Chapter 5 Flashcards
Real Estate Brokerage Activities and procedures
1
Q
A broker may deposit all of the following into escrow, EXCEPT:
A. Cash
B. Personal Checks
C. Securities that can be converted to cash
D. Personal Funds in excess to FREC limits
A
D. Personal Funds in excess to FREC limits
2
Q
Prior to acceptance of an offer, to whom does the earnest money deposit belong? A. Broker individually B. Buyer and seller mutually C. Seller only D. Buyer only
A
D. Buyer only
3
Q
Complete this statement. If a husband and wife both signed a note indicating that they are jointly and severally liable for a debt\_\_\_. A. Only the husband is liable. B. Only the wife is liable. C. Neither party is individually liable D. Both parties are liable collectively
A
D. Both parties are liable collectively
4
Q
If a Broker is the escrow agent, and a dispute arises concerning the disposition of escrowed funds, what should the broker’s first action be?
A. Ask the Florida Real Estate Commission for an escrow disbursement order.
B. Give the deposit to the seller
C. Collect the broker’s portion of the deposit as damages
D. Notify the Florida Real Estate Commission
A
D. Notify the Florida Real Estate Commission
5
Q
Complete this statement. Following expiration of their licenses, sales associates may _____.
A. Continue operating in an inactive status
B. Take listings as long as they allow other licensees to sell them
C. Collect a commission they legally earned before the expiration date
D. Market listings taken before expiration
A
C. Collect a commission they legally earned before the expiration date
6
Q
Complete the sentence. General Partners in a brokerage partnership that are not qualified to perform the services of real estate must be registered: A. As inactive sales associates B. As ostensible partners C. As inactive broker associates D. For identification purposes
A
D. For identification purposes
7
Q
What must all advertising of listed property contain?
A. Name of the sales associate
B Telephone number of the brokerage firm
C. Name of the brokerage firm
D. Telephone number of the sales associate
A
C. Name of the brokerage firm
8
Q
Sales associate Glenn works for broker John. if Glenn receives an escrow deposit on Tuesday, what should he do?
A. Deliver it to his broker by Friday (Third business day)
B. Hold deposit until contract is accepted
C. Deliver it to his broker immediately (next business day)
D. Deliver it to his escrow account immediately
A
C. Deliver it to his broker immediately (next business day)
9
Q
A broker may hold escrow deposits in any of the following, EXCEPT: A. A savings association B. A commercial bank C. A credit union D. A mutual fund
A
D. A mutual fund
10
Q
Craig is a real estate sales associate working for ABC Realty, Inc. Craig decides to have refrigerator magnets made to give out to the public. What must he include on the magnets?
A. Since Craig is paying for them, he can put anything he wants on them.
B. They must contain Craig’s license status
C. They must contain the name ABC Realty, Inc.
D. They must contain the word REALTOR or broker
A
C. They must contain the name ABC Realty, Inc.
11
Q
Which business entity may NOT register as real estate brokerage firm? A. Corporation B. Corporation not for profit C. Corporation Sole D. General partnership
A
C. Corporation Sole
12
Q
When there is a dispute over escrow funds, the procedures include four choices. Which choice involves a third person recommending a solution? A. Arbitration B. Mediation C. Litigation D. Escrow disbursement order
A
B. Mediation
13
Q
A developer advertises homes for sale with a total down payment of $1,500. The developer knows that all of the houses with that amount of down payment have been sold. Is this transaction covered under truth-in-lending laws?
A. No, Because the advertising was done by a builder/developer, not a broker.
B. Yes, because this is bait and switch advertising and is illegal.
C. No, Because single family residence is exempt from regulation Z.
D. yes, because this is puffery and is illegal
A
B. Yes, because this is bait and switch advertising and is illegal.
14
Q
Who may be compensated, directly by an owner, for performing any of the eight services of real estate?
A. Broker
B. Sales associate, if employed by an owner developer
C. Principal
D. Both a and b
A
D. Both a and b
15
Q
Robert, a sales associate, has been working with an investor that is looking for single-family properties for income. In order to get preferential treatment, the investor offers a $1,000 finders fee directly to Robert for each suitable property he finds. This arrangement would be:
A. A violation of the civil rights law
B. Acceptable since it is a finders fee, not a commission
C. A violation since finder’s fees cannot exceed $50.
D. A violation of F.S. 475, because it is not paid through his broker
A
D. A violation of F.S. 475, because it is not paid through his broker
16
Q
Which items would be optional on a branch office sign?
A. Branch office name
B. The words, “Licensed Real Estate Broker”
C. The name of the business entity
D. The name of an individual broker
A
A. Branch office name
17
Q
A sales associate went on vacation. While gone, the broker moved the office around the block. When the sales associate returned, there was an urgent message that two serious prospects had called. Also, a sale closed in his absence and the broker owes him a commission. What should the sales associate do first?
