Chapter 5 Flashcards
Florida real estate brokers are required to have an office registered with who
DBPR
Florida law requires a brokers accounting books, records, and real estate transactions files are kept where?
The realtors office
True or false? Sales associates are allowed to open offices of their own.
False
True or false? If a broker decides to close one branch office and open a new branch office at a different location, the registration of the closed office may not be transferred to the new location.
True.
True or false? A broker may not Reopen a branch office in the same location during the same license period By requesting a re-issue of the branch office license without paying an additional fee.
False
A brokerage office must be at least ______ enclosed rooms that will provide privacy
One
True or false? a branch office does not need an official sign on the interior or exterior of the entrance, only the principal office.
False,
Real Estate brokers sign must contain what following information?
Trade name(if used), brokers name, and The words, “licensed real estate broker” .
True or false? The sales associates and brokers associates names are required on the entrance sign
False, only the brokers name
A ______ or observable space must separate the brokers name and the associates
Line
If a the brokerage entity is a partnership, corporation, LLC, or limited liability partnership, the sign must contain the following information.
Name of the firm, corporation, or trade name
Name of at least 1 active broker
The words, “licensed real estate broker”
Anyone who advertises or claims to be providing real estate service is acting as a _______ _________ _________.
real estate Broker
Advertising is considered a ______ activity
Broker
If sales associates create promotional material, they must include the
_________ _________ of the brokerage firm
Licensed name
Team advertising is also known as
Group advertising
Team advertising is the _____ or ______ used by one or more licensees who represent themselves to the public as a team or group
Name or logo
Truth or false? The team name in an ad may be no larger than the name of the registered broker.
True
Truth or false? If a licensee puts their name on an ad, their last name must be included as registered with the DBPR
True
Advertisement that fail to disclose the license name of the brokerage firm is called a
Blind advertisement
False advertising is a misdemeanor of the ______ degree
Second
When advertising on an internet site, the name of the brokerage firm must be _______ to or immediately ________ or ______ the point of contact information.
Adjacent, above, below
What act established the Do not call registry and what commission maintains the registry
The Telephone Consumer Protection Act(TCPA), The Federal Trade Commission
Florida telemarketing law is administered through the_______
and maintains a no sale solicitation calls registry for consumers who do not wish to receive telephone solicitation calls on the residential and mobile phones.
Department of agriculture and consumer services(FDACS)
Exceptions for federal dnc registry are
A sales associate representing a potential buyer may call the FSBO seller only if they have an interested buyer in property, A sales associate may cantact individuals with whom they had an established relationship up to 18 months, sales associate may contact a customer for 3 months after business inquiry or application.
Telephone solicitation calls are restricted to the hours of
8am and 9pm
Earnest money deposits are also called
Good faith deposits or binder deposits
Define escrow account
An account for the deposit of money a disinterested third party holds for others, hence the term Trust Fund
Brokers may maintain their escrow accounts in what 3 ways
A Florida commercial bank, credit union, or saving association
A broker who does not have an escrow account may do what 2 things with escrow funds?
Choose to have a Florida-based title company with trust peers to maintain the escrow funds, or alternatively, if designated in the sales contract, a Florida attorney may escrow the funds.
To be CAN-SPAM Act compliant when sending email messages, the sender must do the fallowing
Include a valid physical address in every email, provide clear and obvious way to opt out of every email and honor the unsubscribe request within 10 business days, use clear wording, (From, To, and Reply To) that accurately reflects the person or business sending the message as well as the domain name and email address
All fax’s must include
Date and time fax sent, Registered name of the company sending the fax, Phone number of the company sending the fax, or fax machine phone number
Explain the time frame for depositing escrow funds.
An associate who receives a binder deposit from a buyer, or a rental deposit from a tenant, must deliver the funds to their broker/employer by the end of the next business day. The broker than has until the end of the 3rd business day from the the date the funds were received.
Define immediately in administrative rule
No later than the end of the third business day
If an escrow check is made out to the associate directly the best action is to do what? And if this is not practical?
