chapter 3: law

Question 1

define: Accredited college

Answer 1

A college, university or institute of higher learning rec-
ognized by the Council for Higher Education Accreditation or the United States
Secretary of Education.

Question 2

define: Act

Answer 2

The Real Estate Licensing and Registration Act

Question 3

define: Agency relationship

Answer 3

A fiduciary relationship between a broker or licensees employed by a broker and a consumer who becomes a principal

Question 4

whats an Associate broker?

Answer 4

An individual broker who is employed by another broker.

Question 5

what is a “Branch office”?

Answer 5

Any fixed location in this Commonwealth, other than the main office, maintained by a broker or cemetery broker, devoted to the transaction of real estate business.

Question 6

define: Broker

Answer 6

An individual or entity holding either a standard or reciprocal license, that, for another and for a fee, commission or other valuable consideration, does one or more of the following:
(i) Negotiates with or aids a person in locating or obtaining for purchase, lease or acquisition of interest in real estate.
(ii) Negotiates the listing, sale, purchase, exchange, lease, time share and similarly designated interests, financing or option for real estate.
(iii) Manages real estate.
(iv) Represents himself or itself as a real estate consultant, counsellor or house finder.
(v) Undertakes to promote the sale, exchange, purchase or rental of real estate. This subparagraph does not apply to an individual or entity whose main business is that of advertising, promotion or public relations.
(vi) Undertakes to perform a comparative market analysis.
(vii) Attempts to perform one of the actions listed in subparagraphs (i)—(vi).

Question 7

What is a “Broker of record”?

Answer 7

The individual broker responsible for the real estate transactions of a partnership, association or corporation that holds a broker’s license.

Question 8

What is a “Builder-owner salesperson”?

Answer 8

An individual holding either a standard or reciprocal license, who is a full-time employee of a builder-owner of single-and multi-family dwellings located in this Commonwealth and who is authorized, for and on behalf of, the builder-owner, to do one or more of the following:
(i) List for sale, sell or offer for sale real estate of the builder-owner.
(ii) Negotiate the sale or exchange of real estate of the builder-owner.
(iii) Lease or rent, or offer to lease, rent or place for rent, real estate of the builder-owner.
(iv) Collect or offer, or attempt to collect, rent for real estate of the builder-owner.

Question 9

define: “Bureau”

Answer 9

The Bureau of Professional and Occupational Affairs of the Department. (BPOA)

Question 10

what is a “Buyer agent”?

Answer 10

A licensee who enters into an agency relationship with a buyer/tenant.

Question 11

what is a “Campground membership”?

Answer 11

An interest, other than in fee simple or by lease, which gives the purchaser the right to use a unit of real property for the purpose of locating a recreational vehicle, trailer, tent, tent trailer, pickup camper or other similar device on a periodic basis under a membership contract allocating use and occupancy rights between other similar users.

Question 12

define “Campground membership salesperson”

Answer 12

An individual holding either a standard or reciprocal license, who, either as an employee or an independent contractor, sells or offers to sell campground memberships under the active supervision of a broker. A licensed broker, salesperson or time-share salesperson does not need to possess a campground membership salesperson’s license to sell campground memberships.

Question 13

what is the legal definition of “Cemetery”?

Answer 13

(i) A place for the disposal or burial of deceased human beings, by cremation or in a grave, mausoleum, vault, columbarium or other receptacle.
(ii) The term does not include a private family cemetery.

Question 14

define “Cemetery associate broker”

Answer 14

An individual cemetery broker employed by
another cemetery broker or by a broker.

Question 15

define “Cemetery broker”

Answer 15

An individual or entity holding either a standard or reciprocal license, that is engaged as, or carrying on the business or acting in the capacity of, a broker exclusively within the limited field or branch of business that applies to cemetery lots, plots and mausoleum spaces or openings.

Question 16

what is a “cemetery company”?

Answer 16

An individual or entity that offers or sells to the public
the ownership, or the right to use, a cemetery lot.

Question 17

define “Cemetery salesperson”

Answer 17

An individual holding either a standard or reciprocal
license, employed by a broker or cemetery broker exclusively to perform the duties of a cemetery broker.

Question 18

in legal terms, what does the word “Commission” mean?

Answer 18

The State Real Estate Commission.

Question 19

what is a “Comparative market analysis”?

Answer 19

A written analysis, opinion or conclusion by a contracted buyer’s agent, transactional licensee or an actual or potential seller’s agent relating to the probable sale price of a specified piece of real estate
in an identified real estate market at a specified time, offered either for the purpose of determining the asking/offering price for the property by a specific
actual or potential consumer or for the purpose of securing a listing agreement with a seller.