A. Demand the commission
B. Forget the commission since the sales associate wasn’t there
C. Call the two prospects immediately
D. Immediately request a reissue of license from FREC
A
C. Call the two prospects immediately
18
Q
Sales associate, Tim, received a signed contract from a buyer and mailed it to the seller. The seller agreed to the terms and the escrow deposit was deposited safely in the broker’s escrow account. Tim has a disagreement with his broker and quits. The broker refuses to pay a commission since Tim was not in his employ when the contract was actually received and signed. What should Tim do?
A. Notify the state
B. Sue the seller for his share
C. Sue the broker
D. Forget it’ he or she is not entitled to the commission
A
C. Sue the broker
19
Q
John Smith is the broker of ABC Realty. he is preparing to open a branch office. All of the following items are required on the branch office sign, EXCEPT: A. Licensed real estate broker B. ABC Realty C. John Smith D. Branch Office
A
D. Branch Office
20
Q
A licensed broker and one of his employed sales associates purchase a parcel of real estate together. What relationship have they formed?
A. A joint venture
B. A limited partnership
C. A general partnership
D. An illegal venture, since only brokers can be members of a real estate partnership
A
A. A joint venture
21
Q
When moving from one branch office to another, what musta broker do?
A. Send in the old branch office registration with a request for transfer
B. Apply for and obtain a new registration for the new branch and pay the proper fee
C. Change the address on his branch office registration certificate
D. Be at least 5 miles from the main office
A
B. Apply for and obtain a new registration for the new branch and pay the proper fee
22
Q
Broker David, Broker Ben, and broker Boone form a partnership. The partnership buys, develops, and sells land. Sales associate Jerry becomes an equal partner in the firm. A sale is made, resulting in a $40,000 profit. Which statement is correct?
A. The partnership is illegal unless Jerry becomes a broker
B. The partnership agreement must be filed with the Secretary of State
C. The profits may be divided equally
D. Jerry cannot receive any portion of the profit
A
C. The profits may be divided equally
23
Q
What must be included on a real estate brokerage sign? A. Sales associate's name B. Office phone number C. Brokerage firm's license number D. Name of the brokerage firm
A
D. Name of the brokerage firm
24
Q
Six brokers wish to become partners in a real estate agency and each be active in real estate sales. What is required?
A. That they register with the DBPR as inactive brokers
B. That they all be licensed as active brokers
C. That they have at least one active broker
D. That they register the partnership with the Department of state
A
B. That they all be licensed as active brokers
25
```
Broker Rick sold Janey a rental list on March 8 for $100.00. Janey inspected all the properties and found them to be occupied. On April 6, Janey demands a refund. What action should Broker Rick take?
A. Refund $100 immediately
B. Refund $100 within 30 days
C. Refund $75
D. None, no refund is due
```
A. Refund $100 immediately
26
All of the following are required to be displayed at a broker's office, EXCEPT:
A. copies of each sales associate's license
B. A fair housing poster
C. A proper sign on or about the entrance
D. The license status of any broker's listed on the office sign
A. copies of each sales associate's license
27
Which is the best definition for "escrow"?
A. Holding something for someone else in trust
B. Uncollected funds held as earnest money
C. The broker's claim on earnest money
D. Something of value by an "interested" thirst party
A. Holding something for someone else in trust
28
Buyer Smith gave a postdated check to sales associate Brown that the seller accepted. Smith told Brown to hold the check for 2 weeks until he (the buyer) could fly to New York and transfer the funds from a savings account to a checking account. On the date Brown received the postdated check, the broker was out of town, but returned the following business day. Following the buyer's instructions, Brown deposited the postdated check into the broker's escrow account 2 weeks later. Sales associate Brown:
A. Acted properly as the seller had accepted the postdated check
B. Should have turned over the postdated check to the broker the next business day
C. Acted improperly since a post-dated check may never be accepted as a deposit
D. Acted properly by following the principal's instructions
B. Should have turned over the postdated check to the broker the next business day
29
Michael and Jerry are both brokers/ They decide to share office space. They do not use a trade name or common letterhead, although they share a secretary. Prior to putting up their signs, Jerry defrauds a prospect who came into the office. Based on this information, which statement is correct?
A. Michael and Jerry committed estoppel
B. Michael and Jerry are general partners
C. Michael can be held responsible for Jerry's acts
D. Jerry alone is responsible for this fraud
C. Michael can be held responsible for Jerry's acts
30
All of the following statements are correct with respect to a broker registered with a real estate brokerage corporation, EXCEPT:
A. The broker may be a stockholder
B. The broker has to be an officer or director
C. The broker does not have to be a resident of Florida or a citizen of the United State
D. The broker can be an active broker and officer in one corporation and an inactive broker in another corporation
D. The broker can be an active broker and officer in one corporation and an inactive broker in another corporation
31
An investigator for the Department has audited a broker's escrow account and found a balance of $12,000. The trust liability totaled $30,000. If the broker's commissions on the pending transactions total $18,000, which statement is correct?
