Real Estate Course Chapter 5 Flashcards Preview

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Flashcards in Real Estate Course Chapter 5 Deck (48):
1

Which business entity may NOT register as a real estate brokerage entity?

A)Limited partnership
B)Limited liability company
C)Sole proprietorship
D)Cooperative association

The answer is COOPERATIVE ASSOCIATION. A cooperative association IS ALLOWED to conduct commercial business and to convey, sell, or buy its own property, but it cannot be registered as a real estate broker.

2

Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation?

A)Susan must partner with a real estate broker in order for her license to be issued this way.
B)Susan has formed a real estate brokerage business as a limited liability company (LLC).
C)Susan is in violation of Florida license law.
D)Susan has formed a limited liability company (LLC) for income tax purposes only, and is employed by and registered under either a licensed real estate broker or an owner-developer.

The answer is D) SUSAN HAS FORMED A LIMITED LIABILITY COMPANY (LLC) FOR INCOME TAX PURPOSES ONLY

3

Two men enter into a business arrangement. The two parties agree that one party will be solely liable for the debts of the business and that the other party will be liable only for the amount of his cash investment in the business. Which type of business arrangement have they formed?

The answer is LIMITED PARTNERSHIP. A limited partnership is composed of one or more general partners and one or more limited partners. The limited partner must make an investment in cash or property, but not services. Limited partners are not liable to creditors of the partnership.

4

A licensed real estate broker has a successful real estate business. The broker has branch offices in Fort Myers, Naples, and Bradenton, Florida. The broker wants to close her Bradenton office and open a new branch office in Sarasota, Florida. What does he need to do?

THE BROKER MUST REGISTER THE NEW BRANCH LOCATION AND PAY THE BRANCH OFFICE LICENSE FEE. The new location must be registered and the fee paid. Registrations issued to branch offices are not transferable

5

What is the fine per telephone call for a violation of Florida's Telemarketing Act?

A)$1,000
B)$5,000
C)$10,000
D)$11,000

The answer is $10,000. Violators of Florida's Telemarketing Act may be fined $10,000 per call.

6

A sales associate receives an earnest money deposit on Saturday. When does the sales associate have to give the deposit to the broker?

The answer is MONDAY. The sales associate has until the end of the next business day to deliver the deposit to the broker.

7

Which settlement procedure involves a negotiated settlement between the disputing parties?

A)Escrow disbursement order
B)Mediation
C)Arbitration
D)Litigation

The answer is MEDIATION. Mediation is an informal, non-adversarial process intended to reach a negotiated settlement.

8

Mike Meyers, licensed real estate broker, is a sole proprietor who uses the trade name #1Service Realty. His wife Susan Meyers works with Mike and is a licensed broker associate. Of the following pieces of information that appear on the broker's entrance sign, which is optional under Florida license law?

A)#1Service Realty
B)Mike Meyers
C)Susan Meyers, Broker Associate
D)Licensed real estate broker

The answer is SUSAN MEYERS, BROKER ASSOCIATE. The names of sales associates and broker associates are not required to appear on the entrance sign. If the names of associates do appear on the entrance sign, the associate's license status must appear next to the nam

9

A real estate licensee advertises a property for sale that is listed by the company, but fails to disclose in the ad that the property is being advertised by a real estate company. This is known as what type of advertising?

The answer is BLIND. Blind advertising is advertising that fails to disclose the license name of the brokerage firm.

10

Which requirement must be accomplished to register a real estate brokerage as a general partnership?

REGISTER THE PARTNERSHIP IN THE NAME OF THE PARTNERSHIP WITH AT LEAST ONE PARTNER LICENSED AS AN ACTIVE BROKER.

11

The Sherman Antitrust Law and Florida antitrust laws prohibit which activity?

It is illegal for real estate brokers to conspire to fix commissions or fees for the services they perform. The amount of commission to be paid is negotiable.

12

Can a Sales Associate be a director or an officer of a Real Estate Brokers firm?

A SALES ASSOCIATE(OR BROKER ASSOCIATE) MAY NOT BE APPOINTED AS A DIRECTOR OF A REAL ESTATE BROKERAGE CORPORATION. However, A sales associate or broker associate may be shareholders of a real estate brokerage corporation.

13

A prospective tenant purchased rental information from a real estate brokerage company for $75. What recourse is available to the prospective tenant who purchased the information and found that much of the rental information was out-of-date?

THE TENANT SHOULD DEMAND WITHIN 30 DAYS A REFUND OF $75. If the information provided to a prospective tenant is not current or is inaccurate in any material respect, the broker must repay the full fee to the prospective tenant on demand if the claim is made within 30 days from the contract date.

14

A real estate broker does NOT have to report to the FREC conflicting demands regarding escrowed property if the escrowed funds are maintained by which method?

A)Attorney's trust account
B)The broker must report conflicting demands regardless of where the funds are escrowed
C)Florida savings association
D)Florida credit union

The answer is A) ATTORNEY'S TRUST ACCOUNT. Real estate license law governs only broker's escrow accounts held in Florida commercial banks, credit unions, or savings associations. Real estate license law has no authority over title company escrow accounts or attorney escrow accounts.

