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Real Estate > Brokerage > Flashcards

Brokerage Flashcards

1
Q

NJ RE Act (Law)
&
NJ Rules and Regs

Brokeareg Book - Unit 1

A

NJ RE Act (Law)
Title 45, Chapter 15

NJ Rules and Regs
Title 11, Chapter 5

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2
Q

Classes of Licenses

Brokeareg Book - Unit 1

A

Broker
Salesperson
Broker-salesperson
Sales Person Licensed With a Real Estate Referral Company (SPLWRERC)

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3
Q

License Renewal Expirations

Brokeareg Book - Unit 1

A

June 30th of Biennial Odd Numbered Years

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4
Q

License not required for

Brokeareg Book - Unit 1

A

FSBO
Attorneys, Executors, Trustees, Receivers, Admins, Legal Guardians, and Others under the order of a court
Banks & Trust Companies
Insurance Companies

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5
Q

Salesperson Course

Brokeareg Book - Unit 1

A

75 Hours

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6
Q

Broker Course

Brokeareg Book - Unit 1

A

150 Hours
- 90hrs General Brokerage
- 30hrs Ethics & Agency
- 30hrs Office Management

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7
Q

Temp License

Brokeareg Book - Unit 1

A

If the Broker dies, becomes mentally or physically incapacitated and the office has no other broker.
A salesperson with 3 years of experience.
30 days after the event for 1 year

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8
Q

License Fees

Brokeareg Book - Unit 1

A

Broker: $270 initial license, $200 renewals
Salesperson: $160, $100

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9
Q

Continued Ed (CE)

Brokeareg Book - Unit 1

A

12 Hours before April 30th

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10
Q

Guaranty Fund

Brokeareg Book - Unit 1

A

Must obtain a Court Judgement naming REC as a party to the suit
$10 per salesperson, $20 for broker
Max $20000 for single claim per offense

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11
Q

Rental Refferal Company

Brokeareg Book - Unit 1

A

No rentals w/o landlords consent (24hrs for confirming oral)
Check advertised units every day, and nonadvertised units every 3 days
Above $25 needs to be deposited to escrow

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12
Q

REC Members

Brokeareg Book - Unit 1

A

8 People
- 5 RE Brokers (10 years of Experience)
- 2 Gen Public
- 1 Dept of State Gov

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13
Q

CE

Brokeareg Book - Unit 1

A

12 hours
6 hours of core (2 hours of ethics, 1-hour fair housing and disc, 3 hours of other core)

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14
Q

Commingling

Brokeareg Book - Unit 2

A

Mixing their own funds

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15
Q

Permanent Records

Brokeareg Book - Unit 2

A

Keep 6 years

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16
Q

Trust Account

Brokeareg Book - Unit 2

A

Escrow Account

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17
Q

Sales Contracts

Brokeareg Book - Unit 2

A

Immediately receive a duplicate original
1-4 Family & Single Building lots
Attorney Review Clause
Listings with Attorney General Memo
All written offers within 24 hours

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18
Q

Price Fixing

Brokeareg Book - Unit 2

A

Sherman Act

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19
Q

Probation
Suspension
Revocation

Brokeareg Book - Unit 2

A

REC can conduct
Probation
Suspension
Revocation
$5000 for first offense
$10000 for subsequent offenses
$25000 max
3 violations and the lic is revoked

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20
Q

Guilty Knowledge

Brokeareg Book - Unit 2

A

Knew what was going on and did not stop it

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21
Q

Earnest Money Deposit

A

Deposit within 5 days in a trust account

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22
Q

Brokerage

Brokeareg Book - Unit 3

A

bringing buyers and sellers together

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23
Q

Principal

Brokeareg Book - Unit 3

A

Client

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24
Q

Fiduciary relationship

Brokeareg Book - Unit 3

A

Trust and confidence
An agent is responsible for the money and or property of others
Putting principles interest above all others including the brokers own interest

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25
Q

Types of agencies

Brokeareg Book - Unit 3

A

Universal agent (Without prior permission)
General agent (broad range of matters) property manager
Special agent (specific capacity) real estate agent or broker
Power of attorney (A legal written authorization for specific areas)

