Ch. 5 Real Estate Brokerage Operations

Question 1

The act of having a third party render a blinding decision in a dispute between two parties.

Answer 1

Arbitration

Question 1

An advertisement that provides only a telephone number, a post office box, and/or and address without the licensed name of the brokerage firm.

Answer 1

Blind advertisement

Question 1

To mix together money or a deposit with personal funds; combine; intermingle.

Answer 1

Commingle

Question 1

When different parties each make claims that are inconsistent with one another.

Answer 1

Conflicting demands

Question 1

Unauthorized use or retention of money or property that rightfully belongs to another person.

Answer 1

conversion

Question 1

A artificial or fictitious person formed to conduct specified types of business activities.

Answer 1

Corporation

Question 1

A course of action declaring rights claimed under a contract or statute intended to prevent loss or to guide performance by the party or parties affected.

Answer 1

Declaratory judgement

Question 1

Earnest money or some other valuable consideration given as evidence of good faith to accompany an offer to purchase or rent.

Answer 1

`Deposit

Question 1

A type of money that a broker may handle for others in the ordinary course of business; also referred to as good-faith deposit or binder deposit.

Answer 1

Earnest money deposit

Question 1

An account in a bank, title company, credit union, savings association, or trust company used solely for safekeeping customer funds and not for deposit of personal funds; impound account or trust account.

Answer 1

Escrow account

Question 1

A course of action for determining the disposition of a contested deposit.

Answer 1

Escrow disbursement order (EDO)

Question 1

An association of two or more persons for the purpose of jointly conducting a business, each being responsible for all the debts incurred in the conducting of that business.

Answer 1

General partnership

Question 1

A party’s honest intent to transact business, free from any intent to defraud the other party; each party’s faithfulness to one’s duty or obligations set forth by contract.

Answer 1

Good faith

Question 1

1. John Anderson is a licensed real estate sales associate. Under which name may he register and be licensed?
   a. Complete Real Estate Sales Services
   b. John Anderson Brokerage
   c. John Anderson, LLC.
   d. John Anderson and Partners.

Answer 1

C

Question 1

2. A sales associate receives a binder deposit from a prospective buyer on Thursday monring. Later that same day, the associate gives the binder deposit to his broker. By the end of business on what day of the week must the broker deposit the funds into her escrow account?
   a. Friday
   b. Monday
   c. Tuesday
   d. Wednesday

Answer 1

C

Question 1

3. Real estate brokerage trust funds may NOT be deposited into a
   a. title company in Florida that has trust powers.
   b. credit union in Florida.
   c. commercial bank in Florida.
   d. life insurance company in FLorida.

Answer 1

D

Question 1

4. In connection with escrow accounts, the Florida Real Estate Commission has rules and regulations that
   a. permit the depositing of personal funds into an escrow account as long as adequate records are kept.
   b. prohibit the depositing of more that $1,000 of personal funds into a sales escrow account.
   c. require deposits to be placed in an escrow account by the sales associate.
   d. require escrow disbursement orders to be prepared when making all deposits.

Answer 1

B

Question 1

5. Real estate sales associates who receive checks payable to them as deposits on the purchase of real property must
   a. endorse the checks, deposit them in their employers accounts, and maintain good records.
   b. endorse the checks and immediately turn them over to their employers.
   c. deposit the checks immediately in their own accounts and notify their employers of the transactions.
   d. deposit the check immediately and give their employers the equivalent amount in the form of checks or cash.

Answer 1

B

Question 1

6. Which statement is FALSE regarding escrow accounts?
   a. The escrow account may be either interest-bearing or non interest-bearing.
   b. A broker may choose to have an attorney or a Florida title company maintain the escrow account.
   c. It is illegal for the broker to keep any earned interest even if the buyer and the seller give written permission.
   d. A broker must get written authorization from the buyer and the seller prior to placing escrow funds in an interest-bearing escrow account.

Answer 1

C

Question 1

7. A dispute arises between the buyer and seller as to which one is entitled to escrowed property. The broker should first
   a. mediate the matter.
   b. arbitrate the matter with the consent of both parties.
   c. notify the FREC in writing, unless exempted from the notice requirements.
   d. submit the matter to a court of law for adjudication.

