Unit 4: Authorized Relationships, Duties, and Disclosure

Question 1

Judge-made law manifested in decrees and judgments of the courts (case law)

Answer 1

common law - unwritten law

Question 2

Law created by the enactment of legislation

Answer 2

Statutory Law

Question 3

The body of law created by administrative agencies in the form of rules, regulations, orders, and decisions.

Answer 3

administrative law

Question 4

A person who delegates authority to another is called

Answer 4

the principal

Question 5

person who accepts the authority (and the responsibilities, duties, and obligations associated with that authority) is called

a representative.

Answer 5

the agent

Question 6

authorized by the principal to perform acts associated with the continued operations of a particular job or a certain business of the principal.

Answer 6

general agent

Question 7

One authorized by a principal to perform a particular act or transaction, without contemplation of continuity of service as with a general agent.

Answer 7

special agent

Question 8

brokerage relationship options in a residential transaction:
1.
2.
3.

The appropriate relationship type is determined by the:

Answer 8

1. Nonrepresentation (no brokerage relationship)
2. Single agency
3. Transaction broker

broker

Question 9

Three Duties Required in All Brokerage Relationships

Answer 9

A Account for all funds

D Deal honestly and fairly

D Disclose all known facts that affect value of residential property

Question 10

A person in a position of trust and confidence with respect to another person.

Answer 10

fiduciary

Question 11

Caveat Emptor

Answer 11

Latin for “let the buyer beware.”

Question 12

Conducting negotiations on one’s own behalf without being subject to the other party’s control or influence.

A transaction where the parties are independent and on equal footing. The parties are strangers to each other and both trying to get the best deal. (most transactions are like this)

Answer 12

At arms length

Question 13

Two real estate licensees designated to represent the buyer and the seller as single agents in a nonresidential transaction. The buyer and the seller must have assets of $1 million or more and sign disclosures stating that their assets meet the required threshold.

In a residential transaction this is:

Answer 13

designated sales associate

an illegal dual agency.

Question 14

Representing both principals in a transaction (illegal agency relationship in Florida). A conflict of interest.

Answer 14

dual agency

Question 15

Transaction brokers provide a limited form of nonfiduciary representation to a buyer, a seller, or both in a real estate transaction.

Answer 15

limited representation

Question 16

The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.

Answer 16

residential sale

Question 17

Per Section 475.01, F.S., a broker who represents, as a fiduciary, either the buyer or the seller but not both in the same transaction.

Answer 17

single agent

Question 18

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

Answer 18

transaction broker

Question 19

The _____ delegates authority to another. The _____ accepts the authority and responsibilities.

Answer 19

principal

agent

Question 20

The seller is the ____ or ____.

Answer 20

the client or the principal

Question 21

A transaction that is NOT at arms length is bad because:

Answer 21

• it ruins the assessed value
• will be reappraised to get the fair market value
• in a short sale, the bank wants full sale price for lender, or else they’ll get a smaller return on their investment

Question 22

A sale of secured real property that produces less money than is owed the lender. The lender releases its mortgage so that the property can be sold free and clear to the new purchaser.

Answer 22

a short sale

Question 23

If authorized by the principal, the property manager is a ____________ because they show and rent apts, collect rents, supervise maintenance, handle tenant relations and bookkeeping. Therefore they are authorized to perform on a CONTINUED basis a broad range of services.

Answer 23

general agent

Question 24

Sales associates and broker associates are ______ of their broker. They solicit listings and buyers, negotiate contracts, attend closings, and perform other real estate services on behalf of their broker. This is on a CONTINUED basis.

Answer 24

general agents

Question 25

When there's a single transaction, such as selling a home, you are a _____.

Answer 25

special agent of the seller

Question 26

The Brokerage Relationship Disclosure Act is intended to ____________________________________ that can be granted to a broker and the duties brokers have in each type of brokerage relationship.

Answer 26

inform and educate the public regarding the types of authority or brokerage relationships

Question 27

Transaction brokers have

Answer 27

limitations

Question 28

You have to work for your client's best interest. This is a ______ relationship, as a fiduciary. 4 attributes you should show your client:

Answer 28

single agent relationship confidentiality loyalty disclosure obedience

Question 29

for sale by owner is an example of a ________ relationship. 3 ADD:

Answer 29

nonrepresentation account for all funds deal honestly and fairly disclose all facts that effect value

Question 30

The broker doesn’t represent the customer (the 3rd-party buyer or seller).

Answer 30

no brokerage relationship

Question 31

Two authorized relationships that do not owe fiduciary duties: 1. 2. They work with:

Answer 31

transaction broker nonrepresentation the customer

Question 32

single agent has a ___________ with their ______.

Answer 32

fiduciary relationship with their principal/client

Question 33

A single agent is a broker who represents, as a fiduciary, the buyer or the seller but not _____________

Answer 33

both in the same transaction.

Question 34

Confidential information learned during the course of the single agency _____ be divulged ____ or ____ the transaction has concluded and the agent-principal relationship has ended.

Answer 34

cannot before or after

Question 35

In a single agent relationship with the seller, the seller is the _____ and the broker is the ____ of the _____.

Answer 35

principal agent, principal

Question 36

Key Points of a Transaction Broker Relationship Transaction broker relationship is presumed in: ___________ to a buyer, a seller, or both the buyer and the seller (in the same transaction within the same brokerage) No __________ with the buyer or the seller Parties are represented as ________.

