2 -Owning, Managing and Supervising a Real Estate Office

Question 1

When holding funds what two things must a broker avoid?

Answer 1

Commingling and Conversion.

Question 2

How soon must funds given to sales associates (by buyers or tenants) be given to the broker?

Answer 2

No later than the end of the next business day.

Question 3

How soon must funds given to the broker by sales associates be deposited?

Answer 3

Within three business days

Question 4

How much of a broker’s own funds can be maintained in a trust account?

Answer 4

No more than $1000. $5000 for a property management account.

Question 5

The broker must deposit what percentage of any advanced fee received in a separate trust account?

Answer 5

The broker must deposit 75% of any advanced fee received in a separate trust account.

Question 6

What four things must a broker ensure happens for trust accounts used to hold advanced fees?

Answer 6

1. The broker must deposit 75% of any advanced fee received in a separate trust account
2. Must account for all the money spent on the part of the tenant or landlord.
3. Quarterly accounting is required
   4, Written advance notice to disburse funds is required.

Question 7

What penalties can a broker suffer If a broker does not maintain the proper balance or records of the trust account?

Answer 7

1. Fine of $1,000
2. Imprisonment for a year
3. Treble damages
4. A combination of all three.

Question 8

The broker must keep careful, accurate records of all transactions and must reconcile the accounts how often?.

Answer 8

The broker must keep careful, accurate records of all transactions and must reconcile the accounts once a month.

Question 9

How long must transaction records must be held for?

Answer 9

Transaction records must be held for five years or for two years after the conclusion of civil or appellate proceedings, whichever is later.

Question 10

When the escrow account is in dispute and a broker has been asked to disburse funds from the escrow account, what are his two options?

Answer 10

The broker may distribute the funds in good faith doubt, or he may submit the problem to the FREC within 30 days of the final disbursement demand.

Question 11

The four methods of solving escrow amount disputes are:

Answer 11

Mediation
Escrow Disbursement Order
Arbitration
Litigation

Question 12

What are the requirements for brokers selling rental lists for the purpose of acting as a tenant’s information source?

Answer 12

1. Must be carefully maintained and up-to-date

2. Must include a one-page contract with a refund policy statement.

Question 13

Condominiums include a Right Of Refusal contingency period of what length of time?

Answer 13

15 days for a new condo or 3 days for a pre-owned condo.