Flashcards in Virginia's Real Estate License Law (10) Deck (113)
________________, is the section of the statute that governs the practice of real estate professionals. The purpose of the law is to protect the public interest against fraud, misrepresentation, dishonesty, and incompetence in real estate transactions.
The law designates the __________________ as the authority with the power to enforce, amend, and promulgate rules and regulations for implementing the law.
Title 54.1, Chapter 21 of the Code of Virginia
Real Estate Board (REB)
- active licensure
- at least 40 hours per week.
*The REB may waive the 40-hour-per-week requirement at its discretion.
- licensee who represents a client other than as a standard agent
- duties governed by a written contract
Includes condominiums, leaseholds, time-sharing, and any other interest in real property....including cooperatives. As defined by Virginia Law.
A licensee who acts for or represents a client in an agency relationship.
The ___________ is 1 of _____ boards that regulate more than 30 occupations and professions including practitioners, including salespersons, associate and principal brokers, and sole proprietors.
Virginia Real Estate Board (VREB)
Through what 2 means does the Department of Professional and Occupational Regulation (DPOR) serve and protect the public?
2) enforcement of laws
Whom appoints the members, comprising of practitioners and citizens, of the DPOR?
The _________ is composed of _______members. ______ members may be either ________________ with at least ______ consecutive years' experience immediately prior to appointment, and ______ are ___________ members. Appointments are made by the governor for a term of ________. Sitting members may be reappointed for one additional ________ term. Members of the REB select the chairperson.
brokers or salespersons
In addition to administering the real estate license law, the REB has the responsibility of administering what ? (6)
1) Virginia Fair Housing Act
2) Virginia Condominium Act
3) Virginia Time-Share Act
4) Virginia Cooperative Act
5) Virginia Real Estate Transaction Recovery Fund
6) Virginia Property Owners Association Act
What are 4 aspects of real estate practice with which the REB does not become involved?
1) disputes between salespersons and brokers
2) disputes between brokers
3) establish commission rates
4) standardize sales contracts
T/F. A broker-owned sole proprietorship is not required to obtain a separate firm license unless operating under a fictitious name?
Regarding operating without a license, the REB may refer the matter to the Commonwealth _________ for action. Any penalty for such activities against the individual or firm will be determined by the _________. Operating without a license is considered to be a________________ with a penalty of up to ___________ per violation. A _________ or subsequent violation within a single _____________ period constitutes a ______________. The civil penalties against one person or business entity cannot exceed ______________ per year.
Regarding requirements for licensure, an applicant for a broker's license must meet additional educational requirements and must have been actively engaged as a real estate salesperson for how long?
"Actively engaged" here means how long?
- 36 of the previous 48 months.
- An average of 40 hours per week
Regarding VA real estate licensure, all initial applications for licensure must be made within ___________ of the _____________. Failure to apply within this time period will require retaking the exam.
Regarding real estate salesperson licensure, an applicant for licensure as a real estate salesperson must have successfully completed a "Principles of Real Estate" or similar course approved by the REB. The course must contain ________ semester credit hours or a minimum of ________ classroom, correspondence, or other distance learning instruction hours prior to making application for the examination.
Regarding real estate broker licensure, applicants for a real estate broker's license must meet the following requirements in addition to meeting the salesperson licensing requirements. An applicant must
have been actively engaged as a real estate salesperson for ____________ immediately preceding the date of application for licensure as a real estate broker, and
have successfully completed _______ classroom or correspondence semester credit hours (______ 45-hour courses, or ______ classroom hours) of study approved by the REB in such subjects as brokerage, real estate law, real estate investments, real estate finance, and real estate appraisal, or related approved subjects prior to the licensing examination. All applicants are required to complete the _______________.
36 of the 48 months
45-hour brokerage course
Will be issued to brokers who are active in more than one legal entity, that is, who work for more than one brokerage firm. ***Concurrent licensure does not refer to persons holding licenses in multiple states.
T/F. Regarding concurrent licenses, written statements verifying that written notice of the applicant's concurrent status must be provided to the principal broker of each firm with which the applicant is or will be associated?
What 3 things must be included in a branch office application form?
1) Name of the firm
2) location of the branch office
3) name of the branch office's supervising broker
What 2 things must be made available at each branch office?
