Ch 27: Arizona Real Estate Code and Commissioners Rules

Question 1

The term of a member of the Advisor Board is:

a. 5 years
b. 3 years
c. 4 years
d. 6 years

Answer 1

d. 6 years

The Advisory Board members are appointed by the Governor and serve six year terms.

Question 2

Who is responsible for formulating the Real Estate Rules and Regulations in Arizona?

a. Real Estate Commissioner
b. State Legislature
c. Attorney general
d. Governor

Answer 2

a. Real Estate Commissioner

The Commissioner’s Rules are authorized by statutes and allow the Commissioner to interpret the law and develop Rules, which clarify the Real Estate Code.

Question 3

Members of the Real Estate Advisory Board are paid an annual salary of:

a. $20,000
b. Nothing
c. $15,000
d. $6,000

Answer 3

b. Nothing

Members of the Real Estate Advisory Board receive no compensation, but are reimbursed for subsistence expenses and travel expenses.

Question 4

The Real Estate Commissioner is required to do all of the following EXCEPT:

a. Maintain a valid real estate license
b. Conduct administrative hearings
c. Publish a quarterly bulletin
d. Meet quarterly with the Advisory Board

Answer 4

a. Maintain a valid real estate license

The Real Estate Commissioner is not required to have a real estate license and if the Commissioner does have a license it must be on inactive status.

Question 5

How long is the term of office for the Arizona Real Estate Commissioner?

a. 6 years
b. 4 years
c. There is no term of office
d. 2 years

Answer 5

c. There is no term of office

There is no term of office, but the Commissioner serves at the pleasure of the Governor.

Question 6

The Arizona Real Estate Commissioner:

a. Is appointed by the Secretary of State
b. Is appointed by the state legislature
c. Is appointed by the Governor
d. Is elected by popular vote

Answer 6

c. Is appointed by the Governor

The Arizona Real Estate Commissioner is appointed by the Governor and Approved by the Senate. The Commissioner serves at the pleasure of the Governor.

Question 7

A real estate salesperson or broker may form a “team” or “group” to advertise and promote services if:

a. The team or group is comprised of real estate salespersons and or/associate brokers.
b. The team or group is comprised of unlicensed assistants.
c. The team or group is comprised of licensed employees from two or more brokerages
d. The team or group is comprised of real estate salespersons and mortgage brokers

Answer 7

a. The team or group is comprised of real estate salespersons and or/associate brokers.

A real estate salesperson or broker may use the terms “team” or “group” to advertise and promote real estate services if those terms do not constitute the use of a trade or d.b.a. name, and all of the following are true:

• The team or group is comprised of real estate salespersons or brokers
• The team or group members are employed by the same employing broker
• The designated broker maintains a current list of all members of each group or team in the broker’s employ
• The advertising otherwise complies with statutes and rules.

Question 8

A salesperson or broker advertising their own property must include one of the following in their advertisement:

a. Legal description
b. Property address
c. Office phone number
d. Owner/agent

Answer 8

d. Owner/agent

Any salesperson or broker advertising the salesperson’ or broker’s own property for sale, lease or exchange shall disclose the salesperson’s or broker’ status as a salesperson or broker, and as the property owner in the advertisement.

Question 9

A subdivider-broker employs hostesses to show model homes and spec houses. They only show features and give pricing information:

a. Only the subdivider-broker needs to be licensed
b. The hostesses must be licensed
c. The hostesses are employees only and need not to be licensed
d. The hostesses are not required to have a license if they do not accept deposits

Answer 9

b. The hostesses must be licensed

The showing of the house, its features and quoting prices to the public are activities that require licensing.

Question 10

A broker receives an oral offer over the telephone. The broker shall:

a. Present the oral offer
b. Tell the buyer that oral offers are illegal
c. Refuse to present it unless he has earnest money
d. Refuse to present it until it is in writing

Answer 10

a. Present the oral offer

All offers must be presented.

Question 11

A broker must review all contracts submitted through the broker’s office within:

a. 5 days
b. 10 days
c. 7 days
d. 3 days

Answer 11

b. 10 days

Listings and purchase contracts must be approved by the responsible broker within 10 business days. Business days are defined as “a day that is not a Saturday, a Sunday or any other legal holiday in this state”.

Question 12

Blind ads do NOT:

a. Provide the property address
b. Give the listing price of the property
c. Indicate that the advertiser is an agent
d. Provide the name of the owner

Answer 12

c. Indicate that the advertiser is an agent

A salesperson or broker acting as an agent shall not advertise property in a manner which implies that no salesperson or broker is taking part in the offer for sale, lease, or exchange. Such an advertisement is known as a Blind Ad.

Question 13

If an employing broker loses his license, his salespeople can:

a. Continue to operate as before since it wasn’t their fault he lost his license
b. Activate their licenses with another broker
c. Close all transactions as soon as possible
d. Wait to see if their broker gets his license reinstated

Answer 13

b. Activate their licenses with another broker

A licensed salesperson must work for a licensed Employing Broker. If the Employing Broker loses his/her license the licensed salesperson is no longer licensed. The salesperson must activate his/her license with another licensed broker.