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26
Q

Fiduciary responsibilities

Brokeareg Book - Unit 3

A

Care
Obedience
Accounting
Loyalty (confidentiality)
Disclosure
General duty of fair dealing

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27
Q

Fiduciary responsibilities - Care

Brokeareg Book - Unit 3

A

Care and diligence while transacting
Knowledgeable about the property to arrive at a reasonable listing price
Discover material facts
Properly handling escrow deposits
Obtaining all signatures

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28
Q

Fiduciary responsibilities - Obedience

Brokeareg Book - Unit 3

A

Obeying the principles lawful instructions
excludes unlawful or unethical instructions

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29
Q

Fiduciary responsibilities - Accounting

Brokeareg Book - Unit 3

A

Safeguarding an accounting for all money and property
disclosing expenses
keeping copies of documents for six years
not having secret profits
no commingling

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30
Q

Fiduciary responsibilities - Loyalty (confidentiality)

Brokeareg Book - Unit 3

A

Placing principles interests of all others including agents own interest
Not profiting from principles misfortune
not buying principles property for personal gain

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31
Q

Fiduciary responsibilities - Disclosure (notice)

Brokeareg Book - Unit 3

A

Pass on all facts and information
no Confidentiality applies to sellers disclosure if made to buyers broker

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32
Q

Fiduciary responsibilities - General duty of fair dealing

Brokerage Book - Unit 3

A

Dealing fairly and honestly with all parties

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33
Q

Fiduciary responsibilities - General duty of fair dealing

Brokerage Book - Unit 3

A

Dealing fairly and honestly with all parties

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34
Q

Sub agent

Brokerage Book - Unit 3

A

The salesperson functions as an agent of the broker and as a subagent of a principal

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35
Q

Brokers Compensation

Brokerage Book - Unit 3

A

After listing broker procures a ready, willing and able buyer, the seller technically is liable for the brokers commission

A broker generally is due a commission if a sale is not finalized because of the principles default.

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36
Q

Employees

Brokerage Book - Unit 3

A

Must have income tax, Social Security, and unemployment tax withheld from wages by broker
May receive employee benefits
Must adhere to office regulations

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37
Q

Independent contractors

Brokerage Book - Unit 3

A

Assume responsibility for paying on income tax and Social Security
Cannot receive any employee benefits whatsoever from Broker
Can be told what company expectations are

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38
Q

Procuring Cause

Brokerage Book - Unit 3

A

The one who first introduced the buyer to the property
A meeting of the minds: when the parties are in agreement on price, down payment and financing method

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39
Q

Meeting of the Minds

Brokerage Book - Unit 3

A

When the parties are in agreement on price, down payment and financing method

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40
Q

Kickbacks

Brokerage Book - Unit 3

A

The return of part of the commission as gifts or money to sellers

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41
Q

Antitrust Laws
Sherman Anti-trust Act

A

Illegal price fixing: Uniform commission rates among competing firms would be a clear violation of state and federal antitrust laws
Allocation of customers or markets:
Sherman anti-trust Act: punishable by a maximum 1 million and up to 10 years in prison

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42
Q

Salespersons Compensation

Brokerage Book - Unit 3

A

Mutual agreement between the broker and sales person
A broker may agree to pay a split
sales person may never except compensation from a buyer, seller or broker except the one they are associated with

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43
Q

Disclosure of Agency
Consumer Information Statement CIS

Brokerage Book - Unit 3

A

A form of disclosure to all sellers, buyers, landlords, and tenants on the sale or rental of 1 to 4 family residential properties or vacant one family lots.
CIS describes the types of business relationships a real estate agent can enter into with a customer or client and the duties associated with each relationship
Furnish CIS before any discussions and take place. Prior to the first showing of the property.