Question 20

what is a “Designated agent”?

Answer 20

One or more licensees designated by the employing broker, with the consent of the principal, to act exclusively as the agent or agents for the principal to the exclusion of all other licensees within the broker’s employ.

Question 21

what is a “Licensee”?

Answer 21

An individual or entity holding either a standard or reciprocal license, under the act.

Question 22

what is a “Listing broker”?

Answer 22

A broker who has entered into a written agreement with a seller/landlord to market property as a seller’s agent, dual agent or transaction licensee.

Question 23

define: “Manager of record”

Answer 23

The individual rental listing referral agent responsible
for the rental listing transactions of a partnership, association or corporation that holds a rental listing referral agent’s license.

Question 24

what is a “Nonexclusive buyer agency agreement”?

Answer 24

A nonexclusive agreement governed by a memorandum or contract wherein the buyer retains the right to employ multiple brokers to purchase or lease a property.

Question 25

what is an “Open listing agreement”?

Answer 25

A nonexclusive listing agreement governed by a
memorandum or contract wherein the seller retains the right to employ multiple brokers to sell or lease a property.

Question 26

define “Principal”.

Answer 26

A consumer who has entered into an agency relationship with a broker or another licensee employed by the broker.

Question 27

Define “Rental listing referral agent”.

Answer 27

(i) An individual or entity that owns or manages a business which collects rental information for the purpose of referring prospective tenants to
rental units or locations of rental units.
(ii) The term does not include an official or employee of a public housing authority that is created under State or Federal law.

Question 28

Define “Salesperson”

Answer 28

An individual holding either a standard or reciprocal license, who is employed by a broker to do one or more of the following:
(i) Sell or offer to sell real estate, or list real estate for sale.
(ii) Buy or offer to buy real estate.
(iii) Negotiate the purchase, sale or exchange of real estate.
(iv) Negotiate a loan on real estate.
(v) Lease or rent real estate, or offer to lease or rent real estate or to place real estate for rent.
(vi) Collect rent for the use of real estate, or offer or attempt to collect rent for the use of real estate.
(vii) Assist a broker in managing property.
(viii) Perform a comparative market analysis.

Question 29

what is a “Seller agent”?

Answer 29

A licensee who enters into an agency relationship with a seller/ landlord.

Question 30

what is a “Standard license”?

Answer 30

A license, other than a reciprocal license, issued to an individual or entity who has fulfilled the education/experience and examination requirements of the act.

Question 31

what is a “Subagent”?

Answer 31

A licensee, not in the employ of the listing broker, who acts or cooperates with the listing broker in selling property as a seller’s/landlord’s agent and is deemed to have an agency relationship with the seller.

Question 32

define the general law around “time share”.

Answer 32

The right, however evidenced or documented, to use or occupy one or more units on a periodic basis according to an arrangement allocating use and occupancy rights of that unit or those units between other similar users.

As used in this definition, the term ‘‘unit’’ is a building or portion thereof permanently affixed to real property and designed for separate occupancy or a campground membership or portion thereof designed for separate occupancy.

Question 33

what does “time share” not include?

Answer 33

a campground membership.

Question 34

what is a “Time-share salesperson”?

Answer 34

An individual who, either as an employee or an
independent contractor, sells or offers to sell time shares.

Question 35

what is a “Transaction licensee”?

Answer 35

A licensee who, without entering into an agency relationship with the consumer, provides communication or document preparation services or performs other acts listed in the definition of ‘‘broker’’ or ‘‘sales person.”

Question 36

what is a “Comparative Market Analysis”?

Answer 36

a written analysis, opinion or conclusion by contracted buyer’s agent, transactional licensee or an actual or potential seller’s agent relating to the probable sale price of a specified piece of property in an identified real estate market at a specified time, offered either for the purpose of determining the asking/ offering price for the property by a specific or potential consumer or for the purpose of securing a listing agreement with the seller.

Question 37

what are some other types of real estate licenses?

