • Property utilized for vacation purposes
  • Anything less than 90 days must
    • be in writing
    • applies to all landlords, not just licensees
  • Travel Agent Fee Allowed
50
Q

Good Funds Act

A
  • Attorney May not distribute any funds until recording
  • Recording is not the same as settlement
  • All monies in excess of $5,000 must be verified
  • Brokers responsible for accuracy of HUD
  • Brokers must deliver HUD within 5 days of Closing
51
Q

Residential Square Footage Guidelines

A
  • Living area is heated with a conventional source and
    finished
  • Measure exterior walls or measure interior & add 6” for
    each wall
  • For Dwellings sharing a wall- measure Interior & Add 6’
    for shared wall
  • May reasonably rely (absent red flags) on the
    measurements of
    • listing agents
    • other professionals including appraiser
    • dont rely on owner, tax records, documents from
      earlier transaction
  • Don’t include external chimney space
  • Include stairs in the area from which they descend
  • Include area unde the stairs in lower level
  • Sloped Ceilings- First floor 7’, second floor 5’
  • Include Bonus Rooms if accessible through living area
  • Include furnace room if accessible through living area
  • Include storage if accessible through living area &
    heated
  • Condominiums DO NOT include wall thickness of
    common walls

Real Estate Licensing (42 decks)

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