1) branch office license
2) a roster of every salesperson and broker assigned to the branch
An ___________ means that the licensee is affiliated with or employed by a broker. The licensee's broker must certify his or her license application and agrees to be responsible for the licensee's brokerage activities. When the REB has approved the application, the license will be issued and sent to the _____________. The licensee is now considered to have active status: He or she is licensed to engage in real estate activities and receives a ___________ as evidence of his or her status as a broker or salesperson. The principal broker is responsible for maintaining the licenses of every salesperson and broker (affiliated with or employed by the brokerage entity) at the __________ of the firm.
T/F. Though a licensee has an inactive status, he or she may still be able to collect referral fees?
Regarding changes of a licensee changing from active to inactive status, if the broker has not yet returned the license of the individual involved in the change, the broker must do so by certified mail so that it is received by the REB within how long?
10 days of the date of notification
Regarding a licensees move from inactive to active status, if a licensee has been on inactive status for ________ or more, the licensee must meet educational requirements in effect at that time to be reinstated to active status.
If a licensee has been on inactive status for three years or more, the licensee must meet educational requirements in effect at that time to be reinstated to active status. How can this educational requirement be waived?
if licensee was engaged in a real estate-related field while inactive and can demonstrate to the REB that the knowledge of real estate has been retained.
If a licensee was on inactive status at the time the license was renewed, the licensee must submit evidence that he or she did successfully complete the required ______ of continuing education during the __________ preceding reactivation.
A licensee who refers prospective buyers or sellers to the broker with whom the agent is affiliated.
T/F. The REB considers a person acting in the capacity of a referral agent to be inactive.
False. Active status
T/F. A referral agent will be required to complete the mandatory continuing education requirements every licensing cycle?
A person who holds a real estate license issued by another state may apply to the REB for a ______________.
license by reciprocity
Disregarding other requirements, a licensee applying for a salesperson's license by reciprocity in VA, the licensee must have been actively engaged in real estate practice for ____ of the preceding ____ months, or have met educational requirements substantially equivalent to Virginia's;
Disregarding other requirements, a licensee applying for a broker's license by reciprocity in VA, the licensee must have been licensed as a real estate broker and actively engaged as a broker or salesperson for ____ of the ____ months immediately prior to application
Consent to Suits and Services?
Another requirement for nonresidents for a licensure by reciprocity that allows the Director of the DPOR to accept notice of suits on the licensees behalf. (you must consent to sue or be sued)
Regarding business entities under the supervision of a principal broker, what are 3 advertising requirements they must follow?
1) all advertising must be under the direct supervision of the principal or supervising broker and in the name of the firm
2) The firm's licensed name must be clearly and legibly displayed on all advertising
3) If advertised by the firm, must contain the firm's licensed name and address. If advertised by a licensee, must contain the licensee's name, the name of the firm where the licensee is affiliated, and the firm's address.
When do the real estate licenses of salespersons, brokers, and firms expire?
Every 2 years, on the last day of the month in which the license was issued.
T/F. Renewal requirements apply to both active and inactive licensees alike?
T/F. In VA, failure to receive a notice of renewal relieves the licensee of the responsibility to renew?
Regarding licensing renewal, what are the application and renewal fees for;
1) Salesperson by education & examination
2) Salesperson by Reciprocity
3) Salesperson or associate broker's license as a business entity
4) Broker by education & examination
5) Broker by reciprocity
6) Broker concurrent license
7) Firm license
8) Branch office license
9) Transfer Application
A = Application Fee
R = Renewal Fee
1) A = $170
R = $65
2) A = $170
R = n/a
3) A = $210
R = $90
4) A = $210
R = $80
5) A = $210
R = n/a
6) A = $140
R = $80
7) A = $270
R = $160
8) A = $190
R = $90
9) A = $60
R = n/a
Regarding licensing renewal in VA, If the licensee does not renew his or her license prior to expiration, the licensee must apply to have the license _____________.
The regulations allow for reinstatement of a license up to ________ following expiration. If the application to reinstate is received within ________ of expiration, there is no monetary penalty. However, from the 31st day up to one year, application for reinstatement is subject to the current _____________. The reinstatement fee is a flat fee and is not in addition to the normal renewal fees.