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44
Q

Creation of Agency

Brokerage Book - Unit 3

A

Written employment contract:
* Sellers; exclusive listing agreement
* Buyers; exclusive buyer agency agreement

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45
Q

Termination of agency

Brokerage Book - Unit 3

A
  • Death or incompetency of either party
  • Destruction or condemnation of the property
  • Expression of the term of the agency
  • Mutual agreement
  • Renunciation by agent
  • Revocation by principal
  • Bankruptcy of either party
  • Completion or fulfillment of the purpose of agency
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46
Q

Dual agency

Brokerage Book - Unit 3

A

Broker represents both parties in the same transaction
Undisclosed Dual agency is it illegal
An agent cannot give the highest level of loyalty to two or more principles in the same transaction
Dual agency is legal in New Jersey if the broker
* explains fully the legal duties that will and will not be available from the broker
* discloses any other business relationships that might affect the transaction
* octanes sellers and buyers written informed consent to the brokers acting as a dual agent and CIS
* advises as each party may want to consult a lawyer

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47
Q

Disclosure - Material information

Brokerage Book - Unit 3

A

Any defects of material nature that affect the physical condition of the property
Latent defects (hidden)

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48
Q

Disclosure - Latent Defects

Brokerage Book - Unit 3

A

Hidden

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49
Q

CLUE

Brokerage Book - Unit 3

A

Comprehensive loss underwriting exchange hey Siri report from LexisNexis the comping to December stay there from participating insurance companies

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50
Q

Social conditions and psychological impairments

Brokerage Book - Unit 3

A

Noisy dogs, unpleasant neighbors, suicide. If asked, agents must pass along any information they possess but they are not required to investigate social or psychological conditions.

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51
Q

Off-site conditions

Brokerage Book - Unit 3

A

Hazardous waste dump site
new construction can cancel a sale in 5 days

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52
Q

Megan’s Law

Brokerage Book - Unit 3

A

Created in 1995 in New Jersey
Requires that community be alerted to the presence of convicted sex offenders
* New Jersey lease and sale contracts
* Licenses are not permitted to inquire or give information
* Suggest a concerned client to check New Jersey State police website

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53
Q

Misrepresentation

Brokerage Book - Unit 3

A

Puffing: extravagant statements of opinion
Fraud: Deceitful or dishonest practices intended to harm or take advantage of another person
* Fraudulent misrepresentation: Intentional
* Negligent misrepresentation: Unintentional
* Innocent misrepresentation: Honest

54
Q

Misrepresentation - Puffing

Brokerage Book - Unit 3

A

Extravagant statements of opinion

55
Q

Misrepresentation - Fraud

Brokerage Book - Unit 3

A

Deceitful or dishonest practices intended to harm or take advantage of another person

56
Q

Misrepresentation - Fraudulent misrepresentation

Brokerage Book - Unit 3

A

Intentional

57
Q

Misrepresentation - Negligent misrepresentation

Brokerage Book - Unit 3

A

Unintentional

58
Q

Misrepresentation - Innocent misrepresentation

Brokerage Book - Unit 3

A

Honest

59
Q

UFFI

A

Urea-formaldehyde foam insulation

60
Q

E & O

Brokerage Book - Unit 3

A

Errors and omissions insurance; defense against many circumstances but does not cover fraud. It is carried by many brokers and some individual sales persons. It is like a malpractice insurance

61
Q

Dual contracts

Brokerage Book - Unit 3

A

Generally used to cheat the lender
Illegal in New Jersey

62
Q

Ethics

A

A system of moral principles, rules, and standards of conduct.
Addresses two sides of profession:
* They establish standards of integrity and confidence in dealing with consumers open industries services.
* They define code of conduct for relationships within the industry, among its professionals.

63
Q

Civil rights act of 1866

Brokeareg Book - Unit 4

A

An Outgrowth of 14th amendment
* Race
* Color

64
Q

Federal fair housing act of 1968

Brokeareg Book - Unit 4

A

Tittle VIII of the civil rights act of 1968
Residential Properties Only!
* Race
* Color
* Religion
* National Origin

Exemptions for sale or rental:
* Single Family FSBO, No Agent, No Discriminstory Ad
* Rental of Rooms or Units owner occupied 1-4 dwelling
* Dwellings owned by religious organizations
* A private club long as not operated commercially