The best action is to ask the buyer to write a new check payable to the brokers escrow account. Otherwise, immediately endorse the check and include words such as, “For Deposit Only to the (name of the escrow account)” and turn it over to the broker
True or False? The seller approval must be optioned before accepting a posted check
True
True or false? A broker will not be held responsible for the non payment of an escrow check, provided the broker timely deposits the check into an escrow account and the brokers own negligence did not cause the check not to be honored
True
True or false? frec requires brokers to be a signatory on all their brokerage escrow accounts
True
True or false? Escrow accounts must be properly reconciled each month, and the broker must review, sign, and date the monthly bank reconciliation.
True
A brokers escrow account may be an, ________ _______ or non _______ ________ account
Interest bearing or non interest bearing
True or false? If a brokers escrow account is interest bearing, the broker does not need to get written consent from all parties before placing the funds in this account
False, the broker must get written consent from all parties.
True or false? A broker must not need Aggreeance from all parties to receive interest from an escrow account
False, all parties must give written permission for a broker to receive interest from an interest bearing escrow account.
True or false? All trust funds must be held in an escrow account until the transaction is closed, and a violation has occurred immediately once funds have been removed for personal or business funds even if they intend to pay the money back before the transaction is closed.
True
Conversion is the unauthorized use of another persons _______ or ________ for ones own use
Funds or property
Define commingle
When you mix the money or other personal property of a buyer or seller, or a tenant or landlord, with the brokers own money or property. As well as to combine escrow money with the brokers personal or business funds except those funds allowed by law to maintain the escrow account
A licensee who fails to deliver any personal property, such as money, legal documents, or real estate commission to a person entitled to receive can be disciplined for___________ __ __________ __ _______
Failure to account or deliver
Commission rules allow a broker to have up to _____ dollars personal money or business operation funds in an escrow account for saws transactions, as well as _________ dollars of their own money in an escrow account for property management
$1000, $5000
True or false? Florida law mandates separate sales escrow accounts and property management escrows accounts
False, law does not mandate this
If a broker Maintain sales escrow funds and property management escrow funds in a single escrow account, the amount of personal or brokerage funds in the account must not exceed how many dollars?
$5000
Brokers must keep business records, at least _ years from the date of receipt of money, funds, deposits, or checks entrusted to broker
5 years
If a broker does not have an escrow account the broker must place escrow funds with a ______ ________ or an _________ who will serve as an escrow agent
Title company, attorney
Under what chapter is a broker required to deliver the funds to the escrow agent in the same time frame for depositing funds into the brokers own escrow account?
Chapter 475 f.s.
A title company’s _________, ___________, and _________ must be indicated on a sale contract when the title company holds the escrow account
Name, address, and telephone number
Buyers broker must make a written request within __ business days after the deposit is due to the title company or attorney to provide written verification of the deposit or that a deposit wasn’t received
10
Within __ business days after the request for written verification was sent, buyers broker must provide sellers broker either a copy of verification or written notice that no verification was received at all
10
A broker must be a ________ on an escrow account
Signatory
Brokers must _______, _________, and ________ the monthly reconciliation statements.
Review, sign, and date
Brokers must maintain records of real estate transactions regardless of whether escrow funds were pledged or who was the escrow agent for __ years
5
Real estate license law governs only ________ escrow account, giving the FREC no jurisdiction over title companies or attorneys
Broker’s
True or false? If the broker is not the escrow agent and the transaction fails to close and both the buyer and seller claim the escrow funds, FREC will issue an escrow disbursement order
False, FREC will not issue the EDO
When a broker holds escrow funds in the brokers trust account in a real estate transaction, the deposit belongs to the _________, until another party _______ the offer.
Depositor, accepts
Brokers must notify FREC in writing within __ business days of receiving conflicting demands or having a good faith doubt
15
Brokers must institute one of the settlement procedures within __ business days of receiving conflicting demands or having a good faith doubt
30
If a broker requests an EDO and the escrow dispute is either settled or going to court before the EDO is issued, the broker must notify FREC within __ business days that the dispute has been settled or litigation is being commenced.