Regarding licensing and continuing education in VA, ______ of the 16 continuing education course hours must include the subjects of _________ and ___________. The remaining eight hours shall be on other approved subjects.
standards of conduct
Post-licensing Education (PL or PLE)
education required to obtain the first salesperson license renewal
Post-licensing education always takes place when?
Continuing Education must be completed when?
During the initial 2-year term of the license
During the 2nd and all subsequent 2-year licensing terms
(1) What are the post-licensing (PL) education hour requirements for salespersons and brokers?
(2) What are the continuing education hour requirements for salespersons and brokers?
(1) salespersons = 30 hours
broker = 24 hours
(2) salespersons = 16 hours
brokers = 24 hours
Continuing Education (CE or CED)
education required to obtain the second and all subsequent renewals of a real estate license.
Post-licensing education for salespersons are required to complete 30 hours of classroom, correspondence, or other distance learning, within the first 12 months of obtaining a license, in what 3 specified areas?
1) residential real estate
2) commercial real estate
3) property management
Describe the make-up of the curriculum for brokers 24 hour continuing education requirements which must be completed every licensing term?
24 hours total
- 3 hours, ethics & standards of conduct
- 2 hours, fair housing
- 3 hours, legal updates & emerging trends, real estate emergency, real estate contracts
- 8 hours, supervision & management of real estate agents and brokerage firms
- 8 hours, general elective courses
Regarding continuing education;
1) Licensees are responsible for retaining proof of completed continuing education for how long?
2) The REB requires that each school establish and maintain a record of continuing education for each student for how long?
1) 3 years
2) 5 years minimum
T/F. Any person who is inactive at the time of license renewal may renew his or her inactive license and is not required to complete the courses as a condition of renewal?
True. However, when that licensee chooses to activate the license, he or she must document that the required continuing education courses have been completed within the past 24 months.
Name 10 exemptions from real estate licensure?
1) Owners, lessors, and their employees dealing with their own property
2) Persons acting as attorneys-in-fact under a power of attorney
3) Attorneys at law in the performance of duties as an attorney at law
4) Persons acting under court order such as receivers, trustees in bankruptcy, administrators, and executors
5) Trustees under trust agreements
6) Corporations managing rental housing when officers, directors, and members in the ownership corporation and the management corporation are the same persons and the management corporation manages no property for others
7) Any existing tenant of a residential dwelling who refers a prospective tenant to the owner of the unit and receives, or is offered, a referral fee
9) Salaried residential property managers
10) Appraisers, mortgage bankers, and loan officers in the normal practice of their profession
T/F. Rental location agents are required under the REB to maintain a real estate license?
Who has the authority to set real estate license application and renewal fees?
Each new licensee, whether salesperson or broker, must pay _______ into the Transaction Recovery Fund.
Regarding PSI examination and licensing, All license applications must be received by the ________ within _________ of passing the exam.
T/F. Regardless of the number of agents affiliated with a firm or the number of offices a firm operates, there may be more than one principal broker for each firm?
False. Only 1 principal broker
A brokerage business may be known by any name that identifies the owner or owners, or it may use an assumed or fictitious name. If the firm chooses to operate under an assumed or fictitious name, the application for licensure of the firm must be accompanied by a _________________that has been filed with the _______________ in the jurisdiction in which ______________.
certificate of ownership
clerk of the court
the business operates
Regarding VA brokerages, every licensed __________ who is a resident of Virginia must maintain a _______________ within the commonwealth.
place of business
What is the condition in which a place of business can be located in a private residence?
- business area is separate and distinct from the living quarters
- accessible to the public
What are 2 important factors for having a supervising broker supervise a place of business or branch office?
1) the availability to review and discuss contracts and advertising
2) the availability of training, written procedures, and policies regarding the REB
In regards to signage, if a broker places a sign at his/her office, it must state what?
1) brokerage name
2) the words Real Estate, Realty, or the name of a generally recognized organization of real estate professionals.
In regards to a change of location, name, or ownership, In the event the broker's main office changes location or the name of the brokerage changes, it is the _____________ responsibility to advise the ____________ of the change within __________. The REB will issue new licenses for the remainder of the license period.
T/F. Regarding changes of location, name, or ownership, if the location of a branch office changes, only the branch office license needs to be returned?
T/F. Salespersons and individual brokers are responsible for keeping the REB informed of their current home addresses and of any changes in their names or addresses within 30 days of the change?
