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FRE - Associate Pre-licence > Chapter 04 - Authorized Relationships: Duties & Disclosures (P06) > Flashcards

Chapter 04 - Authorized Relationships: Duties & Disclosures (P06) Flashcards

1
Q

Unwritten law that is derived from court decisions that tend to reflect the attitudes of the community

A

Common Law

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2
Q

Penalty imposed by civil courts that is typically determined by measurable loss

A

Compensatory Damages

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3
Q

Penalty imposed by civil courts that imposes addition damages to punish the party whose actions gave cause for the suit

A

Punitive Damages

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4
Q

Law, enforceable in court, that is based on written statutes that have been enacted by a unit of the government

A

Statutory Law

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5
Q

Law that gives the FREC the ability to levy monetary fines for violation of Commission rules

A

Administrative Law

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6
Q

Law enacted by the Florida legislature that is intended to protect the public by the regulation real estate and appraisal licensees

A

Statutory Law (F.S. 475)

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7
Q

Law that addresses the rights, duties, and related obligations that arise from an individual that is authorized and entrusted to work on behalf of his or her employer and represents the best interests of that employer

A

Agency Law

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8
Q

Agent’s employer in an agency relationship

A

Principal

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9
Q

Agent authorized by the principal to perform a single act defined in the employment contract

A

Special Agent

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10
Q

Agent authorized by power of attorney to act for and represent the principal in all matters, without limitation

A

Universal Agent

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11
Q

Agent with the principal’s authority to act for him or her on a continuing basis, but with authority limited to a specific trade of business

A

General Agent

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12
Q

Party who has been granted authority to act on behalf of another agent and has the same duties to the principal as the agent who was employed by the principal

A

subagent

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13
Q

Agency that exists when a broker is employed under a single agency listing for the sale of a property and is authorized to locate a purchaser on behalf of the owner

A

The broker is a Special Agent of the owner for the single act of locating a purchaser

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14
Q

Relationship that exists when a broker gives permission to a sales associate to transact real estate on the broker’s behalf

A

Subagent of the broker’s principal and has the same duties to the principal as the broker

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15
Q

The Act (legislation) that specifies and defined the relationship between a broker and the broker’s employer and disclosure requirements in residential real estate transactions

A

Brokerage Relationship Disclosure Act (BRDA)

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16
Q

A member of the public who is NOT represented in a single agency relationship

A

Customer

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17
Q

A broker who represents, as a fiduciary, either the buyer or the seller, but not both in the same transaction

A

Single Agent

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18
Q

The party with whom a real estate licensee has entered into a single agent relationship with

A

Principal

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19
Q

A broker who provides limited representation to a buyer, a seller, or both, in a real estate transaction

A

Transaction Broker

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20
Q

Agency relationship created by a broker who represents both the buyer and seller in a transaction as a single agent

A

(Illegal) Dual Agency

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21
Q

Residential sales transaction

A
  • Sale of improved residential property of 4 units or fewer
  • Sale of unimproved residential property of 4 units or fewer
  • Sale of agricultural properties of ten acres or fewer
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22
Q

Purpose of the “Consent to Transition to Transaction Broker” disclosure notice

A

Transition from Single Agent to Transaction Broker

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23
Q

Written disclosure notices required

A
  • Consent to Transition to Transaction Broker
  • No Brokerage Relationship (Notice of Non-representation)
  • Single Agent
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24
Q

The only disclosure notice that must be signed by the principal

A

Consent to Transition to Transaction Broker

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25
Q

Time period required to keep copies of disclosure documents for residential sales transactions that result in a written sales contract

A

Five years from the date of execution (regardless of whether the transaction closes or not)

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26
Q

Three authorized forms of representation

A
  • Transaction Broker
  • Single Agent
  • Non-representation (no brokerage relationship)
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27
Q

How the relationship between the broker and the potential customer is determined

A

By agreement between the broker and the buyer or seller

28
Q

Duties that ALL licensees must perform in any type of customer or agency relationship

A
  • Dealing honestly and fairly
  • Disclosing all known facts that affect value that aren’t readily observable
  • Accounting for all funds
29
Q

Additional duties required for licensees in a transaction broker or single agent relationship

A
  • Using skill, care, and diligence in the transaction
  • Presenting all offers and counteroffers in a timely manner
30
Q

Types of offers that must be presented

A

All offers must be presented, whether written or oral, with or without a binder deposit

31
Q

Possible consequence(s) of failure to present an offer to the employer

A

Concealment or Breach of Trust

32
Q

Condition(s) under which a broker may be authorized to accept an offer on behalf of his or her employer

A

When the broker has been authorized by power of attorney by the employer of by terms specified in the listing contract

33
Q

The presumed relationship between the broker and the employer when no representation has been established in writing

A

Transaction Broker

34
Q

Role of a transaction broker

A

Provide limited representation to a buyer, a seller, or both in a real estate transaction

