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Florida RE exam > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

What type of office must a broker open, maintain, and register with the DBPR?

A

A principal office

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2
Q

What are Branch Offices?

A

Additional offices from which the broker conducts business aside from the principal office

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3
Q

What are the requirements for a principal office?

A

Must be registered with the DBPR
Must consist of at least one enclosed room
Must be in a stationary building
Must be able to provide privacy

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4
Q

What are the requirements for a branch office?

A

Must be registered with the DBPR

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5
Q

Where can a sales associate be licensed?

A

Principal Office or Branch office

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6
Q

Can a Principal office be transferred?

A

Yes
Branch offices cannot, they must be closed and re-opened elsewhere

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7
Q

When can a closed branch office be reopened with a license reissue of the original license?

A

When it was closed and reopened within the 2 year timeframe of the original registration date

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8
Q

When can a broker have a principal or branch office in their home?

A

When it is not against zoning laws

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9
Q

How long does a broker have to maintain all books, records, and files for?

A

5 years

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10
Q

What are the requirements for the Office Sign at a principal or branch office?

A

Must be on or about the entrance (interior or exterior)
Must easily be observed and read upon entering
Must contain the broker’s name/trade name
Must contained the words Licensed (or Lic.) Real estate broker

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11
Q

What are the requirements for advertisements?

A

Must include broker’s registered name or trade name of the brokerage firm
Must be done under the supervision of the broker

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12
Q

If an ad contains a name of the sales associate, what is the requirement?

A

The ad must include the last name exactly as registered with the FREC

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13
Q

Who is responsible for advertising, regardless of who created it?

A

The broker

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14
Q

What is a blind ad?

A

Illegal ad that does not contain the registered name of the broker or an ad in which there is a doubt that the ad is that of a real estate broker

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15
Q

What does a licensee need to do when conducting a personal real estate transaction?

A

disclose it to the other party prior to serious negotiations

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16
Q

What is another name for the escrow deposit?

A

Deposit, good faith deposit, earnest money deposit

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17
Q

What happens to the deposit if no contract results?

A

It is returned to the buyer

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18
Q

What happens to the deposit when the buyer defaults on the contract?

A

Deposit is usually forfeited to the seller as liquidated damages

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19
Q

Does a deposit need to be cash?

A

no, it can be anything of value that can be converted into cash

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20
Q

Can you accept a postdated check as a deposit?

A

Yes, with Seller’s approval

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21
Q

What must a broker do when placing a deposit with a title company or attorney?

A

Broker must include the name, address, and phone number of the title company or attorney in the contract
Request a written verification of deposit receipt within 3 business days
Provide a copy or the written verification to the seller within 10 business days

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22
Q

Where can an escrow be placed?

A

Must be in Florida:
Commercial bank
Title company
Credit Union
Savings and loan association

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23
Q

Can deposit funds and broker’s personal funds be placed in the same account?

A

no, that would be commingling

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24
Q

What happens when escrow money is placed in an interest bearing account?

A

There needs to be written authorization from all interested parties agreeing to who shall receive the interest earned

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25
Q

When are you able to have personal funds mixed in with an escrow?

A

To open the account with a minimum and pay for management fees. $1000 for residential sales, $5000 for property management accounts

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26
Q

What is it called when a broker cannot or will not pay when they are required to?

A

Failure to Account

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27
Q

What is Conversion?

A

Fraudulent misuse, commingling, or failure to account for funds or property entrusted to a licensee

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28
Q

How long does a sales associate have to deliver a deposit to the broker?

A

by the end of the next business day

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29
Q

How long does a broker have to deposit funds in an escrow account after receiving it?

A

Immediately, meaning, 3 business days from the day the money was received from the buyer

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30
Q

What is escrow reconciliation?

A

Broker must prepare a monthly report comparing the escrow account (trust liability) with the bank statement and reconcile any differences

31
Q

Who own the escrow funds prior to entering a contract?

A

The buyer

32
Q

Who owns escrow funds after a contract has been signed but the transaction hasn’t closed?

A

buyer and seller jointly own the funds, with the broker, and the title company/attorney

33
Q

What is an escrow dispute?

A

Both the buyer and the seller demand that the escrow funds be released to them, but the broker has doubt as to which person is entitled to the disbursement

34
Q

What are the different type of procedures to settle an escrow dispute?

A

Mediation - talk it out
Arbitration - 3rd party makes final decision
Litigation - go to court
Escrow Disbursement Order - ask FREC to decide

35
Q

What are the time constraints for an Escrow dispute?

A

The broker has 15 business days to notify FREC from the day the second party demanded the funds. 30 business days to select a settlement procedure

36
Q

What is a double jeopardy situation in relation to an escrow disbursement order appeal?

A

When the broker disburses the funds according to the original Escrow Disbursement order from FREC, but the other party won the appeal. The broker pays the winning party and is then reimbursed from the Real Estate Recovery fund

37
Q

What is arbitration?