A. The investigator will approve the audit
B. The broker may be disciplined by the Florida Real Estate Commission
C. No violation of the law is evident based on this audit
D. The broker will be required to deposit $18,000 into the escrow account within 3 working days of the audit.
B. The broker may be disciplined by the Florida Real Estate Commission
32
Which statement is true with respect to limited partners in a limited partnership formed to broker real estate?
A. All limited partners must be brokers, either active or inactive.
B. Limited partners are not allowed to perform management services.
C. Actively licensed limited partners may perform management services for the partnership
D. All limited partners must be licensed as inactive brokers or inactive sales associates
B. Limited partners are not allowed to perform management services.
33
Peggy and Joan wish to form a partnership to buy and sell real estate for others. Which statement is correct?
A. Peggy and Joan must both be actively licensed brokers
B. Either Peggy or Joan must be actively licensed brokers
C. if Peggy is an actively licensed broker, Joan must be an inactively licensed broker or be registered as an unlicensed partner
D. If Joan is an actively licensed broker, Peggy must be an actively licensed sales associate or broker associate
B. Either Peggy or Joan must be actively licensed brokers
34
Buyer Norma gave sales associate Julie a postdated check as a binder deposit and told Julie the check would not clear until the following week. The broker was tied up with negotiations on a large transaction, so Julie presented Norma's offer and disclosed to the seller that the check was postdated and would not clear until next week. The seller asked Julie to hold the check and deposit it when the funds were available. The Broker was unaware of this arrangement. Which statement is correct?
A. No violation occurred since Julie properly disclosed the nature of the deposit, and the seller allowed the check to be held subject to clearance
B. Julie is in violation of the law, but the broker was unaware of the arrangement and has not violated the law
C. Both Julie and the broker are in violation of the law
D. There is no violation since postdated checks cannot be deposited
C. Both Julie and the broker are in violation of the law
35
Sales associate Sandra wants to advertise her home for sale. What may happen if she advertises in her own name only?
A. She may be charged with acting as a broker
B. This would be considered a blind ad, and she is subject to disciplinary action by the commission
C. She may do so but must reveal her licensed status prior entering into serious negotiations
D. She may do so but must divulge her identity as a licensee in the ad
C. She may do so but must reveal her licensed status prior entering into serious negotiations
36
```
A broker sells Jayne, a prospective renter, a rental list for $100 on May 1. If Jayne wants a refund, by what date must Jayne request the refund?
A. May 31
B. June 1
C. May 15
D. June 15
```
A. May 31
37
```
An earnest money deposit can be placed in all of the following institutions, EXCEPT:
A. a stock association
B. a commercial bank
C. a savings association
D. a credit union
```
A. a stock association
38
Which statement is correct regarding a corporation sole?
A. it can broker real estate deals
B. It allows title to go to the heir of the clergy in place
C. It allows title to go to the successor to the clergy in place
D. It acts like a corporation for profit
C. It allows title to go to the successor to the clergy in place
39
```
Without specific authorization, it is a violation for a sales associate to accept which of the following as a deposit?
A. a postdated check
B. cash
C. Specie (Coin)
D. Valuable consideration
```
A. a postdated check
40
A broker receives conflicting claims on an escrow deposit and requests an escrow disbursement order from the commission. The commission orders the money be given to the buyer. The seller obtains a judgement against the broker. What must the broker do?
A. Borrow the money to pay the seller
B. Ask the buyer to give the money back to the seller
C. Have the claim paid by the recovery fund
D. Require the sales associate to pay it
C. Have the claim paid by the recovery fund
41
```
What type of advertising would a broker most likely use to sell a duplex?
A. National
B. Specific
C. Institutional
D. General
```
B. Specific
42
```
Which business structure may NOT act as a real estate broker?
A. joint venture
B. corporation sole
C. corporation for profit
D. a and b
```
B. corporation sole
43
A sales associate is selling his or her own property. What information would be required in the broker's advertisement?
A. agent and licensed real estate broker
B. Owner-agent
C. name of the brokerage firm
D. name of the brokerage firm, owner-agent and sales associate's name
C. name of the brokerage firm
44
```
Which business structure holds title to land in its own name?
A. partnership
B. corporation sole
C. syndicate
D. corporation for profit
```
A. partnership
45
The buyer and seller agree in a contract to postdate the deposit check. which statement is correct?
A. the sales associate should hold it until it clears
B. the sales associate should immediately give the check to his or her broker
C. the sales associate should refuse the check
D. the deposit check should be put in escrow immediately
B. the sales associate should immediately give the check to his or her broker
46
All of the following statements related to the role of the sales associate are correct, EXCEPT:
A. a sales associate may only be employed by one broker at a time
B. a sales associate may only be compensated by their employing broker or owner-developer
C. a sales associate can be employed by the general public to perform real estate activities
D. a sales associate may only perform real estate activities authorized by their employer
C. a sales associate can be employed by the general public to perform real estate activities
47
```
Which type of business relationship must be in writing?