When a salesperson or broker is discharged or in any way terminates active status, the ________________ must sign and note the date of termination on the license and return it by certified mail to the board so that it will be received within _____________ of the date of termination or status change. If the principal broker is discharged or terminates active status, the firm must notify the board and return the license by certified mail within ______________ of termination.
10 calendar days
3 business days
T/F. Regarding broker escrow accounts, any broker who holds money belonging to others pending consummation or termination of a real estate transaction must maintain an escrow account solely for those funds?
True. Except when holding a buyer's earnest money deposit in the case of a sales transaction, brokers do NOT hold this. In this situation, the money may be held by a settlement agent, an attorney, or even a seller.
Regarding broker escrow accounts, if a fund is to be deposited in an escrow account, it must be deposited by the ______________ following ratification of the sales contract or receipt of the lease, unless otherwise agreed in writing.
5th business banking day
Business Banking Day?
Monday - Friday with the exception of legal holidays as defined by the Federal Reserve Bank.
In regards to establishing and maintaining an escrow account in VA, each account—and all checks, deposit slips, and bank statements relating to it—must be labeled what as part of the account name?
Regarding escrow account disbursal, in the event that the transaction is not consummated, the broker or supervising broker shall hold funds in escrow until what? (4)
1) consummation of transaction (i.e., settlement)
2) all principals to the transaction agree, in writing, to the disposition
3) a court orders disbursement
4) the broker can determine, in accordance with the specific terms of the contract, exactly who is the rightful recipient of the funds
Regarding broker escrow account disbursal, If the broker decides to distribute the funds according to the terms of the contract, what must first happen?
Broker must first give written notice to the principal to the transaction who is not to receive the funds. This notice may either be hand-delivered or by certified mail with a statement that reads, payment will be made unless a written protest is received within 30 days of delivery of the notice."
Regarding broker escrow disbursal options, any money in the escrow account that will ultimately belong to the ____________ may be left in the account and not be considered ______________, provided that these funds are clearly ___________ in the account records and that these funds are removed from the account at _______________ of not more than ______________. Withdrawals from the escrow account for payment of commissions shall be paid to the firm by a check drawn on the escrow account.
T/F. Regarding broker escrow account disbursal options, if necessary, the broker may use a nominal amount of personal funds to establish or maintain the escrow account and not be guilty of commingling?
True. Provided that any funds so used are clearly identified in the account records.
T/F. There is a legal requirement in VA that escrow funds must be held in an interest-bearing account?
False. No legal requirement, but if the escrow account does earn interest, the broker must disclose, in writing, to all parties involved exactly how any earned interest will be disbursed.
T/F. In VA regarding brokers acting as property managers, brokers who manage several different properties should establish separate accounts for each property, even if the properties are owned by the same person?
T/F. Regarding brokers as property managers, unless there is sufficient money on deposit in the account, a broker cannot use funds from one property for another or disburse monies from an escrow or property management escrow account?
Regarding broker record keeping of escrow funds, escrow account records must be maintained for ________ from date of ____________ or ____________ of the transaction.
Regarding actions that constitute improper record keeping and maintenance of escrow funds by the principal or supervising broker include,
- failure to deposit escrow funds in accounts designated to receive escrow funds within ______________ of ratification of the sales contract.
- failure of the principal broker to report to the Real Estate Board within _____________ of any circumstance where it is believed that the improper conduct of a licensee has caused an insufficient balance in an escrow account;
- failing to retain a complete and legible copy of each disclosure of a brokerage relationship, executed contract, listing or buyer agency agreement, closing statement, and other material documents related to a real estate transaction in the broker's control or possession for a period of ____________ from the date of the closing or ratification (if the transaction fails to close);
- 5 business banking days
- 3 business days
- 3 years
Name 4 requirements for advertising by brokers in VA according to REB regulations?
1) All advertising must be under the direct supervision of the principal or supervising broker
2) All advertising must be in the name of the firm
3) The firm's licensed name and address must be clearly and legibly displayed on all advertising
4) *(If advertised by a licensee) Must contain the licensee's name
T/F. Regarding advertising, it is prohibited that failing to include a notice that the property owner is a real estate licensee if the licensee has any ownership interest in the property and is not using the services of a licensed real estate entity?
Regarding online advertising, what 4 disclosures must be displayed?