10
Define conflicting demands
When the buyer and seller both make demands regarding the disbursement of escrow funds that are inconsistent with each other’s and can not be resolved
What are the 4 settlement procedures when their are conflicting demands on the disbursement of escrow funds
Mediation
Arbitration
Litigation
EDO
Define the 4 settlement procedures for an escrow dispute
Mediation- an informal, non adversarial intended to reach a negotiated settlement,
Arbitration- a disinterested 3rd party makes a decision on the disbursement of funds. Prior written consent must be given and all parties must agree to abide by the terms
Litigation- when neither party can agree, the disputing party may file a lawsuit
EDO- FREC determination of who is entitled to the funds
What are the 2 court procedures for litigation when disbursing escrow funds and their definition
Interpleader- If the broker does not have any claim to the disputed escrow funds, the funds may be deposited in the court registry, dismissing the broker from the case. Each party than argues their case in court
Declaratory judgement- when a broker believes they are entitled to some of the funds, the broker will file a declaratory judgement where the judge declares each parties rights to the funds
An EDO procedure is only available if the disputed funds do not exceed ____ dollars and the funds are held in an _______ ________ ________
50000, brokerage escrow account
What are the 3 notice and settlement procedures exemptions
HUD owned property must comply with specific HUD contracts
If a buyer of a residential condo unit timely delivers to a licensee in writing of the buyers intent to cancel the contract, broker may return escrow funds to buyer (condominium act)
If a buyer of real property in good faith fails to satisfy the terms specified in the financing clause in a sale and purchase contract, the broker may return the funds to the purchaser
Situations that may constitute good faith doubt by broker include
Transaction closing date has passed, and broker has not received instructions from both parties on how to disburse the funds
One or more parties has expressed the intention not to close before closing date has passed, and the broker has not received instruction from both parties as how to disburse the funds
One party in a failed transaction does not respond to an inquiry about escrow disbursement
When a party to a failed transaction does not respond to an inquiry about how to disburse escrow funds, a broker may
Send a certified notice letter, return receipt requested, to the non responding party that a demand on the escrow funds have been made, and failure to respond by a designated date will be regarded as authority for the broker to release the funds to a demanding party.
True or false? If a broker receives a commission before a transaction has closed, the broker may us the money from the commission before the transaction is closed.
False
True or false? A real estate licensee may receive an advanced fee for the listing of a time share unit
False
True or false? Anyone who advertises rental property information in any manner is acting as a broker or broker representatives and must abide by the rules and laws that are associated with license occupations
True
Any broker or associate who furnishes a rental information list to a prospective tenant for a fee must provide them with a _______ that contains provision for repayment under specified conditions.
Receipt
A rental information list receipt must state that a prospective tenant that does not obtain a rental may be repaid __ % of the fee paid if requested within __ days
75% 30
If rental information provided to a tenant is not current or otherwise inaccurate a prospective is entitled to a __ % refund
100%
Any demand for a return of any amount of a fee from a rental information list must be paid within __ days
30
Advertising a rental property information or lists that are not current or are materially inaccurate is a __ degree misdemeanor
1st
True or false? Sales associates may operate independently and without the supervision of a broker
False, sales associates must operate under a broker
Any compensation paid to an associate for real estate services must be paid to the associate directly from the associates ____ and not the ____or _____.
Employer,
Buyer or seller
True or false? An associate may share a portion of commission with a buyer as long as the rebate is disclosed to the seller and the buyers lender
True
Anti trust laws protect _____
Competition
The _______________, ______________, and _______________ preserve competition and ensuring against restraint of trade
Sherman antitrust act, Clayton antitrust act, and Federal trade commission
Define price fixing
When brokers conspire to fix commission instead of it being determined by the open market.
Listing agreements and sales commission belong to the __________, therefor, only a _______ can initiate an action for unpaid commission.
Broker, broker
For residential property, A broker may place a _____ on real property for nonpayment of commission only if authorized in the listing agreement, buyer representation agreement or _________
Lien, sale contract
(When failed to receive commission) When a broker is unable to place a lien on real property the broker must do what?
File a lawsuit and receive a judgement for payment.