A. corporations
B. partnerships
C. corporations and limited partnerships
D. joint venture
```
C. corporations and limited partnerships
48
A real estate broker asks his sales associate to commit an illegal act. What should the sales associate do?
A. comply, as the sales associate may lose his or her job
B. refuse to comply and withdraw from the relationship
C. notify the Florida real estate commission
D. comply, but inform the employer that he or she is complying under duress
B. refuse to comply and withdraw from the relationship
49
```
All of the following cause forfeiture of a corporation's charter, EXCEPT:
A. bankruptcy
B. failure to pay the annual report fee
C. court action
D. action of the stockholders
```
A. bankruptcy
50
```
A licensed sales associate receives a cash binder deposit from a buyer on a parcel of land. Before the sales associate can give the deposit to the broker, the sales associate loses the deposit. Who is responsible?
A. broker
B. sales associate
C. broker and sales associate
D. buyer
```
C. broker and sales associate
51
A sales associate finds a buyer ready, willing, and able to purchase a home. The seller refuses to sell and will not pay the broker a commission. The broker does not pay the sales associate a commission. What may the sales associate do?
A. sue the seller
B. sue the broker
C. nothing, the sales associate has no remedy
D. sue the buyer and seller
B. sue the broker
52
```
What must be included in real estate ads and on signs?
A. name of the sales associate
B. name of the brokerage firm
C. name of the seller
D. office phone number
```
B. name of the brokerage firm
53
In a partnership, each partner does NOT necessarily have which of the following?
A. power to bind the others by his or her activity
B. a share in the management of the business
C. liability for the debts of the partnership
D. equal shares of the profits of the partnership
D. equal shares of the profits of the partnership
54
When a buyer withdraws an offer prior to it being accepted by the seller, what should the broker do?
A. give the deposit back to the buyer
B. give the deposit to the seller
C. retain the deposit as a commission
D. call the division of real estate for instructions
A. give the deposit back to the buyer
55
```
Due to possible problems with clear and marketable title, a broker should avoid properties owned by which type of business?
A. partnership
B. corporations for profile
C. corporation sole
D. limited partnership
```
C. corporation sole
56
Florida law requires that brokers place escrow deposits into an escrow account. What else is required by the law regarding that account?
A. the broker be a signer on the account
B. the office manager be a signer on the account
C. the broker must appoint someone to oversee the escrow account
D. FREC must be informed of the location of the escrow account
A. the broker be a signer on the account
57
A broker listed five condos for rent on the beach in Florida. Three of the units rented for $1,000 per month, and two of the units rented for $500 per month during season. The broker places an ad in a Chicago newspaper, reading "Beachfront condos for rent. $500 per month, call Ocean Front Realty (407) 368-0044." The two $500 units were not available at the time the ad ran. Is this legal?
A. no, as the $500 units were not available
B. yes, the broker has done nothing wrong
C. yes, but would be in violation if the ad was in a Florida paper
D. no, because Florida brokers are not permitted to run ads in out-of-state newspapers
A. no, as the $500 units were not available
58
Which action by a broker is an example of commingling?
A. placing escrow money into his or her personal account
B. failing to disclose material facts
C. failing to give an agency disclosure
D. steering to an ethnic neighborhood
A. placing escrow money into his or her personal account
59
```
Sue Douglas wishes to open a real estate brokerage corporation, Sunshine Realty, Inc. When ordering her sign, she is required to include all of the following items, EXCEPT:
A. Sunshine Realty, Inc.
B. Sue Douglas
C. Licensed real estate broker
D. the office phone number
```
D. the office phone number
60
What is the deadline for a broker to deposit all earnest money funds?
A. the next business day
B. the next calendar day
C. the third calendar day
D. the close of the third business day following receipt
D. the close of the third business day following receipt
61
Which of the following is required in a real estate brokerage partnership?
A. all general partners must be active brokers
B. all officers and directors must be active brokers
C. at least one of the partners must be an active broker
D. all partners, officers, and directors must be active brokers
C. at least one of the partners must be an active broker
62
```
If both the buyer and the seller make claims on the escrow money held by the broker, within how many days is the broker required to notify FREC?
A. 5
B. 10
C. 15
D. 20
```
C. 15
63
```
Once an offer is accepted and the escrow deposit is in the broker's account, the broker holds the deposit on behalf of which party or parties?
A. seller
B. buyer
C. both the buyer and seller
D. the title company
```
C. both the buyer and seller
64
Which of the following is required in a real estate brokerage limited partnership?