Answer 1

C

Question 1

8. An individual who paid for rental information but did not obtain a rental is entitled to repayment of
   a. the fee
   b. the fee if requested within 10 days of the contract/receipt date.
   c. 75 percent of the fee if requested within 10 days of the contract/receipt date.
   d. 75 percent of the fee if requested within 30 days of the contract/receipt date.

Answer 1

D

Question 1

9. A woman purchased a rental list one week ago from a real estate broker. She inspected an apartment described in the list. The apartment manager told her that cats were not allowed. She had specifically looked at the apartment because the rental list indicated that pets were allowed. Immediately, the woman orally demanded and should legally receive from the broker
   a. nothing, because the demand is not in writing.
   b. 75 percent of the fee paid.
   c. 100 percent of the fee paid.
   d. nothing, because the broker may not be held accountable for the actions of the property manager.

Answer 1

C

Question 1

10. If the license issued to the only active broker of a real estate corporation becomes void for any reason, another active broker must be appointed within 14 calendar days. Failure to appoint another active broker will result in what action against the corporation’s registration?
    a. Automatic cancellation
    b. Dental
    c. Automatic suspension
    d. Revocation

Answer 1

C

Question 1

11. A broker decides to incorporate his new real estate business in order to reduce his personal liability. The broker must do each requirement EXCEPT
    a. register the brokerage entity with the DBPR.
    b. file the articles of incorporation with the Florida Department of State.
    c. register all officers and directors of the company with the DBPR.
    d. filer the articles of incorporation with the Secretary of the DBPR.

Answer 1

D

Question 1

12. Which statement is TRUE regarding a lien filed by a broker under the commercial Real Estate Sales Commission Lien Act?
    a. The lien applies to commission only and does not include other fees the owner agrees to pay in the brokerage agreement.
    b. The lien is filed against the real property covered in the brokerage agreement.
    c. The lien takes priority as of the date of the brokerage agreement.
    d. The broker must disclose to the owner at the time of signing, or before the owner signs the brokerage agreement, that Chapter 475, Part III, creates lien rights for commission earned by the broker.

Answer 1

D

Question 1

13. To form a general partnership, two or more persons must
    a. agree to share equally in the profits and losses.
    b. agree to engage in business together and share in the profits and losses.
    c. be personally qualified and licensed as real estate brokers.
    d. invest equal amounts of money in the business and each be entitled to a share of the profits.

Answer 1

B

Question 2

14. One difference between a general partnership and a limited partnership is that
    a. only a general partnership may be registered as a real estate broker.
    b. limited partners must make a cash or property investment.
    c. while both have general partners, there must be two or more general partners in a limited partnership.
    d. limited partners must be licensed as either active or inactive sales associates.

Answer 2

B

Question 3

The time peril during which a broker must deposit escrow funds; no later than the end of the third business day after the broker’s sales associate or an employee has received the funds.

Answer 3

Immediately

Question 4

15. Which business entity may be registered as a real estate broker?
    a. Corporation sole
    b. Cooperative association
    c. Limited partnership
    d. Business trust

Answer 4

C

Question 5

A course of action when two contesting parties cannot reach an arbitrated agreement; a legal proceeding whereby the broker, having no financial interest in the disputed funds,, deposits with the court the disputed escrow deposit so that the court can determine who is the rightful claimant.

Answer 5

Interpleader

Question 6

16. A broker has conflicting demands from a buyer and a seller regarding an escrow deposit. The broker may employ all of the escape procedures listed below EXCEPT
    a. request an escrow disbursement order.
    b. provided all of the parties consent, submit the matter to arbitration.
    c. request an informal hearing before the FREC to resolve the matter.
    d. through an interpleader, submit the matter to a court proceeding for determination of the rightful claimant.

Answer 6

C

Question 7

Payment of money from someone other that the buyer or seller associated with teal estate business.

Answer 7

Kickback

Question 8

17. A broker is getting prepared to open Sunnyside Realty as a sole proprietorship and is placing an order to have an entrance sign made. Which wording does NOT need to be included on the sign?
    a. Sunnyside Realty
    b. The broker’s legal name
    c. Licensed real estate broker
    d. 1000 Sunset Blvd.

Answer 8

D

Question 9

An alternative, hybrid business entity with the combined characteristics and benefits of both limited partnerships and S corporations.

