Chapter 2 Opening a Real Estate Office

Question 1

Sole Proprietorship at a glance

Answer 1

The broker: is the only (sole) owner, is personally liable for business debts and torts, must register sole proprietorship with the DBPR, must register trade name (if applicable) with the DBPR. Page 29

Question 2

General Partnership

Answer 2

A general partnership is an association of two or more persons for the purpose of jointly conducting business. One must be a broker. Page 29

Question 3

General Partnership at a Glance

Answer 3

Two or more persons are involved, A general partnership is created by contract (written, oral, or implied), All partners are personally liable, Each partner is responsible for all partnership debts, Each partner can bind the other partners in contracts, Each partner shares in profits and losses as agreed upon.

Question 4

General Partnership

Answer 4

Sales associates and broker associates may NOT be general partners in a real estate brokerage partnership. Page 30

Question 5

Ostensible Partnership

Answer 5

An Ostensible Partnership or (quasi-partnership) exists where there is no real partnership, but the parties act or do business in such a manner that the pubic, having no knowledge of the parties private relations, reasonably would assume that a partnership exist. OSTENSIBLE PARTNERSHIPS ARE CONSIDERED FRAUDULENT AND DECEITFUL. PAGE 31

Question 6

Limited Part ships at a Glance

Answer 6

At Least one general partner and one limited partner are required. General partners are personally liable for business debts. Limited partners invest cash and may not participate in management. Limited partners have limited liability. A certification of limited partnership must be filed with the Florida Department of State. The partnership name must identify entity as a limited partnership for example, “Limited or LTD Page 32

Question 7

Real Estate Brokerage limited partnerships

Answer 7

The limited partnership must register wit the DBPR under the limited partnership name. The limited partnership registration must be renewed every two years. Limited partners are not required to register wit the DBPR. Page 32.

Question 8

Limited Liability Partnership at a Glance

Answer 8

Limited Liability for all. File limited liability partnership with the Florida Department of State. Name must identify entity as a limited liability partnership for example. Limited Liability. The broker must register: brokerage lip wit the debar, all general partners wit the DBPR, trade name wit the DBPR and the Florida Department of State. page 33.

Question 9

What is a Corporation?

Answer 9

A corporation is an artificial person or legal entity created by law and consists of one or more persons. It is considered to have an existence of its own, separate from the individual. Page 33

Question 10

Corporation at a Glance

Answer 10

Limited Liability for All. Files articles of incorporation with the Florida Department of State. The corporation name must identify the entity as a corporation. Such as Parrot head realty Corp.. A corporation exists perpetually. Shares of stock represent ownership. An annual report must be filed wit the Division of Corporations, Florida Department of State. Page 34

Question 11

Real Estate Brokerage Corporations

Answer 11

At Least one of the officers or directors must be licensed as an active broker (the principal broker or qualifying broker). Sales associates and broker associates may be shareholders of a real estate brokerage corporation. Page 35

Question 12

What do you need to qualify for S Corp?

Answer 12

To Qualify for S corporation status, a business must be a domestic corporation organized in the United States or originated under federal or state law. An S-Corp can issue only 1 type of stock. Page 36

Question 13

Other Business Forms that May not Register

Answer 13

1. Corporation Sole: A corporation sole is an ecclesiastical or a church organization. 2. Joint Venture: A joint venture is a temporary form of business arraignment often encountered in the real estate business. 3. Business Trust: is a form of business entity that may be crated to engage in transactions involving its own real property. 4. Associations: Unincorporated associations are generally recognized as groups of people associated for some noncommercial common purpose. Page 38.

Question 14

Trade Name

Answer 14

The Fictitious Name Act defines fictitious name as any name under which a person transacts business in the state of Florida, other that the person’s legal name. Page 39

Question 15

Fictitious names

Answer 15

A fictitious name registered under the Fictitious Name Act may not contain the work Corporation, Incorporated, or Company, or the abbreviations Corp. Inc., or CO. unless the person or business for which the name is registered is incorporated or has obtained a certificate of authority to transact business in Florida pursuant to Chapter 607 or 617 Page 39.