A. all officers and directors must be registered
B. all limited partners must be active licensees
C. all general partners must be active licensees
D. the partnership must be registered with DRE
D. the partnership must be registered with DRE
65
```
Bob and Mary have agreed to participate in a limited number of transactions. Bob and Mary have no right to obligate or bind each other. What business relationship have they formed?
A. joint venture
B. corporation
C. partnership
D. limited liability company
```
A. joint venture
66
```
Which form of escrow settlement procedure requires the parties to abide by an objective third party's decision after a hearing?
A. escrow disbursement order
B. mediation
C. arbitration
D. litigation
```
C. arbitration
67
```
Mary, Moe and Curly for a partnership by oral agreement. Moe and Curly buy a property and sign a contract under the partnership name. Which applies?
A. only Moe and Curly are liable
B. All three are liable
C. the partnership is liable
D. no one is liable
```
B. All three are liable
68
```
A real estate sales associate may accept commissions from which of the following?
A. a buyer
B. a seller
C. a mortgage broker
D. the sales associate's employer
```
D. the sales associate's employer
69
Why can't a sales associate work for more than one broker or one owner-developer at the same time?
A. they owe it to the employer to work for at least 40 hours per week
B. the DBPR would have a hard time keeping up with where they are working
C. a sales associate or broker associate is an agent of the broker or owner that he or she is working for
D. The federal trade commission, under rule 27-S, prohibits a sales associate or broker associate for working for more than one employer at the same time
C. a sales associate or broker associate is an agent of the broker or owner that he or she is working for
70
```
Which business structure incorporates limited as well as unlimited liability?
A. sole proprietorship
B. corporation for profit
C. general partnership
D. limited partnership
```
D. limited partnership
71
```
Two brokers sharing space in a manner whereby the public presumes the brokers are partners may be engaged in what is referred to as a:
A. quasi-partnership
B. general partnership
C. limited partnership
D. joint venture
```
A. quasi-partnership
72
A Georgia broker and Florida broker form a joint venture to sell a Florida property that a friend of the Georgia broker owns. The Georgia broker comes down to assist the Florida broker in the sale of the property. The Florida broker:
A. may share the commission with the Georgia broker
B. Cannot pay the Georgia broker part of the commission
C. Can pay the Georgia broker only a referral fee
D. Can pay the Georgia broker only for expenses and travel
B. Cannot pay the Georgia broker part of the commission
73
What must a sales associate do when he or she changes employers?
A. notify the Department using a change of status form
B. take all of their listings and files with them
C. wait 30 days to begin to operate
D. Nothing, no action is necessary
A. notify the Department using a change of status form
74
Sales associate Sally decides to use a post office box for all of her mail even though she has not actually moved out of her house. which statement applies?
A. she need not notify the Department since she is living at the same location
B. she need not notify the Department if her e-mail address has not changed
C. she must notify the Department of her address change within 30 days
D. she must notify the Department of her address change within 10 days
D. she must notify the Department of her address change within 10 days
75
```
Which business structure makes all principals responsible for any debts incurred in the name of the entity?
A. corporation
B. partnership
C. limited partnership
D. joint venture
```
B. partnership
76
A broker receives a deposit check on Monday and deposits it in his escrow account the following Monday. The check subsequently is returned with non-sufficient funds (NSF). What fraud has the broker committed?
A. concealment
B. conversion
C. culpable negligence by failing to check to make sure the check was good
D. culpable negligence by failing to deposit the check "immediately"
D. culpable negligence by failing to deposit the check "immediately"
77
Which of the following is a characteristic of a general partnership?
A. the partners agree to share in the profits and debts of the partnership
B. all partners must be brokers
C. there must be at least one limited partner
D. the shareholders agree to share in the profits and debts of the partnership
A. the partners agree to share in the profits and debts of the partnership
78
Complete the sentence. A joint venture is typically created:
A. for a single project
B. by filing the appropriate paperwork with DBPR
C. by filing the appropriate paperwork with the secretary or state
D. to avoid paying taxes
A. for a single project
79
A sales associate receives an offer from the buyer along with a post dated check. What action must the sales associate take?
A. return it, as post dated checks are illegal in Florida
B. immediately turn it over to the broker
C. cash the check on the appropriate date, and give the money to the broker
D. hold the check until the appropriate date, and deposit it into the escrow account
B. immediately turn it over to the broker
80
```
Carol buys a rental list for $350.00, looks at over 40 available apartments on the list, but is not satisfied with any of them. After 3 weeks, she requests a refund of her money. What is she entitled to?
A. $175.00
B. $262.50
C. $350.00
D. nothing
```
B. $262.50
81
```
Who should hold an escrow deposit?
A. the broker
B. a disinterested third party
C. the attorney
D. the seller
```
B. a disinterested third party
82
```
What kind of partnership exists when one or more parties cause a third party to believe a partnership exists when no partnership actually does?
A. actual
B. constructive
C. ostensible
D. general
```
C. ostensible
83
```
When may a sales associate take a deposit without his broker's permission?