65
Q

Housing and community development act of 1974

Brokeareg Book - Unit 4

A

This is an amendment to 1968
Sex

66
Q

Fair housing amendments of 1988

Brokeareg Book - Unit 4

A

This is an amendment to 1968
* Familial status
* Disability

Exemptions:
Senior housing is exempt if solely occupied by 62 years old and older, and if 80% of its units are occupied by at least one person 55 and older

Jones vs Mayer
All racial discrimination without exception

67
Q

Equal housing opportunity poster

Brokeareg Book - Unit 4

A

This is an amendment to 1968
Department of housing and urban development poster and needs to be displayed at Brokerage

68
Q

Blockbusting

Brokeareg Book - Unit 4

A

AKA panic peddling
making representations regarding the entry or prospective entry of minority persons into the neighborhood

69
Q

Steering

Brokeareg Book - Unit 4

A

Channeling Homeseekers from an area

70
Q

Redlining

Brokeareg Book - Unit 4

A

Refusing to make mortgage loans or issue insurance policies in specific geographic areas

71
Q

HUD fair housing enforcement

Brokeareg Book - Unit 4

A

One year after the alleged act

72
Q

New Jersey law against discrimination

Brokeareg Book - Unit 4

A

Originally passed in 1945 and broadened in over the years
* Race
* Color
* Religion (creed)
* National origin
* Sex
* Marital Status
* Disability
* Familial Status
* Lawful Source of Income
* Ancestory
* Affectional or sexual orientation
* Nationality
* Gender Identity or Expression
* Pregnancy or breast-feeding
* Liability for service in the US Armed Forces

Exepmtions:
* Age
* Rental of rooms, apartments for owner occupied duplex or open down to family dwelling
* Rentals for one sex or religious-based organizations

73
Q

Equal credit opportunity act of 1974 (lending)

Brokeareg Book - Unit 4

A
  • Race
  • Color
  • Religion (creed)
  • National origin
  • Sex
  • Marital Status
  • Lawful Source of Income
74
Q

New Jersey anti-discrimination poster

Brokeareg Book - Unit 4

A

Needs to be displayed in real estate and rental offices

75
Q

New Jersey fair housing enforcement

Brokeareg Book - Unit 4

A

Must be filed with Attorney General within 180 days

76
Q

Attorney general’s memorandum

Brokeareg Book - Unit 4

Brokeareg Book - Unit 4

A

Must be given to the homeowner at the time of the property is listed
Salespersons and brokers must refuse listings from owners who indicate that they intend to violate the law against discrimination

77
Q

Multiple dwelling reporting

Brokeareg Book - Unit 4

A

Owners of developments containing 25 or more apartments must file an annual report with the division of civil rights. The report covers racial composition of the tenants and methods of advertising and handling inquiries

78
Q

Zoning Discrimination Mount Laurel I

Brokeareg Book - Unit 4

A

1971 filed by NAACP against the town of Mount Laurel New Jersey
no and moderate income cannot be zoned out

79
Q

Zoning Discrimination Mount Laurel II

Brokeareg Book - Unit 4

A

In 1983
20% Must be set aside zoning for mobile homes and the requirement that communities must cooperate with. Then subsidies

80
Q

Devise

Brokeareg Book - Unit 5

A

Gift of real estate in a will

81
Q

Land

Brokeareg Book - Unit 5

A

Extending downward from the surface to the center of the earth and upward to infinity including all things permanently attached by nature

82
Q

Parcel

Brokeareg Book - Unit 5

A

Add specific track of land with legally defined boundaries

83
Q

Real estate

Brokeareg Book - Unit 5

A

Bundle of rights
Sold by deed

84
Q

Rights - Subsurface or Mineral Rights

Brokeareg Book - Unit 5

A

Natural resources lying below the earth surface
Maybe owned separately

85
Q

Rights - Air Rights

Brokeareg Book - Unit 5

A

The rights to use the air above the land may be sold or least independently of the lend itself

86
Q

Water Rights - Littoral

Brokeareg Book - Unit 5

A

Land bordering on oceans, seas, or large lakes affected by tide currents

87
Q

Water Rights - Riparian

Brokeareg Book - Unit 5

A

Land bordered or traversed by stream or waterway

88
Q

Water - Avulsion

Brokeareg Book - Unit 5

A

If a stream is the common border between two properties and if the stream moves to another area, the property lines would remain the same as before

