Section 3: Authorized Relationships and Ethics

Question 1

Administrative law

Answer 1

A body of law created by administrative agencies in the form of rules, orders, and decisions

Question 2

Agent

Answer 2

A person entrusted with another’s business; the person authorized by the principal to act on the principal’s behalf

Question 3

At arm’s length

Answer 3

When people conduct negotiations on their own behalf without trusting the other’s fairness or integrity and without being subject to the other’s control or influence

Question 4

Common law

Answer 4

Judge-made law manifested in decrees and judgments of the courts as opposed to statuary law

Question 5

Customer

Answer 5

a member of the public who is or may be a buyer or a seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship

Question 6

Designated sales associates

Answer 6

Two real estate licensees from the same brokerage company designated to represent the buyer and the seller as single agents in NONRESIDENTIAL transactions

Question 7

Dual agent

Answer 7

refers to a broker who represents as a fiduciary for BOTH the buyer and the seller in a residential real estate transaction.

• This is ILLEGAL in Florida

Question 8

Fiduciary

Answer 8

Occurs when a broker is in a relationship of trust and confidence with the broker as agent and the seller or the buyer as principal.

Question 9

Fraud

Answer 9

The intent to misrepresent a material fact or to deceive to gain an unfair advantage or to harm another person

Question 10

General agent

Answer 10

A person authorized by the principal to handle the affairs related to a business or trade, or to handle all the business at a certain location; for example, a property manager

Question 11

Misrepresentation

Answer 11

The misstatement of fact or the omission or concealment of a factual matter

Question 12

No brokerage relationship

Answer 12

An arrangement where the broker does not represent either the buyer or the seller, but instead the broker works to facilitate the transaction

Question 13

Principal

Answer 13

the seller OR the buyer, but NOT both, in a single agent relationship.

The principal authorizes the agent to act on the principal’s behalf, while the principal is responsible for the actions of the agent

Question 14

Puffing

Answer 14

Term used to describe a licensee’s boasting of a property’s benefits including comments that are not made as representations of fact and, thus, are not grounds for misrepresentation

Question 15

Residential sales

Answer 15

Defined in Florida license law to mean the sale of:

• Improved residential property of four or fewer units
• Unimproved residential property intended for use as four or fewer units
• The sale of agricultural property of ten or fewer acres

Question 16

Single agent

Answer 16

A broker who represents either the buyer or the seller (but NOT both) and has a fiduciary relationship with the party represented

Question 17

Special Agent

Answer 17

Authorized by the buyer or the seller to handle only a specific business transaction or to perform a specific act; a broker who has a single agent relationship is a special agent with limited power or authority

Question 18

Statuary laws

Answer 18

Written statutes and rules enacted by the legislature

Question 19

Transaction broker

Answer 19

A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does NOT represent either party in a fiduciary capacity or as a single agent

Question 20

Universal agent

Answer 20

Authorized by the principal to perform all acts that the principal may personally perform and that may be lawfully delegated

Question 21

What are the 3 brokerage options in Florida?

Answer 21

• Transaction broker
• Single agent
• No brokerage relationship

Question 22

What are subagents

Answer 22

Agents who are authorized to assist and represent the agent

• A subagent has the same duties as an agent
• A broker’s sales associates are general agents of the broker and subagents of the broker’s principals
• Sales associates and broker associates owe the same fiduciary obligations to the principal as does their broker

Question 23

How does a transition to another relation ship take place?

Answer 23

• Accomplished with a Consent to Transition to transaction Broker Notice
• Buyer’s or seller’s signature or initials are required before the licensee may change from one brokerage relationship to another
• If the principal refuses to sign or initial the consent to transition notice, the broker must continue to act as a single agent

Question 24

How long must brokerage disclosure documents and buyer broker agreements be kept?

Answer 24

5 years

Question 25

When do disclosure requirements NOT apply?

Answer 25

- Auctions - Business enterprises - Appraisals - Rentals - Nonresidentials

Question 26

What are requirements for the use of designated sales associates?

Answer 26

- Must be in nonresidential sales ONLY - Buyer and seller must EACH have assets of at least $1 Million dollars - Broker assigns one sales associate to work with the buyer and another to work with the seller as a single agent - Buyer and seller must request the arrangement and sign disclosure notice

Question 27

What are the duties in a "no brokerage relationship"

Answer 27

- Deal honestly and fairly - Disclose all known facts that materially affect the value of the residential real property - Account for all funds entrusted to a licensee

Question 28

What charge can be filed for selling property by way of lottery?

Answer 28

Fraudulent or dishonest dealing by trick, scheme, or device

Question 29

What notice must be provided for single agency

Answer 29

The single agency notice. It must be provided at or before the time of entering into a listing agreement.