A. when the broker is out of town
B. when the buyer insists
C. when no lender is involved
D. under no circumstances
```
D. under no circumstances
84
A sales associate lists a seller's house and sells it in 2 days. The seller is very appreciative and wishes to give the sales associate a bonus. Which statement is correct?
A. the sales associate can receive the bonus if the broker does not object
B. the sales associate cannot receive the bonus from the seller
C. of the seller places the bonus in escrow, the sales associate can receive it
D. the sales associate can receive the deposit only if it is paid in cash
B. the sales associate cannot receive the bonus from the seller
85
Which statement is correctly applies to a branch office sign?
A. it must be easily observed and read by anyone entering the office
B. it must contain the words "branch office"
C. it must have the names of all active sales associates
D. it may have the names of all active and inactive officers and directors
A. it must be easily observed and read by anyone entering the office
86
```
After a transaction fails to close, the buyer and seller make conflicting demands upon the deposit held in escrow by the broker. The broker properly notifies FREC of the dispute. The parties to the contract refuse to resolve the dispute, and the broker elects to settle the matter in court rather than ask the commission for an escrow disbursement order. If the broker has no interest in collecting a commission, which legal action should be filed?
A. Writ of supersedes
B. Bill of declaratory judgment
C. Suit for specific performance
D. Bill of interpleader
```
D. Bill of interpleader
87
A broker receives a deposit on a property, but the seller rejects the offer. What should the broker do?
A. retain the deposit until he or she can talk the seller into accepting
B. give the deposit back to the buyer
C. keep the deposit while the buyer looks for another property
D. notify FREC immediately
B. give the deposit back to the buyer
88
Which of the following is a required characteristic of a broker's office sign?
A. be a billboard on the roof which can be seen from I-95
B. have letters at least 2 inches in height, if an interior sign
C. contain the names of the sales associates and the words "We aim to please"
D. contain the name as on the broker's license and the words "Licensed (Lic.) Real Estate broker"
D. contain the name as on the broker's license and the words "Licensed (Lic.) Real Estate broker"
89
Who normally manages a corporation for profit?
A. the member stockholders working through the executive officers
B. the executive officers working through the directors
C. the directors of the corporation working through the executive officers
D. the stockholders of the corporation working through the directors
C. the directors of the corporation working through the executive officers
90
A broker sells a house to a buyer and recommends a particular title company. The title company forwards a referral fee to the broker. The broker:
A. has done nothing wrong as this is considered normal business practice
B. is in violation of the law
C. may accept the fee if he or she advises the seller
D. may accept the fee if he or she advises the buyer
B. is in violation of the law
91
A broker asks a sales associate to fill out documents in a manner that the sales knows is illegal. What should the sales associate do?
A. comply with the broker's request
B. ask FREC for instructions
C. refuse to comply
D. handle the matter in a way that he or she deems appropriate
C. refuse to comply
92
A buyer gives a deposit check on a sale of a house to the sales associate and inadvertently makes the check out to the sales associate. What should the sales associate do?
A. cash the check and give the broker the cash
B. endorse the check and give it to the employing broker
C. endorse the check and deposit it in a personal account
D. endorse the check and deposit it in their escrow account
B. endorse the check and give it to the employing broker
93
All of the following statements are correct regarding a corporation sole, EXCEPT:
A. title passes to the successor in office
B. it may broker real estate
C. it may list real estate with a broker
D. it may sell its own real estate
B. it may broker real estate
94
Before registration is granted to a "foreign" corporation to do brokerage business in the state of Florida, it must have at lease one active Florida broker and:
A. the corporation must reincorporate in the state of Florida
B. the corporation must get approval from the Governor's office of reincorporation
C. the corporation must receive a letter from the Florida Secretary of State, giving permission to do business in Florida
D. nothing else; a "foreign" corporation may never do brokerage business in Florida
C. the corporation must receive a letter from the Florida Secretary of State, giving permission to do business in Florida
95
```
A buyer makes an offer, and the deposit is placed into the broker's escrow account. At this point, to whom does the deposit belong?
A. broker
B. buyer
C. seller
D. buyer and seller
```
B. buyer
96
```
A broker has an escrow account for his property management firm. How much of the broker's own money can be deposited to open and maintain the account?
A. $5,000
B. $1,000
C. $200
D. $0
```
A. $5,000
97
A sales associate sells a listing of another broker. The buyer gives a check made payable to the sales associate. What should the sales associate do?
A. cash the check, and give the money to the employing broker
B. cash the check, and give the money to the listing broker
C. return the check to the buyer, and ask that it be reissued to the employing broker
D. return the check to the buyer, and ask that it be reissued to the listing broker
C. return the check to the buyer, and ask that it be reissued to the employing broker
98
Sales associate Betty, who works for broker Sam, went on vacation to Key West for 2 weeks. While there, she ran into three couples from New Jersey, who were interested in buying waterfront condos. Betty sold condos to all three couples. Being that she was from out of town, she approached broker Tony, who ran the deals through his office. In appreciation for Betty's efforts, broker Tony paid Betty $15,000. Which statement applies?