Answer 9

Limited liability company (LLC)

Question 10

18. A licensed real estate broker and an attorney who specializes in contract law form a joint venture for the purpose of locating and selling to investors raw land that is suitable for commercial development. Which statement is true regarding this arrangement?
    a. The attorney is exempt from the requirement to hold a broker’s license because she is an attorney.
    b. They have formed an illegal ostensible partnership.
    c. Because they are performing real estate services for compensation, they both must be licensed real estate brokers.
    d. A joint venture is not required to register with the DBPR; therefore, there is no need for both parties to hold real estate licenses.

Answer 10

C

Question 11

A business entity that features protection from personal liability but with fewer legal restrictions compared with other business entities.

Answer 11

Limited liability partnership (LLP)

Question 12

19. A broker receives conflicting demands concerning a roof inspection report. Both the buyer and seller claim the earnest money deposit. The broker must
    a. provide written notification to the FREC within 10 business days.
    b. follow the written instructions of the broker’s buyer and seller.
    c. institute one of the statutory settlement procedures within 30 days after the last demand.
    d. request an escrow disbursement order from the DBPR.`

Answer 12

C

Question 13

A business entity consisting of one or more general partners and one or more limited partners.

Answer 13

Limited partnership

Question 14

20. The sales commission rates applicable to the various types of property sold in Florida are determined by
    a. FREC rules and regulations.
    b. agreement between each broker and buyer or seller.
    c. the local board of REALTORS.
    d. agreement between each seller and buyer.

Answer 14

B

Question 15

A lawsuit; the act of carrying on a lawsuit; a case before a court of law.

Answer 15

litigation

Question 16

21. When a sales associate decides to leave the employ of her broker to work for another broker, she
    a. may take copies of all listings she personally obtained while employed by her former broker.
    b. must notify the DBPR within ten days of her change in broker-employer.
    c. may telephone sellers of her former employer to encourage them to cancel their listing agreements with the former employer and then list with her new broker.
    d. must apply for a new real estate license under the name of her new broker.

Answer 16

B

Question 17

The act of having a third party attempt to reconcile a dispute between two parties.

Answer 17

mediation

Question 18

22. A broker decides to organize his brokerage as a limited partnership. What must he accomplish?
    a. File the limited partnership agreement with the Florida Department of State
    b. Register the limited partnership with the DBPR
    c. Register all general partners with the DBPR
    d. All of the above.

Answer 18

D

Question 19

One or more parties cause a third party to be deceived into believing that a business relationship exists when no such arrangement exists.

Answer 19

Ostensible partnership

Question 20

23. In Florida, listings obtained and any commissions paid by the buyer or seller are
    a. legally the sales associate’s property.
    b. jointly owned by the sales associate and the sales associate’s employer.
    c. legally classified as the property of the employing property owner.
    d. legally the property of the sales associate’s employer.

Answer 20

D

Question 21

Any means by which to contact the brokerage firm or individual licensee including mailing address(es), physical street address(es), e-mail address(es), telephone number(s), or facsimiles telephone number(s).

Answer 21

point of contact information

Question 22

24. Which statement is FLASE concerning the payment of an unearned fee or kickback?
    a. A real estate licensee may be paid a fee for refererring buyers to a title company, provided the buyer is informed in advance of the facts concerning the fees.
    b. A real estate licensee may share part of the commission with the buyer or seller in a real estate transaction.
    c. A real estate licensee must also be licensed as a mortgage broker to be legally paid a fee for referring buyers to a mortgage lender.
    d. The payment of a kickback must not violate RESPA.

Answer 22

A

Question 23

The notebook of written rules and regulations that set desired standards and procedures in an office.

Answer 23

policy manual

Question 24

25. Two brokers from different brokerages agree to work with one another to market a prestigious marina in Naples, Florida. One broker is particularly knowledgeable regarding marinas and the other is an expert on the Naples real estate market, so they decide to combine their expertise on this particular listing. This business arrangement is referred to as
    a. an ostensible partnership.
    b. a general partnership.
    c. a joint venture.
    d. a limited partnership.

Answer 24

C

Question 25

Dealing as an individual in business.

Answer 25

sole proprietorship

Question 26

The initiation of a telephone call for the purpose of encouraging the purchase of, or investment in, property, goods, or services.

Answer 26

telephone solicitation

Question 27

Cash, checks, money orders, and items that can be converted into cash, such as deeds and personal property, that a person (broker) holds in trust for another person.

Answer 27

trust funds