1) Name of the firm
2) City and State of Firm's main office
3) Jurisdiction in which the firm holds a license
4) Name of the licensee (if advertised by a licensee)
Regarding a death or disability within a brokerage, if a sole proprietor or the only broker in a firm dies or becomes disabled, the ___________ may authorize an ______________ to conclude the broker's business. The individual appointed may be an adult member of the broker's family, an employee of the broker, or some other suitable person. The person appointed may act only to conclude the business of the broker and may act in this capacity for a period of not longer than ___________.
Regarding death within a brokerage, what two things happen if the deceased was a sole proprietor or the only broker in the firm?
1) All listings are terminated
2) The licenses of any licensees active with the broker must be returned to the REB
Regarding the Virginia Real Estate Transaction Recovery Fund, The establishment and maintenance of the fund is the duty of the ___________ of the __________.
The cost of administering the Transaction Recovery Fund is funded by what?
interest earned on deposits to the fund
T/F. Regarding the Virginia Real Estate Transaction Recovery Fund, the REB may, at its discretion, use part of the interest earned by the fund for research and education for the benefit of licensees?
Regarding the Transaction Recovery Fund, each new licensee, whether salesperson or broker, must pay ______ into the fund. Monies collected must be deposited into the fund within ________ after receipt by the director.
The fund's minimum balance is __________.
Regarding the maintenance of the Transaction Recovery Fund, the fund's minimum balance is $400,000. If the balance of the fund falls below $400,000, the REB may assess each active and inactive licensee a proportionate amount to bring the balance to the statutory minimum. No licensee may be assessed more than _____ during any _____________ ending on ____________ of _______________ years. Licensees who fail to pay the assessment within _________ of receiving the first notice are given a second notice. Failure to pay the assessment within ________ of the second notice results in automatic suspension of the licensee's license. The license will be suspended until such time as the director receives the amount due. The REB has the power to assess all licensees at one time or on individual licensees' renewals.
Regarding the maintenance of the Transaction Recovery Fund, at the close of each fiscal year, if the balance of the fund is more than ___________, the excess amount over $2 million is transferred to the ________________.
Virginia Housing Partnership Fund
Regarding claims procedure of the transaction recovery fund, a person who files a claim for payment from the fund must first obtain a ___________ against the licensee from a ______________ of competent authority. After a licensee has been found guilty of misconduct, the injured party must take appropriate legal action against the licensee.
Appropriate legal action includes what 4 things?
1) forcing the sale of the licensee's assets to satisfy all or part of the claim;
2) investigating any listings held by the licensee and determining any commissions that may be due;
3) filing a claim in bankruptcy court, if the licensee has filed bankruptcy; and
4) requiring the licensee to submit to interrogatories, if necessary.
Regarding claims procedures from the Transaction Recovery Fund, if appropriate legal action was taken by the injured party, and any portion of the claim remains unsatisfied, the individual may file a claim with the ___________ requesting payment from the fund for the unsatisfied portion of the claim within _________ from the date of the ___________.
In regards to Transaction Recovery fund limitations, no fund payment will be made to any of the following? (4)
1) Any licensee or a licensee's personal representative
2) The spouse or child of any licensee against whom the judgment was awarded, or their personal representative
3) Any financial or lending institution
4) Any person whose business involves the construction or development of real property
T/F. Regarding the limitations of the Transaction Recovery fund, the amount of the claim is NOT limited to actual monetary damages suffered in the transaction, court costs, and attorney's fees?
False. Also Punitive damages CANNOT be recovered from fund, even if judgement rendered them.
In regards to funds available from the transaction recovery fund, what 3 things would happen if at any time the amount of claims to be paid from the fund would deplete the fund to an amount below the statutory minimum of $400,000?
1) The processing of all claims will be suspended
2) The REB will assess licensees for the remaining balance
3) As funds become available, the claims will be paid in the order in which they were originally received.
In regards to the monetary limitations on claims to the Transaction Recovery Fund, -Single Transaction-
In a single transaction, the maximum payment from the fund to all injured parties is _________. The maximum amount any single claimant may recover from the fund based on a single transaction is ________, regardless of the number of claimants.
If the same licensee is involved in multiple fraudulent transactions during any two-year period ending June 30 of even-numbered years, the maximum payment to all claimants combined is ___________.
