Chap 5

Question 1

Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation?

A)
Susan must partner with a real estate broker in order for her license to be issued this way.
B)
Susan has formed a real estate brokerage business as a limited liability company (LLC).
C)
Susan is in violation of Florida license law.
D)
Susan has formed a limited liability company (LLC) for income tax purposes only and is employed by and registered under either a licensed real estate broker or an owner-developer.

Answer 1

D)
Susan has formed a limited liability company (LLC) for income tax purposes only and is employed by and registered under either a licensed real estate broker or an owner-developer.
Broker associates and sales associates must have their licenses issued in their legal names. A sales associate is allowed by law to form as a limited liability company. The DBPR issues the license in the licensee’s actual name and includes the entity designation on the face of the license. The LLC may be formed for income tax purposes only, and it is not a real estate brokerage entity.

Question 2

Which settlement procedure involves a negotiated settlement between the disputing parties?

A)
Mediation
 B)
Escrow disbursement order
 C)
Arbitration
 D)
Litigation

Answer 2

A. Mediation

Question 3

What is the fine per telephone call for a violation of the Florida Telemarketing Act?

A)
$1,000
 B)
$10,000
 C)
$11,000
 D)
$5,000

Answer 3

10K

Question 4

Which statement is TRUE regarding interest-bearing escrow accounts?

A)
It is illegal for the broker to keep any interest earned on escrow funds.
B)
Florida license law requires that interest accrued on escrowed funds be credited to the buyer because it is the buyer’s earnest money deposit.
C)
The broker must get written permission from all parties to the transaction before placing the funds into an interest-bearing account.
D)
Brokers may make an office policy that all escrow funds must be placed in an interest-bearing account to help cover the costs of maintaining the account and are not required to disclose this in each sale contract because it applies to all transactions.

Answer 4

The answer is the broker must get written permission from all parties to the transaction before placing the funds into an interest-bearing account. If an escrow account is an interest-bearing account, the broker must get written permission from all parties before placing the funds into the account. The written authorization must specify who is entitled to the interest earned.

Question 5

What amount of a broker’s own personal funds may the broker place in the property management escrow account?

A)
$5,000

B)
$6,000

C)
$10,000

D)
$7,000

Answer 5

A. 5k

Question 6

For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR?

A)
90 days, if no escrow funds were collected
B)
Five years, regardless of whether trust (escrow) funds were collected
C)
Two years, regardless of whether the contract closed
D)
Six months, if escrow funds were collected but the contract failed to close

Answer 6

B. 5 years

Question 7

A broker who has a good-faith doubt regarding who is entitled to escrow funds should take which action?

A)
Send a certified letter to the parties to the contract indicating that the broker will forfeit the funds if the parties do not make a claim within 30 business days.
B)
Request an escrow disbursement order from the DBPR.
C)
Notify the FREC in writing of the good-faith doubt within 15 business days.
D)
Institute one of the settlement procedures within 15 business days.
Explanation

Answer 7

C.
The answer is notify the FREC in writing of the good-faith doubt within 15 business days. If a broker has a good-faith doubt as to which party should receive the escrowed property, the broker must notify the FREC, in writing, within 15 business days of having such doubt.