Question 16

The Real Estate Office

Answer 16

All Active Florida real estate brokers are required to have an office and to register the office wit the DBR. A brokers office must consist of at least one enclosed room in a building of stationary construction that will provide privacy to conduct negotiations and closing of real estate transactions. Page 40

Question 17

Branch Offices

Answer 17

If a broker desires to conduct business from additional locations, the broker must register each additional location as a branch office and pay the appropriate registration fees. Thereafter, the broker must renew branch office registrations every tow years. Page 41.

Question 18

Branch Offices

Answer 18

Registrations issued to branch offices are not transferable.

Question 19

Entrance Signs

Answer 19

Active real estate brokers must display an official sign on either the exterior or interior of the entrance to their principal office and all branch offices. The sign must be easily observed and read by anyone entering the office. The sign must contain the following information: Trade name (if one is used), Broker’s Name, the Words, “Licensed Real Estate Broker, or Lic. (abreved). Page 42

Question 20

Entrance Signs: Partnerships, Corporations, LLC, or LLP

Answer 20

Sign must contain the following information: Name of the firm or Corporation (or trade name), Name of at least one active broker, the words “Licensed Real Estate Broker” or Lic. Real Estate Broker”. Page 42.

Question 21

American with Disabilities Act (ADA)

Answer 21

Whether leasing or purchasing space, brokers must comply with federal and state laws regarding accessibility. Under Title III of the American with Disabilities Act (ADA) laces of public accommodations and commercial facilities must be accessible to persons with physical or mental disabilities. Page 43.

Question 22

Advertising

Answer 22

Advertising is considered under Florida law to be a broker activity. Page 44.

Question 23

Blind advertisement

Answer 23

Advertisements that fail to disclose the license name of the brokerage firm. Page 44

Question 24

Internet Sites

Answer 24

When advertising on an Internet site, the name of the brokerage firm must appear adjacent to or immediately above or below the point of contact information. Point of Contact info refers to any means by which to contact the brokerage firm or individual licensee, including mailing address, street address, email, telephone, fax. page 45

Question 25

Fair Housing Act*

Answer 25

Under the Fair Housing Act, the protected classes are race, color, religion, sex, handicap, familial status, and national origin. Page 46, be familiar with each.

Question 26

Housing for older persons

Answer 26

Certain housing for older persons is exempt from the familial status protection under the Fair Housing Act, provided that: All units are occupied by persons 62 years of age or older; or, At least 80 percent of the units are occupied by one or more persons 55 years of age or older and housing policies are published and followed that demonstrate an intent to be housing for persons 55 and older. page 47.

Question 27

Fair Housing Poster

Answer 27

The fair Housing Act requires the use of an equal opportunity poster. The poster features the equal housing logo and a statement pledging adherence to Fair Housing Act. The poster must be displayed at real estate brokerage offices and other businesses involved in housing. Page 47.

Question 28

Advertising

Answer 28

All advertisements of real property must be accurate representations of the property. Truth advertising is serious business. Page 47.

Question 29

*Rental Information Lists

Answer 29

Advertising rental property information or lists that are not current or are materially inaccurate is illegal. Any person who violates the requirements outlined above is guilty of a misdemeanor of the first degree, is subject to a fine of up to $1,000 and or imprisonment of up to one year, and is subject to license suspension or revocation. Page 49.

Question 30

Telephone Solicitation

Answer 30

The federal law covers both interstate and intrastate telemarketing calls. Violators of the Federal law may be fined up to $11,000 for each illegal call. Violators of Florida’s Telemarketing Act my be fined $10,000 per call.

Question 31

Telephone Solicitation

Answer 31

The FCC recently ruled that under the federal law, real estate licensee may not call for sale by owners and homeowners with expired listings to solicit for listings if the owners name are listed on the National Do Not Call Registry, even if the homeowners # appears on a yard sign or newspaper. page 50.

Question 32

Fax Solicitations

Answer 32

FCC rules mandate that it is unlawful to send unsolicited advertisements to residential or business fax machine without the recipients prior express invitations or permission. Read 4 requirements on Page 51.