What penalties against a licensee follow a payment from the fund on his/her behalf?
1) License immediately revoked
2) May be subject to other disciplinary actions by the REB
3) Licensee may NOT apply for a new license until the fund has been repaid in full and even then it is not guaranteed.
T/F. Regarding disclosures of interest of a licensee, If a licensee has any family, business, or financial relationship with any of the principals to the contract, all parties to the contract must be informed of the relationship in writing in the offer to purchase or lease?
Regarding disclosure of brokerage relationships, how must a brokerage disclosure be shown if displayed along with other required disclosures?
Disclosure must be conspicuous, printed in bold lettering, all capitals, underlined, or within a separate box.
In regards to licensee records and the REB, a licensee must produce any document, book, or record concerning a real estate transaction in which the licensee was involved, or was required to maintain records, within ________ from the request by the REB. Any other inquiries made by the board must be responded to within _________.
In VA actions that constitute unworthy and incompetent conduct include the following:
- Having been finally convicted or found guilty of a __________ involving moral turpitude, sexual offense, drug distribution, physical injury, or any felony. Any plea of nolo contendere is considered a conviction.
- Failing to inform the board in writing within _____ days of pleading guilty or nolo contendere or being convicted or found guilty of any convictions as previously stated.
T/F. Regarding brokerage commissions, brokers may pay commissions or fees to any licensees affiliated with their firm. Brokers also may pay commissions or fees to other brokers (or firms), regardless of where those brokers are located?
Regarding brokerage commissions, licensees are prohibited from receiving _________ from a third party who provides services or goods necessary to fulfill a contract, such as an appraiser, a home inspector, or a surveyor, when one of the principals to the contract is paying for the services unless ____________ is made to the principal. The principals must be informed, in writing, of any "finder's fees" or commissions paid to the licensee.
full written disclosure
T/F. Regarding improper brokerage commissions, A licensee may not personally pay for services required by the terms of a real estate contract without written disclosure of the payment to the principals?
T/F. Entering into a brokerage relationship that does not have a specific, definite termination date does NOT constitute improper dealing?
Name 3 specific actions that regulations prohibit as misrepresentations or omissions regarding standards of conduct by licensees?
1) using "bait and switch" tactics in advertising by offering real property for sale or rent with the intent not to sell or rent at the price or terms advertised
2) failing to disclose material information related to the property that is reasonably available to the licensee
3) failing to promptly present every written offer, rejection, or counteroffer to the buyer and seller
Regarding principal and supervising broker's responsibility for licensees, under what terms can a principal or supervising broker be liable for the unlawful acts of a real estate salesperson, employee, partner, or affiliate of a principal or supervising broker?
If the REB finds that the principal or supervising broker knew or should have known of the unlawful act or violation, they may be held liable.
The _____________ of the Department of Professional and Occupational Regulation (DPOR), reviews complaints to determine whether the Department is authorized to process the complaint. The Department will only process complaints against individuals or businesses that are subject to the laws or regulations of regulatory boards within the Department.
Compliance & Investigations Division
Complaint Analysis and Resolutions Section?
This section of DPOR is responsible for the receipt, processing, and analysis of all complaints coming into the Department regarding real estate regulants.
Regarding complaint procedures, The ________ is a hearing conducted at the offices of _______; it is presided over by an __________ member and supported by DPOR staff. After considering the testimony and evidence, the presiding board member will offer a __________ or prepare a ____________.
Summary and Recommendation
The regulant accepts responsibility without contest (no appeal possible) and submits to the judgment recommended by the presiding board member. The Consent Order is presented at the full board meeting for approval. The board may 1) Accept 2) Reject 3) Counteroffer 4) Transfer to IFF
Regarding complaint procedure and REB board meetings, it is important to note that all disciplinary decisions come before the full REB for review and approval. REB scheduled meetings (there are approximately _______ per year) are open to the public. IFF participants are afforded an opportunity to address the full board at these meetings and may speak for _______ minutes, but no new __________ may be presented. The board carefully considers the IFF Summary and Recommendation, which outlines thoughts, analysis, and credibility issues and makes its final decision.
Regarding complaints, during a board meeting, if the REB finds the licensee guilty, it may impose a monetary penalty of up to _________ for each violation. The REB's decision is final, although the licensee may appeal the decision through the _________.
Court of Appeals