89
Q

Water - Accretion & Alluvion

Brokeareg Book - Unit 5

A

Accretion: The process. Increase or addition of land by the deposit of sand or soil washed up naturally from a river lake or sea.
Alluvion: The solid material, new land by deposition

90
Q

Water - Erosion

Brokeareg Book - Unit 5

A

Losing land by water

91
Q

Water - Reliction

Brokeareg Book - Unit 5

A

Creation of dry land by gradual withdrawal of water from the land by lowering of its surface level

92
Q

Chattels

Brokeareg Book - Unit 5

A

Tangible personal property, Personalty

93
Q

Emblements

Brokeareg Book - Unit 5

A

Personal property
Crops

94
Q

Fixtures

Brokeareg Book - Unit 5

A

An article that was once personal property but has been so attached to land or to a building that it is now considered to be part of the real estate.

95
Q

Tenant and trade fixtures

Brokeareg Book - Unit 5

A

An article owned by a tenant and attach to a rented space for use in conducting a business is a trade fixture
Tenant fixtures can also be fixtures installed by a tenant in a residential rental property

96
Q

Estates in land

Brokeareg Book - Unit 6

A

The amount and kind of ownership interest that a person has in real property.
2. Freehold estates (owners)
2. Less than freehold or leasehold estate (tenants)

97
Q

Freehold estates

Brokeareg Book - Unit 6

A

Owners
2. Fee simple
1. Fee determinable
1. Life Estates

98
Q

Fee simple

Brokeareg Book - Unit 6

A

Largest bundle of rights no time limit
(the best)

99
Q

Fee determinable

Brokeareg Book - Unit 6

A

aka conditional fee or defeasible fee

For example giving their land to open space foundation as long as it’s maintained is it wildlife preserve

Remainderman: the property goes back to the remainderman if a third party is named

100
Q

Life estate

Brokeareg Book - Unit 6

A

reversionary interest
Limited to the life of a specific person (person B)
Person A (Owner) or Person C (A’s heirs, remainderman) can get the property

101
Q

Dower and Curtesy

Brokeareg Book - Unit 6

A

Dower; wife’s right
Curtesy; husband’s right
May 28, 1980 NJ Abolished Newer D&C rights

102
Q

Encrumbrances

Brokeareg Book - Unit 6

A

An encumbrance is a claim, lien, charge, or liability attached to and binding on real property; its affects or limits its use, value, or title.
1. Liens (financial claims against a property)
1. Physical or usage (restrictions, easements, licenses, and encroachments)

103
Q

Encrumbrances - Liens

Brokeareg Book - Unit 6

A

Financial claim against the property
voluntary lien (mortgage)
involuntary lien (tax)

General lien affects all the property someone owns
Specific lien is placed against one parcel of real estate only (mortgage, Special Assessment, construction/mechanics, utility, Ad Valorem)

104
Q

Effects of Liens on Title

Brokeareg Book - Unit 6

A
  • The owner is free to sell…
  • Runs with the land and still binding after the sale
  • Do not survice foreclosure (except property taxes and special assessments)
105
Q

Priority of Liens

Brokeareg Book - Unit 6

A

Determined by the date of recording in the public records of the county where the property is located
Taxes and special assessments have priority over other liens

106
Q

Mortgage Liens

Brokeareg Book - Unit 6

A

Mortgage lenders generally require a preferred lien, referred to as a first mortgage lien (this means that aside from taxes no other major liens against the property take priority over the mortgage lien)

107
Q

Construction liens

Brokeareg Book - Unit 6

A

Also known as mechanics lien, placed against real estate by workers who have contributed labor or material to that specific property and who have not been paid

108
Q

Judgments

Brokeareg Book - Unit 6

A

A decree issued by a Court (money judgment etc)
A general, involuntary lien on a real property
A judgment differs from a mortgage in that a specific parcel of real estate was not given as security at the time debtor–creditor relationship was created.