______ is authorized to suspend or revoke a real estate license for the unauthorized placement of a lis Pendens or lien or other instrument that effects a the title of real property
FREC
True or false? A broker may not place on public record false or unauthorized information that effects the title to real property
True
The commercial real estate sales commission lien act apples only to _______ real estate and gives a broker ______ rights for non payment of commission
Commercial, lien
Define commercial real estate
Any real estate that is NOT defined as residential.
A lien on commercial property is against the owners ____ _________, and unlike a residential property, does not attach to the real property
Net proceeds, (personal property)
True or false? An owner/seller can wave off a brokers lien rights for commercial real estate if it was disclosed in the brokerage agreement.
False
The commercial real estate leasing commission lean act gives a broker ____ rights for earned commission associated with a brokerage agreement to lease commercial real estate
Lien,
Define kickback (rebate)
An unearned fee paid to a licensee associated with a real estate transaction for non real estate services.
List 4 important facts regarding kickbacks
The parties too a transaction must be fully informed of a kickback.
The kickback must not be prohibited by other laws.
It is unlawful to share commission with an unlicensed person for a real estate transaction with anyone other than the buyer or seller.
It is unlawful for a licensee to pay an unlicensed person for performing rea estate.
List the Types of business entities that may register as real estate brokers
Corporation, general partnership, limited partnership, LLC, Limited liability partnership, sole proprietorship.
List the Types of business entity that may not register as a real estate brokerage
Corporation sole, business trust, joint ventures, Cooperative associations, Unincorporated associations.
All real estate brokerage must register with the ____
DBPR (department of business and professional regulations)
A person licensed as a sale associate or broker associate may not register as a
General Partner of a brokerage partnership, A member of a member managed real estate limited liability company, A member or a manager of a manager based real estate limited liability company, Or an officer or Director of a brokerage company.
Define sole proprietorship
A business owned by an individual, they are personally liable for their own actions and those actions of their employees,
True or false? sole proprietorship must register with the Florida DOS (department of state)
False
Define general partnership
An association of two or more people for the purpose of jointly conducted ting business. Equal share in profits and losses as well as unlimited personal liability.
All general partners are joint and severely liable for damages resulting from ________
Lawsuits
General partners are agents for one another. If one agent goes into an agreement with someone, the other agent is now ______ to the agreement
Bound
True or false? A general partnership contract must be in writing.
False, it can be in writing, oral, or implied by the actions of the parties
List the requirements for a brokerage general partnership
Partnership must register with the DBPR under partnership name.
At least one partner must be an active licensed real estate broker.
Partners who deal with the public and perform services of real estate must be licensed as active brokers.
Sales and brokers ASSOCIATES. May not be registered in a general brokerage partnership.
A limited partnership is created by a ________ instrument and is filed with the ________ ______. A limited partnership must have at least _____ limited and ______ general partners.
Written, Florida DOS, 1, 1
True or false? A limited partner has no managerial control and only make an investment of cash or property but not of services.
True
A Limited partner is an _______ only
Investor
True or false? limited partners are not responsible for debts associated with the partnership unless their name appears on the partnership name, OR they take part in the management of the company
True
Requirements regarding real estate limited partnership include
Limited partnership name must be registered with the DBPR.
General partners who deal with the public and perform real estate must be licensed as active brokers.
At least one general partner must be licensed as an active broker.
All other general partners name and address must be registered with the DBPR.
Sales and brokers associates may only be limited partners in a limited partnership, and not general partners
Limited partners within the partnership do not need to register with the DBPR.
True or false? limited partners in a limited partnership need to register with the DBPR
False
True or false? a LLP (limited liability partnership) partner is only responsible for debts the partner agreed to, any negligence, malpractice, wrong doing, omissions, or errors committed by that partner.
False, the partner is also responsible for any negligence, malpractice, wrong doing, omissions, or errors committed by someone the partner was in direct supervision of.
Define a corporation.
A legal entity created by law and consists of one or more person.
How is a corporation formed?
