Chapter 5 Flashcards
All brokers must have a
primary office
A sales associate or broker associate
may not have an independent office of his own.
The broker’s office
must have an entrance sign located on the door of, or adjacent to the front entry.
Whenever a broker wishes to conduct business in more than one location
Each office must be registered with DBPR (Department of Business and Professional Regulations) and the appropriate fee/s paid
The branch office
must have an entrance sign located on the door of, or adjacent to the front entry.
If the home office is used in connection with a trade or business
and there is no other business location, deductions may be allowed.
Every office entry must have a sign located on the front entry door
The sign must contain the NAME of the BROKER who is registered as the broker of record for that office
Blind ads are illegal and they are
real estate advertisement by a licensee that show only a post office box number or telephone number or other vague information so that the public does not know that it is a licensee.
Conversion
means taking money that should be held in escrow for the parties and using the money for the broker’s own needs (such as operating money). This is an illegal act.
Commingling is
To mix personal and public money is illegal under Florida law
When a broker receives money
to be deposited in an escrow account, he must deposit it immediately within three business days. (Holidays and weekends are excluded)
A broker may maintain more than one escrow account and maintain
maintain up to $1000 of his own money in each sales escrow account or up to $5,000 in a property management account.
The broker must reconcile the accounts
no more than 30 days from the date of the last reconciliation was performed or should have been performed. This requirement cannot be delegated to any other person.
Broker must
- Have permission from all parties to have escrow in an interest bearing account
- Keep careful, exact records of the money in trust accounts.
- Keep records available to the DBPR or its authorized representatives during regular business hours.
- Provide once a month, a written statement comparing the broker’s total liability with the reconciled bank balances of all trust accounts
If there is an escrow dispute
It is the responsibility of the broker to then notify the FREC within 15 business days from the last party’s demand
There are three exceptions to having to communicate an escrow dispute to the FREC
- f it is a property utilizing HUD
- if the buyer of a condominium unit delivers written notice to cancel as provided under the Condominium Act
- if the buyer is unable to satisfy a financing contingency within the time frame as provided by the contract
After reporting to the FREC, the broker has 30 days from the last party’s demand to implement one of the procedures set up for escrow disputes
- Escrow Disbursement Order,
- Mediation,
- Arbitration,
- Litigation.
After the broker notifies the FREC of the escrow dispute problem
- An Escrow Disbursement Order - Once the EDO is requested, the broker must follow the instructions of the FREC
- Mediation - If the issue is not solved within 90 days, the licensee must use the other types of dispute procedures.
- If the buyer and seller cannot agree, the issue is submitted to arbitration and a third party (arbitrator) makes a decision for one party or the other.
- is simply a law suit, asking the courts through a process called Interpleader to determine the rightful owner of the disputed escrow
Once the escrow dispute is settled
The broker must notify the FREC within 10 days that the dispute is over.
When a broker provides a rental list
the FREC requires that the broker give the tenant a contract
The FREC requires that the broker gives the tenant a contract that
- Request a refund of 75% of the fee (if requested within 30 days) if the tenant does not find a rental; and
- Request a refund of 100% of the full fee (if requested within 30 days) if the information is inaccurate.
The penalty for advertising obsolete or otherwise inaccurate rental lists
is a fine up to $1,000 and/or up to one year in prison
Puffing is
If the write up on the property provides information that is a subjective opinion or inflates a listing
The Sales Associate never
accept direct payment from a Principal or customer; the sales associate receives payment only from the employing broker
The Sherman AntiTrust Act
affects Brokers
Forbids price fixing
Brokers can receive kickbacks under special circumstances which are
all parties know about the kickback
the kickback is not prohibited by another law
the kickback can be shared with a non-licensed seller or buyer with lender approval
When a current broker changes employer,
he must notify the FREC within 10 days on the current form prescribed by the DBPR
When the Sales Associate changes address
he or she must notify the FREC within 10 business days
A general partnership is
one formed by more than one broker
one where all brokers can be liable for partnership debt
at least one partner must be the active broker
the active broker is the one dealing with the public
If the primary or active broker dies,
that broker must be replaced within `14 days, otherwise, all licenses associated with the partnership become inactive
A general partnership is dissolved by
agreement of the partners death of one of the partners court action bankruptcy of one of the partners bankruptcy of the partnership
Type of businesses that may register
Limited Liability Partnership
Limited Liability Company
Trade Name
No individual, partnership or corporation may be registered under more than one trade name.
A Sales Associate
- May not use a trade name or fictitious name at any time.
- They must register and operate under their true name only.
The following cannot be registered as real estate brokerage
A Corporation Sole- church organization, but not a non-profit
A joint venture-temporary relationship
A Business Trust-investment group for its own purposes
A Cooperative/Condominium/Homeowners’ Association
An Unincorporated Association- local property owners, not partners
An Ostensible (Quasi) Partnership - hidden relationship
An ostensible partnership may be formed without the knowledge of a real estate broker.
