AZ Real Estate - Real Estate Brokerage: Law Of Agency & Pub Protection B2 Flashcards
How is fund supported?
New Salespersons pay $10, new brokers pay $20.
If balance goes below $600k on Jun 30, deficit made up by collecting fees when licensees renew.
RE Dept Recovery Fund created to?
Indemnify persons suffering loss as a result of misrepresentation or fraud of real estate agents.
Who is eligible to make claims on recovery fund?
Those who have obtained civil judgements against brokers or salespersons but have not been able to collect in whole or in part.
Procedure to file claim is:
- File an intent to claim
- File lawsuit against licensees
- Win judgement
- Exhaust all legal avenues of collection
- Get a court order directing AZRE to pay
Max amt claimant can get from Recovery Fund is?
$30k per transaction
One contract is one transaction.
If multiple transactions led to claim, no more than $90k will be paid on behalf of one RE licensee.
When RE Recovery Fund payment made on behalf of licensee, what is status of agent’s license?
It is terminated.
Cannot get license back until pay back Recovery Fund in full plus interest.
Corps and RE licensees cannot make claim on fund.
Who is principal or client?
Person who hires agent. Usually seller.
Who is customer aka 3rd party?
Person you work with and not for. Usually buyer. Unrepresented principal ie you represent seller buyer is w/o agent.
What are 3rd parties entitled to?
Truthful info
If license terminated when can you reapply for license?
After 5 yrs assuming you paid fund back plus interest
Salesperson is what type of agent?
A sub agent
Special agent means
One purchase or sale
Agent authorized to perform a variety of transactions is the
General Agent
An agent in the employ of another agent or cooperating broker all representing Seller are
Subagents
When broker represents both buyer and seller in same transaction she is a
Dual agent
An agent who does everything on behalf of a client is a?
Universal agent aka power of attorney
How does seller become client?
Listing agreement
When all outward appearances imply agency because of conduct and acts it is what kind of agency?
Ostensible
Agency of necessity can be created by emergency for example…
Agent discovers gushing water in a property.
Fiduciary relationship of agent to principal are…
Loyalty Confidentiality Accountability Obedience Disclosure
Principals duty to customers
Fair, honest and truthful
Sellers Property Disclosure does what?
Helps seller to disclose. Not required by law.
Listing agreement is a
Authorization to Sell
An Agreement to Sell is a
Purchase Comtract
Listing agreements and purchase contracts are
Non- assignable
Open Listing is
- A unilateral agreement
- Multiple agents working for seller
- Offers least protection to broker
- Used in commercial
- Procuring cause broker gets few
- Owner makes sale he pays no fee
- Not permitted in MLS because broker w/ open listing does not offer cooperation w/ other brokers
Exclusive Agency Listing
Only one broker authorized to sell. If broker or cooperating broker sells commission is paid. Of owner sells no commission paid. Broker ends up getting buyer for seller w/ signs and ads. Commercial
Exclusive right to sell
Only one broker auth to sell property.
Owner pays fee regardless of who gets buyer.
Net listing
Seller gets net amt excess proceeds go to broker.
Proof needed to collect in court…
A RE license
Compensation agreement
Procuring cause
Commissions earned when?
- At moment contract signed (meeting of minds)
2. Paid at close of escrow unless diff time agreed to
90 day clause protects who?
Broker.
If Buyer/Seller agree to sale w/i 90 days of expiration of listing broker protected.
Bilateral agency can be terminated by
Acts of parties
Mutual Agreement
Completion of purpose (sale)
Agency can be terminated unilaterally by…
Revocation - seller fires agent w/ cause
Renunciation - agent fires seller
Agency can also be ended by..,
Operation of law - condemnation, eminent domain, zoning changes, bankruptcy or supervening illegality (something legal becomes illegal).
How does death impact listing agreement?
Death, insanity or incompetence or seller or a self employed broker terminates listing agreement.
AZ Revised Statute says listings must be
- In writing
- Say terms and include compensation
- Have beg and end date
- Signed by seller, broker or salesperson
How many docs are needed for broker to be assured of collecting his commission if seller does not want to pay?
2
Valid listing on community must be given by
Husband OR wife
In buyer/broker exclusive employment agreement what does not have to be in agreement?
Legal description of property
A licensed salesperson is what kind of agent to her broker?
General agent
Property manager is also a general agent.
Person auth to perform variety of transactions for for principal, mostly on continuing basis.
In listing a property for sale what is not needed for valid exclusive listing?
A legal description.
A cooperating broker in a real estate transaction is most likely the…
Buyer’s Broker
Agent owes customer…
Honesty
Recovery fund claimant do not need to be….
Residents of AZ
Broker earns cousin when..,.
Broker secures a willing and able buyer making an offer meeting seller’s terms.
In agency relationship confidentiality is a part of what duty?
Loyalty
What may NOT be in a valid listing contract?
Automatic renewal clause
After licensee repays recovery fund right to reapply for license may be denied for a max of ___years.
5
A salesperson who represents seller in all RE transactions is what type of agent?
General Agent
Broker’s duty to a third party is
Full disclosure of material facts
Seller gives sales person right to sell and make other decisions regarding property - this is called
General agent
When does a salesperson have a listing?
When listing is signed
Broker lists property for sale but does not advertise it, show it or communicate to seller. Seller has right to assume broker…
Has breached fiduciary and abandoned listing
What is not required in a listing contract to be valid?
Commission rate
A salesperson’s right to commission is based on having a
Valid license
Who does a salesperson represent?
Employing broker
Broker relationship to seller is most likely..
Special
When salesperson works for brokerage co salesperson is
Agent of Corporation and corporation is agent of seller
When person hires another in a relationship if trust and confidence this is
Fiduciary
When listing broker dies his son wants to take over all listings. Son must…
Re-writ and negotiate all listings
Exclusive right to sell is what type of contract?
Executory bilateral
Broker has listing but owner forgot to sign. Listing is…
Unenforceable
Broker principal relationship is
Fiduciary
What is not required to be in listing k?
Construction cost
In agency relationship confidentiality is a part of what duty?
Loyalty
To ensure broker gets paid commission on open listing broker must
Have a signed listing contract