By filing articles of an incorporation with the Florida DOS
True or false? A corporation has the legal capacity to make contracts and incur debts when an officer signs contracts on the corporation behalf
True
What are the requirements regarding real estate brokerage corporations.
The corporation must register with the DBPR under the corporation name by completing the brokerage corporation application.
At least one officer or Director must be registered as an active broker.
Officers and directors who will deal with the public and perform acts of real estate must be license as active
brokers.
All officers and directors who are not licensed must register their names with a DBPR.
Interactive brokers an unlicensed persons may perform managerial task for the brokerage corporation that do not involve real estate.
A sales associate and a brokers associate may not be officer or directors for a brokerage corporation.
A sales and a brokers associate may be shareholders in a brokerage corporation.
True or false? An inactive broker and an unlicensed person may be an officer or director of a brokerage
True, as long as they do not deal with the public or perform real estate activities.
True or false? Chapter 475 makes a distinction between profit and non-profit corporations
False, it does not make a distinction.
Define an Llc
Limited liability company, A business structure allowed by state statute, offers the best features of a corporation and partnership. Provides owners protection from personal liability for debts, income is taxed only once,
Llc’s are formed in Florida chapter _____
605 F.S.
A brokerage entity must notify ______ in the case it’s only active broker dies, resigns, or otherwise is unable to remain in the position as active broker. The vacancy must be filled within ___ calendar days with either a permanent or temporary broker.
Frec, 14
True or false? Business that is currently in progress can continue during the 14 day period that a new or temporary broker is being selected.
True.
No more than ___ days after the DBPR registration of a temporary broker, The brokerage must file with the DBPR proof that a new permanent Broker is properly registered with the ______ ___.
60, Florida DOS
True or false? If a brokerage entity has more than one active broker and one broker is unable to continue being listed as an active broker, the brokerage registration and licenses of all associates are put on a 14 day hold until a new broker is appointed?
False
Define ostensible partnership and what it is considered
Not intentionally created rather the actions of two or more people give the appearance that a partnership exists. Giving the appearance a partnership exists when it doesn’t is considered fraudulent and licensees who participate may have their license suspended.
Define a corporation sole
A nonprofit entity that is designed to ensure continuity of ownership of property dedicated to the benefit of a legitimate religious organization
Define a joint venture
A temporary form of business arrangement normally used when 2 or more people combine their efforts for the purpose of completing a single or fixed number of business transactions without any written agreement needed.
Explain a business trust
Any number of persons make an investment at a specified price per unit. The money is then used to buy sell or improve real estate. The title for real property acquired through the trust are taken in the name of a trustee/ group of trustees.
True or false? Any person who buys or sells real estate for a trust and is compensated on a transactional basis must be licensed.
True
Explain a cooperative association
Permitted to conduct a commercial business and to convey buy or sell its own property. Cannot register with the DBPR as a real estate brokerage.
Explain unincorporated association
A group of people associated for some non commercial common purpose. Not incorporated and are not regarded as partners. They can incur liabilities and Members are liable for debts to creditors such as in a partnership.
Define a trade name
A business name other than the legal name of a person or business entity.
True or false? A single broker or brokerage entity who desires to use a trade name must register under the trade name with the DBPR, and may only register a single trade name that has never been used.
True
Sales and brokers associates may register with a trade name under the DBPR
False, they must register with their legal name.
Individuals licensed by the DBPR are exempt through the ______ ______ ______ from registering a fictitious name with the DOS
Fictitious name act
True or false? Brokerage corporations, limited partners, LLPs and LLCs that have registered the business entity with the DOS and are in good standing, are considered to have met the requirements for a fictitious name.
True, Provided they do not transact business under any other name.
True or false? If an Owners first and last name are included in the business name the business is exempt I’m filing a fictitious name.
True.
Florida statute 622 designates the term professional association to mean a ________________, _____________, _______________
Professional corporation (pa), LLC, or a professional LLC (PLLC)
Florida law requires an associates professional association be made up of __ individual(s)
1
Weather or not a personal assistant needs to be licensed depends on the ____ performed by the assistant
Tasks
A sales associate may not compensate an assistant for activities that require a _________.
License