Answer 37

Associate Broker
Broker of record, Partner or Officer
Cemetery Broker
Cemetery Salesperson
Builder-owner Salesperson
Rental Listing Referral Agent
Campground Membership Salesperson
Time Share Salesperson
Out of state licenses

Question 38

Pennsylvania Real Estate Commission Act licensees are prohibited from:

Answer 38

Making any substantial misrepresentation or any misleading or untruthful advertising or using any trade name or insignia or membership in any real estate association of organization of which the licensee is not a member;

Failing to maintain proper escrow accounts, records of accounts, commingling money;

Failing to account (by a broker) for other people’s money in trust or escrow accounts, or of a salesperson for failing to deposit earnest money with his broker. Under no circumstances shall a broker permit any advance payment of funds belonging to others be deposited in the broker’s business or personal account to be commingled with any fund he may have on deposit;

Failing to keep accurate records of all money received including the date and whom he received the money, the date deposited, the dates of withdrawals, and other pertinent information concerning the transaction, and shall show clearly for whose account the money is deposited and to whom the money belongs;

Failing to account for money held by the broker for rental accounts;

Failing to preserve for three years following its consummation records relating to any real estate transaction;

Acting for more than one party in a transaction without the knowledge and consent in writing of all parties for whom he acts;

Placing a “for sale” sign or “for rent” sign on or advertising any property without the written consent of the owner or his authorized agent;

Failing to voluntarily furnish a copy of any listing, sale, lease, or other contract relevant to all signatories at the time of execution;

Failing to specify a definite termination date that is not subject to prior notice, on any listing contract.

Inducing any party to a contract, sale, or lease to break such contract for the purpose of substituting of a new contract, when the new contract is motivated by personal gain of the licensee.

Accepting a commission or any valuable consideration by a broker to anyone other than his licensed employees or another real estate broker for the performance of any acts specified in this Act.

Failing to disclose to an owner in writing his intention or true position if he directly or indirectly through a third party, purchased for himself or acquired or intends to acquire any interest in or any option to purchase property which has been listed with his officer to sell or lease.

Being convicted in a court of competent jurisdiction in this or any other state, or in Federal Court, of forgery, embezzlement, obtaining money under false pretenses, bribery, larceny, extortion or any similar offenses, or any felony or pleading guilty or Nolo contendere to any such offense or offenses.

Violating any rule or regulation made by the commission in the interest of the public and consistent with the provisions of the Act.

In the case of a broker licensee, failing to exercise adequate supervision over the activities of his licensed salespersons or associate brokers within the scope this Act.

Question 39

define “Commingling”

Answer 39

placing other people’s money into a personal or operating account of the broker.

Question 40

define “Nolo contendere”

Answer 40

a plea in a criminal case which says “I will not contest it.”

Question 41

what is “The Pennsylvania Real Estate Commission” empowered to uphold?

Answer 41

the Licensing and Registration Act.

The commission is empowered to create and enforce Rules and Regulations for their own use. When a person has been charged with a violation of the Act or the Professional and Vocational Standards, the commission is responsible for any actions that follow.

Question 42

what is an “Order to Show Cause”?

Answer 42

a prosecuting attorney initiates an action by preparing an Order to Show Cause. The Order to Show Cause sets forth the charges and directs the licensee (respondent) to file a written answer within 30 days.

(also called Show Cause Order) a court-ordered appearance to present to the court reasons why an order should not be confirmed. In this case, it applies to any penalties directed by the Pennsylvania Real Estate Commission.

Question 43

what is an “Adjudication and Order”?

Answer 43

a decision made from the hearing.

Question 44

what is an “Consent Agreement and Order”?

Answer 44

settlement.

the parties negotiate an agreed-upon penalty that they will believe is acceptable to the Commission. All Consent Agreement and Orders must be presented to and approved by the Commission in order to become final.

Question 45

what are the 4 disciplinary actions a licensed person may be issued by the PA Real Estate Commission?

Answer 45

Reprimand
suspension
revocation
fines

Question 46

what is “The Real Estate Recovery Act “?

Answer 46

Its purpose is to provide relief and compensation for any aggrieved person who has been the victim in a real estate transaction.

Question 47

define “Aggrieved person”

Answer 47

a person who has suffered loss or injury or whose rights were violated.

Question 48

what are the 5 instances that a person does NOT need a PA real estate license?

Answer 48

An owner selling or leasing his own property. Employees of the corporation or partnership are not excluded.
An employee of a public utility company performing utility work.
An attorney-in-fact working as an attorney and receives fees as an attorney, not as a real estate broker.
An attorney-in-fact, who is acting under the power of attorney, provided this is not used to avoid the law.
A trustee, administrator, executor, or guardian who is acting under the authority of a court order, will or trust instrument;

Question 49

define: “attorney-in-fact”:

Answer 49

working as an attorney and receives fees as an attorney, not as a real estate broker.

Question 50

define “A trustee, administrator, executor”:

Answer 50

a guardian who is acting under the authority of a court order, will or trust instrument