15

What amount of a broker's own personal funds may the broker place in the property management escrow account? Or the sales escrow account?
What amount is he keeps a combined account?

Property management account; $5000
Sales escrow account: $1000

If the account is combined: $5000

16

What is the maximum finder's fee that may be paid in the form of a credit toward rent paid to the tenant for referring a person to the management company if that person later becomes a tenant of the complex?

$50

A property management firm or an owner of an apartment complex may pay a finder's fee (or referral fee) of up to $50 to an unlicensed person who is a tenant of the apartment complex.

17

Which method is NOT one of the four settlement procedures available to the parties when there is an escrow dispute?

A)Litigation
B)Escrow disbursement order
C)Mediation
D)Stipulation

The answer is STIPULATION. A stipulation is an agreement as to the penalty reached when a licensee has violated license law.

18

Advertising rental property information that is materially inaccurate is which type of violation?

A)First degree misdemeanor
B)Third degree misdemeanor
C)Third degree felony
D)Second degree misdemeanor

The answer is A) FIRST DEGREE MISDEMEANOR. Advertising rental property information or lists that are not current or are materially inaccurate is a first degree misdemeanor

19

For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR?

FIVE YEARS REGARDLESS OF WHETHER TRUST (ESCROW) FUNDS WERE COLLECTED.

20

A seller wants to give something extra to the sales associate beyond the sale commission to be paid for a transaction. The seller decides to give the sales associate a shopping mall gift certificate. Which statement applies to this situation?

A)The seller can give the sales associate a gift certificate because it is not cash.
B)The seller cannot give the gift certificate to the sales associate directly, but may give it to the sales associate's broker with a note requesting that the gift certificate be given to the sales associate for fine service.
C)The only compensation that the sales associate may receive is part of the commission, regardless of circumstance.

The answer is THE SELLER CANNOT GIVE THE GIFT CERTIFICATE TO THE SALES ASSOCIATE DIRECTLY, BUT MAY GIVE IT TO THE SALES ASSOCIATE'S BROKER WITH A NOTE REQUESTING THAT THE GIFT CERTIFICATE BE GIVEN TO THE SALES ASSOCIATE FOR FINE SERVICE. All monies or other compensation earned by sales associates as a result of any real estate services must be paid to the sales associates by their employers and not directly by a buyer or seller.

21

A sales associate received an earnest money deposit on Monday. The sales associate gave the check to his broker on Tuesday. By end of business on which day must the check be deposited into the escrow account?

A)Wednesday
B)Monday
C)Thursday
D)Friday

The answer is C) THURSDAY. The broker has until the end of the third business day (Thursday) to deposit the funds. The three business-day time period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker. In this case, the first day of the three-business-day period is Tuesday.

22

A real estate brokerage office receives an earnest money deposit check on Thursday. By end of business on which day must the funds be deposited into the escrow (trust) account?

A)Friday
B)Monday
C)Wednesday
D)Tuesday

The answer is D) TUESDAY. Brokers must place trust funds into their escrow account no later than the end of business of the third business day following receipt of the funds.

23

A broker who has a good faith doubt regarding who is entitled to escrow funds should take which action?

NOTIFY THE FREC IN WRITING OF THE GOOD FAITH DOUBT WITHIN 15 BUSINESS DAYS.

24

Lori Sammis is a licensed real estate sales associate. Under which name may she register and be licensed?

A)Lori Sammis, PA
B)Lori Sammis and Company
C)Lori Sammis and Excel Realty
D)Excellent Service Realty

The answer is A) LORI SAMMIS, PA. Sales associates must have their license issued in their legal name. A sales associate may not be licensed or registered under a trade name. However, for tax purposes, a sales associate is allowed by law to form a professional corporation (PA), and in this case, the DBPR will issue the license in the licensee's actual (legal) name and include the entity designation (PA) after the licensee's legal name.

25

A broker made a request to the Commission that it issue an escrow disbursement order (EDO) regarding disputed escrowed funds. Prior to the EDO being issued, the escrow dispute was settled between the parties. How long does the broker have to notify the FREC that the matter has been resolved?

A)15 business days
B)30 calendar days
C)24 hours
D)10 business days

The answer is D) 10 BUSINESS DAYS. If a broker requests an EDO and the escrow dispute is either settled or goes to court before the EDO is issued, the broker must notify the FREC within 10 business days

26

Which statement is TRUE regarding interest-bearing escrow accounts?

A)The broker must get written permission from all parties to the transaction before placing the funds into an interest-bearing account.
B)It is illegal for the broker to keep any interest earned on escrow funds.
C)Florida license law requires the interest accrued on escrowed funds to be credited to the buyer because it is the buyer's earnest money deposit.
D)Brokers may make an office policy that all escrow funds must be placed in an interest-bearing account to help cover the costs of maintaining the account, and are not required to disclose this in each sale contract because it applies to all transactions.

The answer is A) THE BROKER MUST GET WRITTEN PERMISSION FROM ALL PARTIES TO THE TRANSACTION BEFORE PLACING THE FUNDS INTO AN INTEREST-BEARING ACCOUNT. If an escrow account is an interest-bearing account, the broker must get written permission from all parties before placing the funds into the account. The written authorization must specify who is entitled to the interest earned.