Question 14

When the designated broker is on a temporary absence, all of the following are true, EXCEPT:

a. Salesperson may be appointed as a designated representative
b. Written evidence of a designated representative must be kept in the office for one year.
c. Temporary absence relieves the designated broker of responsibility
d. Temporary absence is 30 days or less

Answer 14

c. Temporary absence relieves the designated broker of responsibility

When a designated broker is unable to act within 24 hours, a licensee in the employ of the broker or another designated broker may be named to act on his or her behalf. The designation shall:

• Be made in writing and kept in the broker’s office for one year from its effective date
• Not exceed 30 days’ duration
• Authorize the designee to perform any and all duties the designated broker may legally perform, except that a salesperson shall not be authorized to hire or sever licensees.

Question 15

You, as an agent, decide to purchase a property through your office. Your earnest deposit:

a. May remain in your checking account until the transaction closes escrow.
b. None of the above
c. Must be placed in a neutral escrow depository in Arizona
d. Must be placed in your broker’s trust account

Answer 15

c. Must be placed in a neutral escrow depository in Arizona

As an agent, the licensee works for the broker so the earnest money deposit cannot be placed in the broker’s trust account, as it would create a conflict of interest. The earnest deposit must be placed in a neutral escrow account and that account must be in the state.

Question 16

A real estate salesperson may NOT:

a. Accept a commission from another broker
b. Buy or sell real estate as a principal
c. Represent both buyer and seller in a transaction
d. Show property that is not listed by the licensee’s office

Answer 16

a. Accept a commission from another broker

A broker shall employ and pay only active licensees, and a licensee shall accept employment and compensation as a licensee only from the legally licensed broker to whom the licensee is licensed.

Question 17

When a broker moves his office, how long does he have to remove his sign?

a. 30 days
b. Immediately
c. 6 months
d. 10 days

Answer 17

b. Immediately

The sign is to be removed immediately

Question 18

Brokers MUST keep records of transactions for a period of:

a. Three years from the inception of a transaction
b. Three years from the termination of a transaction
c. Five years from the termination of a transaction
d. Five years from the inception of a transaction

Answer 18

c. Five years from the termination of a transaction

The broker is required to keep an original copy of the contract in the brokerage files for a period of five years from the close of escrow (the termination of a transaction).

Question 19

Which of the following would be unable to file a claim for money from the Recovery Fund?

a. A mortgagor
b. A seller of a residence
c. A buyer in a subdivision
d. A licensee

Answer 19

d. A licensee

A licensee acting as a principal or agent in a real estate transaction has no claim against the fund, including marital communities, corporations, limited liability companies and partnerships in which the licensee is a principal, member, general partner, officer or director or those entities in which the licensee holds a direct or indirect interest of at least ten percent.

Question 20

The maximum amount of money that may be paid from the Recovery Fund for any one licensee is:

a. $30,000
b. $45,000
c. $15,000
d. $90,000

Answer 20

d. $90,000

The distribution of monies from the Real Estate Recovery Fund is limited to actual damages suffered including reasonable attorney’s fees up to a maximum of $30,000 regardless of the number of persons involved in each transaction. The Fund will have no more responsibility to pay losses resulting from acts of a licensee once the fund has paid $90,000 in damages on behalf of the licensee.

Question 21

The Arizona Real Estate Recovery fund is established:

a. To protect the ADRE against lawsuits
b. To compensate any party to a transaction who has suffered a loss from the action or inaction of a licensee
c. To fund the activities of the ADRE
d. As a bonding reference for licensees

Answer 21

b. To compensate any party to a transaction who has suffered a loss from the action or inaction of a licensee

The Commissioner maintains a real estate recovery fund for the benefit of any person aggrieved by any act, representation, transaction or conduct of a licensed real estate broker or salesperson that violates A.R.S. Title 32, Chapter 20 or the Rules adopted pursuant to that Chapter.

Question 22

How much would a licensed real estate salesperson pay into the Real Estate Recovery Fund at his/her renewal should the fund dip below $600,000?

a. $10
b. $5
c. $15
d. $20

Answer 22

a. $10

The Real Estate Recovery Fund is funded by licensees who are required to pay $10 upon issuance of a new license and $20 for issuance of a broker’s license. If on June 30th of ay year, the balance falls below $600,000, every broker who renew their license that following year will be required to pay a fee of $20 and each salesperson a fee of $10.

Question 23

If a claim is paid from the Recovery Fund the status of the individual’s license in question is:

a. Suspended pending investigation
b. Continues until the next renewal
c. Terminated
d. Unaffected until the third claim

Answer 23

c. Terminated

If the Commissioner pays money from the Fund on behalf of a licensee, the license is automatically terminated.

Question 24

How many Recovery Funds does the Arizona Real Estate Commissioner regulate?

a. Four
b. Two
c. One
d. Three

Answer 24

c. One

Until 1993 when the Subdivision Recovery Fund was eliminated there were two funds. Currently there is only one recovery fund; the Real Estate Recovery Fund.

Question 25

The Statute of Limitations limits the time to file a claim with the Arizona Real Estate Recovery Fund to:

a. Three years
b. One year
c. Seven years
d. Five years

Answer 25

d. Five years

Action brought against a licensee for judgment, in order to collect from the Real Estate Recovery Fund, must be started within five years of the time of the cause for action. A licensee must notify the Commissioner in writing by certified mail that such an action has begun.