35
Q

Transaction broker duties

A
  • Dealing honestly and fairly
  • Disclosing all known facts
  • Accounting for all funds
  • Using skill, care, and diligence
  • Presenting all offers
  • Providing limited confidentiality
  • Performing additional agreed upon duties
36
Q

Items a transaction broker may NOT discuss under the duty of limited confidentiality

A

May not discuss:

  • Price (other than listing price)
  • Motivation
  • Terms
  • Other confidential information that may harm that party’s bargaining position
37
Q

Fiduciary duties

A
  • Confidentiality of harmful information (other than material defects)
  • Obedience to all legal instructions
  • Loyalty to act in the principal’s best interest
  • Full Disclosure of facts or rumors
38
Q

Type of brokerage relationship that establishes a fiduciary relationship

A

Single Agency (Single Agent) - the only brokerage relationship with fiduciary duties

39
Q

Single agent duties

A
  • Honest and fair
  • Disclose all known facts
  • Account for all funds
  • Skill, care, and diligence
  • Present all offers
  • Confidentiality
  • Obedience
  • Loyalty
  • Full Disclosure
40
Q

The individual(s) that a single agent may represent in a sales transaction

A

A seller or a buyer, but never both

41
Q

Single agent’s employer

A

Principal

42
Q

Individual that the sales associate has an agency relationship with

A

His or her employing broker, not an agent of the principal

43
Q

Individuals who owe a fiduciary relationship to the principal in a transaction

A

The broker and the sales associate (or broker associate) who is an agent of the broker)

44
Q

Method by which a single agency relationship must be disclosed

A

Fully described and disclosed in writing and completed before, or at the time of, entering into a listing agreement or showing property

45
Q

Parties acting in their own best interest in an adversarial relationship

A

Arm’s Length Relationship (Also Caveat Emptor, or buyer beware)

46
Q

Parties that typically operate at an arm’s length relationship

A

Buyer and Seller

47
Q

The opposite of an arm’s length relationship

A

Fiduciary relationship, where the broker is acting in the principal’s best interest

48
Q

The reason that a broker may need to transition from a single agent to a transaction broker

A

To avoid an illegal dual agency since a broker cannot be an agent for both parties in a transaction

49
Q

Typical reason for a written No Brokerage Relationship notice

A

A For-Sale-By-Owner (FSBO)

50
Q

Broker designates one sales associate to represent buyer and another to represent the seller in the same nonresidential transaction. Buyer and seller must have $1M or more, request single agency representation in a nonresidential transaction

A

Designated Sales Associate

51
Q

Point in time when the broker is entitle to compensation

A

In Florida, when a sales contract is signed by all parties (find a purchaser state)

52
Q

Employment contract between the broker and the seller (owner)

A

Listing Contract

53
Q

Broker is entitled to compensation when employed by an owner to find a purchaser

A

When the broker provides a ready, willing, and able buyer and the contract is signed by all parties

54
Q

The broker is entitled to compensation when employed by an owner to effect a sale

A

When the transaction closes

55
Q

Method by which sales commissions are determined

A

By agreement between the broker and the party or parties paying commission

56
Q

Basis of a real estate sales commission

A

A percentage of the purchase price

57
Q

Amount of compensation if the compensation has not been specified by terms of an employment contract

A

A customary commission rate based on the type of property and fee the broker would normally charge

58
Q

Criminal penalty that can be charged against a broker for refusing to pay commission or compensation to another broker or sales associate as agreed

A

Failure to Account, which is a form of fraud

59
Q

The broker who earns the commission when two or more brokers are competing for a sale

A

Procuring Cause (the one who produced “a continuous and uninterrupted series of events that resulted in the conclusion of a sale”)

60
Q

Illegal action of competing brokers who discuss or establish a uniform price or fee for services

A

Price fixing or Uniform commission rates

61
Q

Condition under which a broker may collect a commission from both parties in a transaction

A

With knowledge and consent of both parties in the transaction

62
Q

Illegal act of manipulating a transaction so as to profit at the expense of the employer without the knowledge of the employer

A

Overage, Secret Profit, of Unjust Commission

63
Q

Legislation that prohibits a broker from giving or accepting a fee, kickback, or anything of value in exchange for the referral of real estate services unless the broker performs that service, is licensed to perform the service, and discloses and receives consent from the parties

A

Real Estate Settlement Procedures Act (RESPA)

64
Q

Florida broker may pay a referral fee to, or share a commission with, a broker licensed or registered by another state or foreign country

A

Out-of-state broker may accompany customer to Florida, but may NOT participate in the transaction in any manner

65
Q

Florida broker may pay compensation, fees, or share a commission with unlicensed individuals in exchange for soliciting or referring business

A

under NO condition (this also includes gifts or reimbursement of expenses)

FRE - Associate Pre-licence (19 decks)

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