109
Q

Other liens

A
  • Estate taxes
  • inheritance taxes
  • IRS tax liens
110
Q

Lis Pendens

Brokeareg Book - Unit 6

A

(Lien Pending)
A judgment or other decree effecting real estate is rendered at the conclusion of a lawsuit.
When any suit is filed that potentially affects the title, a notice known as lis pendens is recorded

111
Q

Encumbrances - Easements

Brokeareg Book - Unit 6

A

A right acquired by one party to use the land of another party for a particular purpose
Easements can be created and terminated

112
Q

Encumbrances - Easement Appurtenant

Brokeareg Book - Unit 6

A

An easement that grants rights to the owner of an adjacent parcel of land
Servient estate: The tract over which the easement runs
Dominant estate: Benefiting from the easement

113
Q

Encumbrances - Easement in Gross

Brokeareg Book - Unit 6

A

A simple right to use the land of another is an easement in gross (Power company)
* no adjoining lanes are involved
* if they need ends the easement also ends

114
Q

Encumbrances - Easement by necessity

Brokeareg Book - Unit 6

A

If the only access to a parcel is through another’s property, the owner may acquire an easement by necessity.

115
Q

Encumbrances - Easement by prescription

Brokeareg Book - Unit 6

A

When someone has used another person’s land for certain period of time is defined by state law
Tacking: successive theories of continuous, uninterrupted occupation by different parties may be combined to reach the prescriptive period.

116
Q

Encumbrances - Party Walls

Brokeareg Book - Unit 6

A

A wall on the boundary lines between two owners’ lots
* Each owner owns half of the wall
* Each owner has an assessment right in the other half of the wall for support of the building
* A written agreement should be used for this
* Each owner must pay half of the expenses

117
Q

Encumbrances - Licenses

Brokeareg Book - Unit 6

A

Add permission to enter the land of another for a specific purpose is a license

118
Q

Encumbrances - Encroachments

Brokeareg Book - Unit 6

A

When all or part of a building, fence, driveway or any other installation illegally extends beyond the land of its owner and covers some land of an adjoining owner or a street or alley

119
Q

Encumbrances - Deed restrictions

Brokeareg Book - Unit 6

A

Restrictive clause is added to a deed when property is conveyed that are establish by the seller to restrict future owners use of the property

120
Q

Forms of ownership - Tenancy in Severalty

A

One person or entity (sole ownership)
when the person dies, title to the property will pass to his or her heirs or devisees

121
Q

Forms of ownership - Tenancy in common

Brokeareg Book - Unit 7

A
  • 2 more people own it
  • Undivided interest in the whole property
  • They can sell their interest without the consent of co-owners
  • In death, the interest transfers to devisees
  • Can file a suit to partition the property
122
Q

Forms of ownership - Joint tenancy

A

Two or more people can on the property
Carries right of survivorship
Interest will not pass to the other owner’s heirs

Requirements
* Unity of time
* Unity of title
* Unity of interest
* Unity of possession

123
Q

Forms of ownership - Tenancy by the entirety

A

Husband and wife (no common law)
* owners must be husband and wife
* owners have rights of survivorship
* there is no right to petition

124
Q

Business ownership of real estate - Partnership

A
  1. In a **General partnership: **all partners participate to some extent in the operation and management of the business and may be held personally liable for business losses and obligations even beyond the amount of their initial investment.
  2. A Limited partnership: Includes a general partner as well as limited partners. The limited partner do not participate in the operation of the business and each can be held liable for the business’s losses only to the extent of their investment
125
Q

Business ownership of real estate - Corporations

A

Severalty or tenant in common if it is partial ownership
Managed and operated by its Board of Directors

126
Q

Business ownership of real estate - Limited Liability Companies

A
  • Members have the tax advantages offered by partnerships.
  • Limited liability offered by the corporate form of ownership
127
Q

Business ownership of real estate - Other forms of ownership

A

Syndicate is a joining together of tour more people to carry out a particular business project
**Joint venture **is an organization of people or firms designed to carry out a single project
A Real Estate Investment Trust (REIT) is a form of organization that is useful for taking advantage of certain tax benefits

128
Q

Condominiums

A
129
Q

Cooperatives

A
130
Q

Town houses

A
131
Q

Time sharing

A

Real Estate (1 decks)

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