A

Both parties present their case to a previously agreed upon 3rd party. Their decision is final

38
Q

What happens if a dispute is resolved before an Escrow Disbursement Order is issued by FREC?

A

Broken must notify FREC within 10 business days

39
Q

What does a broker file if they lay no claim to their commission when a dispute goes into litigation?

A

A bill of interpleader

40
Q

What is a declaratory decree?

A

When the broker requests to participate in the settlement proceeds in the courts decision in the case of litigation over an escrow dispute

41
Q

When can a broker disburse the escrow funds without notifying FREC?

A

Within the 3-day rescission period for condo resale
When the buyer fails to obtain financing
When the purchase is made from HUD and it is stated in the contract

42
Q

What happens when there is a dispute between the broker and a party regarding the commission?

A

This is a civil court action, not an escrow dispute

43
Q

What is an example of culpable negligence?

A

When a licensee neglects to collect an escrow deposit as stated in the contract

44
Q

How much of their money is the person entitled to when they are provided with rental list information that is not current or accurate?

A

100% of their payment

45
Q

What is the penalty for rental list violations?

A

This is a first degree misdemeanor, punishable by up to 1 year in prison and/or a fine of up to $1000

46
Q

Who is held responsible for the actions of partners, sales associates and broker associates under a broker’s employment?

A

The broker, regardless of his knowledge of the action

47
Q

Who can a sales associate sue for failure to pay an agreed upon commission?

A

Only their employer (broker or owner-developer)

48
Q

How long do you have to provide notification when you change employers?

A

Must notify FREC within 10 days

49
Q

What is Larceny? or breach of trust

A

When you terminate employment and take original listings, records, papers, or contracts without permission

49
Q

What do you have to do when you have a change in address?

A

Notify the DBPR within 10 days

50
Q

What is a sole proprietorship?

A

a business that is formed by 1 individual

51
Q

What causes a partnership dissolution?

A

Death, withdrawal or addition of a partner
Agreement of the partners
Bankruptcy of any partner or the partnership
Court order

52
Q

What are the requirements for a real estate brokerage partnership to offer real estate services to the public?

A

At least one partner must hold an active broker license
Anyone providing real estate services to the public must have an active license
Sales associates and Broker associates may not be partners
Register with the DBPR in the name of the partnership

53
Q

How long does a brokerage have to replace the only active broker in a brokerage partnership upon their resignation of death?

A

Vacancy must be filled within 14 days

54
Q

What is a limited partnership?

A

(investor and broker) One general partner, one limited partner where the limited partner’s liability is limited only to their investment

55
Q

Can a limited partner take part in the management or control of the business?

A

No, if they do they become a general partner

56
Q

Can a sales associate be a general partner?

A

No, they can only be a limited partner

57
Q

Whos is liable in a limited liability partnership?

A

all partners are liable for the acts and debts with partnership business but not liable for acts or debts of other individual partners

58
Q

What is a joint venture?

A

Temporary business agreement that involves a predetermined number of transactions

May be formed orally or in writing, does not have to register with DBPR

59
Q

What is a corporate veil?

A

a legal protections of corporate officers and board of directors against individual liability for actions in connection with corporate business

60
Q

What type of corporations are formed under the laws of other states or countries?

A

Other state - Foreign corporation
Other country - Alien corporation
under Florida law - Domestic corporation or charter

61
Q

Can sales associate or broker associates be officers or directors in a real estate brokerage corporation?

A

no

62
Q

What real estate transactions can non-profits perform?

A

They may buy, sell, and lease real estate in limited amounts for its own use

63
Q

What is a corporation sole?

A

corporation formed for religious purposes, may NOT register with the DBPR as a real estate brokerage corporation

64
Q

Who hold the title for a property purchased by a corporation sole?

A

the appropriate clerical person, title passes onto their office successor in case of death

65
Q

Can a business trust register as a real estate brokerage business?

A

no, they do not perform real estate transactions for the public

66
Q

Can an unincorporated association (HOA) register as a real estate brokerage corporation?

A

no

67
Q

What is an Ostensible Partnership?

A

a fake partnership, two or more parties act or operate in a manner that misleads someone into believing that a partnership exists

68
Q

How can licensees share office space but not be in a partnership or ostensible partnership?

A

They must clearly indicate separate status with separate desks, phone numbers, signs, advertising, and stationery

69
Q

What is a trade name

A

a name under which a person transacts business that isn’t their legal name

70
Q

Who may conduct business under a trade name?

A

brokers, partnerships, corporations

71
Q

What is a Real estate syndicate?

A

Organization formed for the purpose of real estate investment

72
Q

Which businesses may register with the DBPR to perform real estate brokerage services?

A

Sole proprietorship
Corporation (profit or non-profit)
LLC
General Partnership
Limited Partnership
Limited Liability Partnership

73
Q

Which businesses may NOT register with the DBPR as a real estate brokerage?

A

Corporation sole
Joint Venture
Unincorporated Association
Cooperative Association
Business Trust

Florida RE exam (18 decks)

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