A. sales associate Betty should have received more than $15,000
B. sales associate Betty and broker Tony have both violated F.S. 475
C. sales associate Betty and broker Sam have both violated F.S. 475
D. there was no violation of F.S. 475
B. sales associate Betty and broker Tony have both violated F.S. 475
99
```
Which of the following business structures incorporates limited as well as unlimited liability?
A. sole proprietorship
B. general partnership
C. corporation
D. limited partnership
```
D. limited partnership
100
```
Sales associate Sally sells a home. When must Sally's broker pay her commission?
A. within 5 days of the closing
B. within 10 days of closing
C. at the closing
D. within a reasonable period of time
```
D. within a reasonable period of time
101
```
From which of the following may a sales associate receive compensation, referral fees, or bonuses?
A. another sales associate
B. another broker
C. the employing broker
D. a FSBO
```
C. the employing broker
102
What must a broker do in order to open a brokerage firm under a trade name?
A. file the name of the corporation
B. register all officers, but not directors
C. file the name with the Department of commerce
D. file the name with the Division of Real Estate
D. file the name with the Division of Real Estate
103
Which description best describes an earnest money deposit?
A. cash, securities, or promissory note
B. cash, securities, or personal check
C. specie, securities, or personal check
D. cash, securities, personal check or any medium of exchange that can be converted to cash
D. cash, securities, personal check or any medium of exchange that can be converted to cash
104
If a real estate licensee is involved in a personal real estate transaction, which of the following is correct?
A. the licensee must disclose his or her license status prior to entering any serious negotiations
B. the licensee must disclose his or her license status in any advertising
C. the licensee is not required to disclose his or her license status in a personal transaction
D. the licensee must disclose the license status on any yard sign using terminology such as "owner agent"
A. the licensee must disclose his or her license status prior to entering any serious negotiations
105
Three brokers are partners in a real estate brokerage partnership. One of the brokers dies. What happens to the partnership?
A. nothing, since there is still at least one active broker to run the business
B. the other partners who are brokers have their licenses suspended during the period of reorganization
C. the partnership will need to reregister using the proper forms so that the business entity may continue to function
D. once any of the partners die, that business entity may never be reformed
A. nothing, since there is still at least one active broker to run the business
106
```
A sales associate leaves a broker's office and take an original copy of a document from the broker's records. What is this action considered to be?
A. bad faith
B. legal
C. extremely stupid
D. larceny
```
D. larceny
107
A broker has an office at 250 North Orange Ave., Orlando, in the Citrus Bank Building. The bank must make extensive repairs, and the broker moves to 244 Orange Blossom Trail, Orlando. What should the broker do?
A. apply to the Department for an initial issue
B. notify the department by registered mail of this change
C. write the new address in ink on his license
D. make an application on the proper form, attach no fee, make a copy of the current license and forward them to the department for a reissue
D. make an application on the proper form, attach no fee, make a copy of the current license and forward them to the department for a reissue
108
Regarding limited partnerships as real estate brokers, there must be one or more general and one or more limited partners in order to qualify as a licensed real estate brokerage. What does the real estate license law also require in Rule 61J2-4.007?
A. that each general partner be registered, at least one of whom is an active broker
B. each general and limited partner to be licensed as active brokers
C. that all of the general partners be licensed as active, but none of the limited partners
D. that at least one general and at least one limited partner be registered as active
A. that each general partner be registered, at least one of whom is an active broker
109
A sales associate receives negotiable securities from the purchaser as earnest money. What should the broker do with these securities?
A. place them immediately into the office safe until the date of closing, at which point they should convert them into cash
B. immediately give the securities to the seller, who has the right to do anything they want with the money
C. convert the securities into cash at the earliest practical time, and then deposit the proceeds immediately into the escrow account
D. give the securities to the Department of Banking and Finance for their safekeeping, until the title closing
C. convert the securities into cash at the earliest practical time, and then deposit the proceeds immediately into the escrow account
110
A corporation for profit was formed for brokering real estate. "A" held a brokers license and became president. "B" and "C" financed 40% of the corporation and each was made a directer, who was to assume normal office duties and functions. "D" and "E" held broker associate licenses with prior brokerage corporations and were employed as broker/sales associates. Which applies?
A. the president must register as an active broker and the directors must register as non-licensed registered persons
B. a corporation for profit cannot be formed to broker real estate
C. "D" and "E" cannot be hired as broker associates, but could be stockholders
D. none of the above
A. the president must register as an active broker and the directors must register as non-licensed registered persons
111
```
A customer requested that a broker locate a rental for $500 per month. The broker requested $200 in an upfront fee from the customer to pay for time and effort while locating this type of property. The broker was able only to find a unit renting for $600 per month. What must the broker do?