Answer 36

all residential and nonresidential transactions Limited representation fiduciary relationship customers

Question 37

In Florida, it is presumed that licensees are:

Answer 37

operating as transaction brokers

Question 38

A transaction broker provides ________ representation to a buyer, a seller, or both.

Answer 38

limited

Question 39

Transaction brokers do not represent either buyer or seller in ________.

Answer 39

a fiduciary capacity.

Question 40

Transaction brokers exercise _____ confidentiality.

Answer 40

limited

Question 41

Brokers must ____________ entrusted to them with regard to a real estate transaction. Such holdings are considered _______ or ______ and must be kept separate from the broker's funds.

Answer 41

account for all funds trust funds or escrow funds

Question 42

The transaction broker relationship requires that the licensee exercise _____________, including not divulging the sellers' motivation for selling their property.

Answer 42

limited confidentiality

Question 43

A written agreement to gain the principal’s permission to a change in brokerage relationship.

Answer 43

Consent To Transition

Question 44

The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.

Answer 44

residential sales

Question 45

Types of Transactions That Do Not Require Brokerage Relationship Disclosures ________ transactions ______or _____agreements (except when there is an option to purchase residential property) ______opportunities (except for property with four or fewer residential units) _______ _______

Answer 45

``` nonresidential rent or lease business auctions appraisals ```

Question 46

The Brokerage Relationship Disclosure Act mandates that the duties and obligations that have been detailed in this unit apply to _____ real estate transactions (______and _______). However, written disclosures are required only for residential sale transactions when the brokerage firm acts in the capacity of ______ or in ________.

Answer 46

all residential and nonresidential a single agent or in a no brokerage relationship.

Question 47

Written disclosures are not required when the brokerage firm acts in the capacity of ________ because this relationship is _____under Florida law.

Answer 47

transaction broker presumed

Question 48

The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.

Answer 48

residential sale

Question 49

The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.

Answer 49

residential sale

Question 50

The duties of the _____________ and _________ must be fully described and disclosed in writing to a buyer or a seller.

Answer 50

single agent relationship nonrepresentation

Question 51

The duty disclosures can be in ____________ or included as part of another document, such as a _________ or ____________.

Answer 51

separate and distinct disclosure document a listing agreement or buyer broker agreement.

Question 52

If the disclosure document is incorporated into a listing or buyer broker agreement, a signature line must be inserted ___________. It is not sufficient to only have a signature line at the bottom of the listing or buyer broker agreement.

Answer 52

immediately following the disclosure information.

Question 53

When incorporated into other documents, the required disclosure notice must be of the________ than other provisions of the document and must stand out. The first sentence must be _________. The list of duties must be presented on the disclosure in _______________________. The disclosure notice may include information concerning the real estate brokerage, such as the company name and logo, address, phone number, email address, et cetera.

Answer 53

same size or larger printed in uppercase and bold type. the same order as listed in the statute

Question 54

The no brokerage relationship notice must be disclosed in writing before the showing of property. A ____ relationship.

Answer 54

nonrepresentation

Question 55

The ______ disclosure must be made before, or at the time of, entering into a listing agreement or an agreement for representation, or before the showing of property, whichever occurs first.

Answer 55

single agent

Question 56

Recall that under Florida law, it is presumed that all licensees are operating as ___________ unless another brokerage relationship is established. There is no requirement to give a written _________ disclosure to the buyer and/or the seller. However, ________ must fulfill the duties of a __________ when that form of representation is selected.

Answer 56

Transaction Broker licensees transaction broker

Question 57

Brokers must retain brokerage relationship disclosure documents for _____ years for all residential transactions that result in a written contract to purchase and sell real property. Documents may be stored in a digital format. Files of properties that have failed to close must also be retained.

Answer 57

5

Question 58

Written disclosures are needed for residential transactions with _________ or _______.

Answer 58

single agent nonrepresentation

Question 59

An auction of real property is:

Answer 59

NOT a residential transaction

Question 60

Brokers must retain brokerage relationship disclosure documents and buyer broker agreements for __________ for all residential transactions that result in ________ to purchase and sell real property and all nonresidential transactions that use designated sales associates.

Answer 60

5 years a written contract

Question 61

Residential sales are defined as the sale of improved residential property of _____ or fewer units, the sale of _______ residential property intended for use as ______ or fewer units, or the sale of agricultural property of ______ or fewer acres.

Answer 61

4 unimproved 4 10

Question 62

There is no requirement to give _________ when working in a transaction brokerage capacity. However, licensees must fulfill the duties of a transaction broker when that form of representation is selected.

Answer 62

a written disclosure

Question 63

Designated sales associates may ______ for certain ________ transactions.

Answer 63

only be used nonresidential

Question 64

A brokerage relationship between a principal (or a customer) and a broker may be terminated because of bankruptcy of the customer. In other words,

Answer 64

Bankruptcy of a prospective buyer may terminate a buyer broker relationship.

Question 65

The no brokerage relationship disclosure must be made ______ the showing of property.

Answer 65

before

Question 66

The single agency disclosure must be made ____ or _____ entering into a listing agreement or an agreement for representation, or before the _____ whichever occurs first.

Answer 66

before, or at the time of, showing of property,

Question 67

single agent relationship duties include to use: and present + COLD C O L D

Answer 67

skill, care, diligence all offers and counter offers confidentiality (cannot leak info to opposite party) obedience loyalty disclosure (keep principal fully informed at all times)

Question 68

Brokerage relationship disclosure requirements apply to

Answer 68

residential transactions. sale of residential property of four or fewer units