27

A sales associate may hold which position?

A)Owner of a sole proprietorship real estate business
B)General partner in a real estate brokerage partnership
C)Limited partner in a real estate brokerage limited partnership
D)President of a real estate brokerage corporation

The answer is C) LIMITED PARTNER IN A REAL ESTATE BROKERAGE LIMITED PARTNERSHIP. A sales associate or broker associate may not be an officer or director of a real estate brokerage corporation. Sales associates may be limited partners in a limited partnership

28

Real estate escrow funds may NOT be placed in which type of depository?

A)Commercial bank in Florida
B)Stock brokerage house
C)Attorney's trust account
D)Florida savings association

The answer is B) STOCK BROKERAGE HOUSE. Brokers may maintain an escrow account in a Florida commercial bank, credit union, or savings association. Some brokers instead choose to have a Florida-based title company that has trust powers maintain the escrow funds, or alternatively, if designated in the sale contract, a Florida attorney may escrow the funds.

29

In the event of disputed funds, a broker may request that the Florida Real Estate Commission issue an escrow disbursement order (EDO).

A) True
B) False

The statement is TRUE. A broker may request that the Commission issue an EDO to determine who is entitled to the disputed funds. However, the Commission may choose not to issue an EDO, forcing the broker to choose from one of the other settlement procedures: mediation, arbitration, or litigation.

30

TRUE OR FALSE All active Florida real estate brokers are required to have an office.

The statement is TRUE. Active real estate brokers are required to have an office. Additionally, the office must be registered with the Department of Business and Professional Regulation

31

TRUE OR FALSE: A licensee who violates the federal telephone solicitation law may be fined up to $10,000 per call.

The statement is FALSE. Violators of the federal Telephone Consumer Protection Act may be fined up to $11,000 for each illegal call.

State law fine = $10,000
FEDERAL law fine = $11,000.

32

What is an ostensible partnership?

An ostensible (or quasi partnership) is not a real partnership, furthermore, it is considered to be fraudulent and deceitful if the public is deceived into believing that a partnership exists.

33

TRUE OR FALSE: A Corporation sole is permitted to register as a real estate broker.

The statement is FALSE. A corporation sole cannot be registered as a real estate broker. A corporation sole is an ecclesiastical or church organization, usually headed by a bishop or other clerical official who has been empowered by a church to hold title to church property. Before dealing with a corporation sole, a broker should obtain a written opinion from an attorney who has experience in such titles.

34

TRUE OR FALSE: The office sign at the entrance of the brokerage business must display the brokerage street address.

The statement is FALSE. There is no requirement to include the brokerage office street address on the entrance sign. The office sign must contain the broker's name, trade name (if one is used), and the words "Licensed Real Estate Broker" or "Lic. Real Estate Broker."

35

TRUE OR FALSE: After discussion with the broker, a real estate licensee offers to share part of the commission with the buyer. The arrangement is disclosed to all interested parties. This is an example of a legal kickback or rebate.

The statement is TRUE. Florida law allows a real estate licensee to share part of the commission with the buyer or seller in a real estate transaction, provided the rebate is disclosed to all interested parties. Sharing a portion of the commission with a party to the transaction is an example of a legal kickback or rebate

36

Explain the FSBO exception related to the Do not call registry related to Florida and Federal law

There is a limited exception in Florida that DOES NOT apply on the Federal level.

37

What are the call times restricted to on the Do not call list

8am - 9pm

38

Define a blind advertisement?

Advertisements that fail to disclose the license name of the brokerage firm

39

Sales associates must deliver escrow funds to the broker the latest of what business day?

The NEXT business day

40

Brokers must deposit escrow funds no later than the _____ business day...

THIRD

41

Brokers must notify the FREC in writing of conflicting demands or of a good-faith doubt within ___ days.

FIFTEEN

42

What is a conflicting demand?

It is when the buyer and seller make demands regarding the dispersement of escrowed property that are inconsistant and cannot be resolved.

43

What are the four settlment options in cases of conflicting demand/escrow dispute?

Acronym: MALE
Mediation, Arbitration, Litigation, Escrow disbursement order (EDO)

44

What are the 3 exceptions related to the notice and settlement procedures for sales escrow accounts:

1) If a HUD sale, the broker would follow their guidelines
2) If a buyer of a condo unit timely delivers to a licensee written notice of their intent to cancel the contract as authorized by the Condominium Act, the licensee may return the funds
3) Buyer can't get financed.

45

Brokers must institute one of the four settlement procedures with _____ business days of receiving conflicting demands or of having a good-faith doubt.

30

46

If a broker requests an EDO and the escrow dispute is either settled or goes to court before the EDO is issued, the broker must notify the FREC within ____ business days.

10

47

Can Joint Ventures, Business Trusts, Cooperative Associations, and Unincorporated Associations register as a Real Estate Broker?

NO

48

Name the Business entities that CAN register as a brokerage entity

Sole Proprietorship, general partnership, limited partnership, limited liability partnership, corporation, and limited liability company