Ch. 5

Question 1

Automatic Extensions

Answer 1

A prohibited clause within a listing agreement that extends the terms unless either party provides notice to terminate. MD licensees are required to provide exact expiration dates within all employment contracts without any need for notice.

Question 2

Buyer Representation Agreements

Answer 2

Employment contract between a broker and a buyer that creates a special agency relationship allowing the buyer to receive representation in exchange for compensation. Even if the signed agreement was arranged by a salesperson acting for the broker, the ontracts belong to the broker.

Question 3

Material Fact

Answer 3

A material fact is a fact that could encourage (or discourage) either party in going forward with a transaction. Licensees are required to voluntarily disclose material facts that they know, or should know, to all parties within a transaction. Material facts influence whether a buyer would buy and a seller would sell.

Question 4

Ministerial Acts

Answer 4

Functions performed by a licensee that do not involve negotiation, discretion, or expert judgment by that licensee. For example, unlocking the door to provide access for an agreed termite inspection to take place. They may be performed on behalf of both clients and customers. Only magisterial acts can be provided to a client because they require expertise and judgment.

Question 5

Residential Property DIsclosure and Disclaimer Statement

Answer 5

MD sellers, unless exempt, would provide a completed disclosure/disclaimer statement to prospective purchasers who should review the completed form before submitting an offer.