Chapter 5

Question 1

Can you transfer the registration to a principal brokerage office?

Answer 1

yes, registration can be moved without paying a new registration fee during the covered registration period

Question 2

Can a branch office registration be moved?

Answer 2

No, a branch office needs to be closed and a new one opened with a new fee. If you move to the original location during the registration period, no new fee needs to be paid for that location

Question 3

Does a brokerage office need to contain a sign?

Answer 3

Yes, a sign is required to be on the outside or inside of the building

Question 4

What are requirements of an ad?

Answer 4

Must include the name of the brokerage firm

Question 5

if a sales associate includes their name in an ad, what are the requirements for this?

Answer 5

Name must be written exactly as it is registered with the commission. If you don’t list the brokerage you may only be charged with acting as a broker.

Question 6

What is a blind ad?

Answer 6

It is an illegal ad that does not contain the brokerage name or in which it isn’t clear that the ad is for a real estate broker

Question 7

What does a licensee need to do when they are selling or buying property for themselves?

Answer 7

They must disclose they are sales associate/broker prior to entering serious negotiations

Question 8

What is an earnest money deposit?

Answer 8

Money given by the buyer to show in good faith that they plan on purchasing the home. It usually accompanies an offer.
If the offer becomes a contract, this money serves as a protection to the seller in case the buyer backs down

Question 9

What happens to an earnest money deposit if no contract results from their offer?

Answer 9

The deposit is returned to the buyer

Question 10

Can a sales associate accept a post-dated check?

Answer 10

Yes, but the seller must approve of it.

Question 11

What must be in the contract when the licensee receives a deposit from the buyer?

Answer 11

Licensee must indicate in the contract the name, address, and telephone number of the title company or attorney where the deposit is

Question 12

What does the licensee have to do after the check has been deposited in escrow?

Answer 12

Within 10 business days of the deposit being due in the contract, they must contact the title company to request written verification that they received the deposit.

Question 13

Where can the money be held in escrow?

Answer 13

Must be in Florida
Can be:
in a commercial bank
in a credit union
with a title company
in a savings and loan association

Question 14

Where can you not place money held in escrow?

Answer 14

Stock or bonds
personal account where funds would commingle

Question 15

How much of their own money can a broker place in an account that is to be used exclusively for escrow?

Answer 15

up to $1000 for a sales account
up to $5000 for a property management account

This is money that was deposited in order to open the account and for account maintenance fees

Question 16

When does a sales associate have to give their broker a deposit check they received from a buyer?

Answer 16

By the end of the next business day

Question 17

When does a broker have to place the earnest money into an escrow account?

Answer 17

“Immediately” meaning 3 business days from the initial receipt of the check

Question 18

When can money from escrow be disbursed?

Answer 18

When both the buyer and the seller agree to the disbursement

Question 19

What must a broker do when they receive conflicting demands for the escrowed funds?

Answer 19

The broker must give written notification to FREC within 15 business days of the date of the last party’s demand

Question 20

What are the methods in which to solve a dispute over escrow fund disbursement?

Answer 20

Mediation - 3rd party assists in reaching an agreement
Arbitration - 3rd party makes final decision
Litigation - goes to court

Question 21

What takes place for arbitration?

Answer 21

Both parties agree in advance that they will use an arbitrator in case a dispute arises. After a hearing where both parties can present their side, the arbitrator decides who gets the funds.

Question 22

What happens when an escrow dispute goes to court and the sales associate does not want to claim any rights to the deposit?

Answer 22

They file a bill of interpleader

Question 23

If the contract is subject to financing, and the buyer cannot secure financing, what happens to the escrow money?

Answer 23

Funds go back to the buyer, notification does not need to be made to FREC

Question 24

When can a buyer get their money back from a contract without notifying FREC? (clauses to get out of a contract)

Answer 24

when they were unable to secure financing
When the house did not appraise at the purchase price

Question 25

When can a broker receive a commission?

Answer 25

When they perform the services for which they were hired

Question 26

What happens when a broker is hired to find a purchaser?

Answer 26

Commission must be paid when they find a buyer that is ready, willing, and able to make the purchase, and meets all of the seller requirements. Regardless if the sale falls through.

Question 27

When can a broker receive a kickback?

Answer 27

When they perform a service of which they have a license for (if one is needed), and discloses the fee to all interested parties and receives consent

When the referral is unrelated to real estate, such as referring a furniture salesperson

Question 28

Can a Florida licensee pay a referral fee to a sales associate from another state?

Answer 28

Yes, but they must be licensed and registered in their state/country, and they may not participate in the real estate procedures/transactions

Question 29

Can a licensee pay a fee to someone who is unlicensed for referral?

Answer 29

Nothing of value can be given, unless they are a party to the transaction. Then you can give a fee as long as the other involved party is informed of it.

Question 30

How can the sales associate get paid?

Answer 30

Commission amount is agreed upon with the broker. The closing agent can disburse a commission check directly to the sales associate with the written permission of the broker.

Question 31

Who can a sales associate sue for not receiving their commission?

Answer 31

Only their employer (broker)

Question 32

What do have to do when you change brokerage company?

Answer 32

Notify FREC within 10 days

Question 33

What do you have to do when you move out of Florida?

Answer 33

Notify FREC within 60 days. If you plan to remain licensed in Florida, Florida non-resident requirements must still be followed

Question 34

What do you have to do when you change your address?

Answer 34

Notify DBPR within 10 days

Question 35

What is a sole proprietor?

Answer 35

a broker whom is registered by themselves

Question 36

What is a general partnership?

Answer 36

Business in which 2 or more people agree to share profits/losses of a business
This partnership can be in oral or in writing
They do not need to register with the state (but they may if they choose to)

Question 37

Real estate brokerage partnership

Answer 37

Must register with the DBPR
Must have at least 1 licensed broker
Any partner providing real estate services must have an active broker’s license

Question 38

What is a limited partnership?

Answer 38

Partnership consisting of at least 1 general partner and at least 1 limited partner. Only one needs to be licensed.

Question 39

What is a joint venture?

Answer 39

Temporary partnership that involves a predetermined number of transactions
Cannot be a real estate brokerage business, as they cannot provide real estate services jointly

Question 40

How to recognize when a corporation has registered as a corporation for profit

Answer 40

it contains “inc” “corp” or “Co” in the name
Also: incorporated, corporation, or company

Question 41

What is the difference between a real estate corporation and a real estate brokerage corporation?

Answer 41

Real estate corporation only provides real estates services internally, does not do transactions for the public

Question 42

Can a coop register as a a real estate brokerage corporation?

Answer 42

No, they only buy and sell real estate in their own building

Question 43

What is a corporation sole?

Answer 43

Religious organization.
Property is not taken in the corporation’s name

Question 44

Which organizations cannot register as a brokerage corporation?

Answer 44

Joint Venture
Co-op
Unincorporated Association (HOA)
Business Trust
Corporation Sole