A. keep 75% of the $200
B. keep 25% of the $200
C. keep the $200
D. refund the $200 to the customer
```
D. refund the $200 to the customer
112
A sales associate procures a sale. The sales associate's broker dies before receiving the commission for the sale. What may the sales associate do?
A. sue the property owner
B. sue the broker's estate
C. place a lien on the seller's property
D. sue the buyer
B. sue the broker's estate
113
```
Six people organize a business to buy and sell real property. The title is to be held in trust by a board of trustees or someone in a position of trust. They have been required to file a declaration of trust with the Secretary of State. What type of business is being formed?
A. corporation for profit
B. corporation sole
C. syndicate
D. limited partnership
```
C. syndicate
114
A broker has a main office and eight branch offices. One of the sales associates, Maria, works out of several of the offices but spends most of her time working out of branch office number five. From which office must Maria be licensed?
A. the main office
B. any office, to be chosen by Maria
C. any office, at the broker's discretion
D. branch office number five
C. any office, at the broker's discretion
115
```
Broker Sam sells a list of rental properties to a prospective tenant, Michelle, on March 1. Michelle looks at several properties on the list and then changes her mind about living in that city and decides to move back up North. On Mach 31st, Michelle requests a refund. How much of a refund will Sam have to give back to Michelle?
A. 0%
B. 25%
C. 75%
D. 100%
```
C. 75%
116
Broker Bennet is trying to decide whether to operate as a sole proprietorship or charter as a corporation. Which of the following is an advantage of sole proprietorship?
A. the broker would have limited liability for the debts of the firm
B. there would be less effort to legally create and maintain the ownership form
C. the potential exists to easily sell a part of the entity ownership in the business to raise additional capital for the firm
D. the ownership is easily transferable
B. there would be less effort to legally create and maintain the ownership form
117
Complete the sentence. A sales associate cannot:
A. change the policies of his or her employer without consent
B. change the terms and conditions of a sales contract without permission
C. change the terms and conditions of a listing contract without permission
D. all of the above
D. all of the above
118
A broker receives a binder deposit from a buyer who is making an offer on a property. Two days later, the property owner/seller makes a counteroffer, which is accepted by the buyer. The attorneys for buyer and seller disagree over the title to the property. Both buyer and seller make demands on the broker for the deposit. Based on this information, what should the broker do concerning the disputed deposit.
A. return it to the buyer
B. divide it between himself and the seller according to their agreement
C. notify the commission within 15 business days
D. file for arbitration
C. notify the commission within 15 business days
119
A real estate associate is prohibited from which action?
A. suing the principal
B. suing the broker
C. working for anyone other than a broker
D. acquiring properties and listings to sell
C. working for anyone other than a broker
120
```
Within what timeframe must real estate licenses notify the Department of a change of address?
A. 5 days
B. 10 days
C. 60 days
D. 30 days
```
B. 10 days
121
```
A broker sells a prospective tenant a rental list $200. The prospective tenant decides not to rent in the area and did not use the list. The tenant then demanded a refund within 30 days. What action should the broker take?
A. refund $200
B. refund $50
C. refund $150
D. no refund needs to be made
```
C. refund $150
122
A seller listed his home with a broker, and the broker sold the property to a buyer. The buyer made an earnest deposit of $10,000, which the broker promptly deposited in the escrow account. The sales contract contains a clause that makes the agreement contingent upon the buyer obtaining mortgage financing. The buyer is notified by the bank that his housing expense ratio exceeds the limit, and therefore his application has been rejected. What should the broker do?
A. hold the deposit until the bookkeeper returns
B. return the deposit immediately, provided the seller does not object
C. ask the FREC for an escrow
D. return the deposit only after receiving a court judgement
B. return the deposit immediately, provided the seller does not object
123
What would a broker be guilty of if he or she takes escrow funds and places them in a personal account?
A. concealment
B. conversion
C. culpable negligence
D. Nothing, this is a legal act as long as the broker keeps accurate accounting of all funds
B. conversion
124
A sales associate has a disagreement with the broker over a commission. The sales associate quits. What can the sales associate do to attempt to collect the commission?
A. file a lawsuit against the owner of the property
B. ask FREC to settle the matter
C. file a lawsuit against the former broker in civil court
D. collect from the Florida Real Estate Recovery Fund
C. file a lawsuit against the former broker in civil court
125
A broker has an office using the trade name ABC Realty and Associates. The broker now wishes to use another trade name for a new office: Easy as ABC. Which statement applies?
A. this is legal, but the broker would need multiple licenses
B. this is illegal since the broker may only use one trade name
C. this is illegal since Easy as ABC does not indicate it is a real estate office
D. this is legal, but the broker would need a group license
B. this is illegal since the broker may only use one trade name
