Class Exam Review Flashcards
What type of partnership is created when someone believes a partnership exists when it actually does not because two entities share an office?
Ostensible Partnership
Page 26
Can a spec home be a branch office?
No, because spec homes are “temporary” and therefore cannot be a branch office where you can assign agents to work from there.
What is required to register a branch office?
A fee is required to register a branch office.
In what situation can a broker avoid paying a fee to reopen a branch office?
If a broker closes down a branch office and reopens the branch office in the same location within the 2 years that their license is valid, then the broker does not have to pay a fee.
What is the difference between an appraisal and a CMA that we prepare as licensees?
Appraisal is an opinion of value on a given date.
Page 80
If a broker intends to claim a part or all of the disputed escrow funds, what should they file?
A declaratory decree.
Page 55
What are some benefits of a broker holding escrow with a title company in lieu of holding it with their brokerage?
If there is a dispute for escrow funds, title goes through small claims court independent of the broker and FREC to release the funds. If there is a dispute over escrow funds a broker is holding, the broker is required to notify FREC within 15 business days.
For business valuation, what is the measure used to determine liquidity to meet short-term obligations?
Quick Ratio - illustrates whether a business can meet its short-term obligations
Quick Ratio = (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities
Page 157
As a broker in FL, can you hold escrow funds in a bank in Georgia?
No, the escrow account must be established within the state of Florida, such as a bank, savings association, trust company, credit union, or title company having trust powers. The broker is required to have signatory privileges on all escrow accounts held.
Page 53
Is a broker liable for breaking FREC Rules?
YES
When are disclosures required for a transaction?
Disclosures are required for all residential transactions in FL. Not required in certain non-residential transactions.
Brokerage Relationship Act
Only for residential transactions. Disclosures only apply to residential as defined.
Page 168
If an entity transacting in real estate that has only one broker and the broker leaves, what must happen if the entity wants to continue to operate in good standing?
A new broker must be appointed within 14 days.
Page 24
What type of contract are we NOT allowed to prepare?
Leases
We are allowed to “prepare” 4 Types of Contracts:
- Buyer Brokerage Agreement
- Option Contract
- Listing Agreement
- Contract for Sale and Purchase
Page 183
What are you not allowed to deduct from Taxable Income (TI)?
Reserves for Replacement
Taxable Income = NOI
+ Reserves for Replacement
- Interest
- Depreciation
_________________________________
= Taxable Income (TI)
Page 269
What must you do if you have been convicted of a crime anywhere in the United States and its territories?
Report it to the DBPR within 30 days.
Page 73
What is the remaining funds in a 1031 exchange account that is proceeds from un-like property called?
Boot
Page 272
If a broker works for two different brokerages, what type of license allows for this?
Multiple License
Page 10
If a property was built in 1945, what disclosure is required to be provided to a buyer or any prospective tenant?
Lead Based Paint - pre-1978
Page 196
What is the license renewal time frame?
18-24 months
If a sales associate, broker associate, or broker does not complete the required FREC-approved post-license education prior to their first renewal what happens to their license?
It becomes null and void
However, a broker can then revert to a sales associate license after completing the required coursework and paying a fee
Pages 12-13
What is the maximum allowable penalty FREC can impose on a licensee?
$5,000 is the max penalty, however FREC cannot imprison a licensee but they do have the power of revocation of a license
Page 71
What is the worse penalty FREC can impose on a guilty licensee?
Revocation of the licensee’s license.
Page 71
Review all 18 Math Videos on YouTube
Review all 18 Math Videos on YouTube
A client pays the broker $1000 for a rental list because they want to move into a really nice neighborhood. They use it and look for a place for 2 weeks but the list was not accurate. What is their recourse?
The broker is required to pay the customer back 100%. Full refund.
Requests for refunds must be made within 30 days. After 30 days, the broker is allowed to keep all the funds. When rental lists are sold, 75% of the fee paid must be refunded if the information is correct, but no rental is obtained. MUST DISCLOSE the paragraph listed on Page 34 of our book.
Page 34
If a licensee does something wrong and a complaint has been filed against him. If he wants to appeal, what are his options?
The licensee has 30 days to reject or appeal the final order (Judicial Review - Appeal Process).
Page 69
If someone obtains their sales associate license in FL, but they don’t want to practice, how long can they keep their license?
Voluntary Inactive indefinitely
Page 11
Who sits in the formal hearing for the DOAH - Division of Administrative Hearings?
Administrative Law Judge (ALJ)
Page 68
If you want to call a FSBO and they are on the DNC, under what circumstances can you legally reach out to them?
If you have had any business transaction within 18 months with them and/or if they call you or they made an inquiry it’s 3 months.
Page 35
If a private citizen files a lawsuit and wants to claim the Recovery Fund because the licensee transactionally hurt her, what does she have to do first?
The claimant must sue the licensee in a civil action and be awarded a judgement. File and win a lawsuit. No one can collect from the Recovery Fund without an executed judgement, which they then have to present to FREC.
Page 73
An investor who is single intends to sell a property in a few years, but the property over time has appreciated. He elopes and gets married to take advantage of the capital gains savings. At the initial time he paid closing costs. Over time he improved it, which were capital improvements. When he closes he will also have to pay closing costs. Can you calculate the adjusted basis and how much money they can actually keep?
$500,000 capital gains, married, filing jointly
Learn how to calculate the adjusted basis.
Amount realized - adjusted basis = taxable amount
Page 266-267
What if a licensee does not complete their post-license education?
License becomes null and void
Page 12-13
What is a trade name? Need to know what is right and wrong when registering a trade name.
DBA - doing business as
Fictitious name
Registering the trade name with Division of Corporations of the Department of State
The actual name of an individual or entity is not a trade name
Brokers can use a trade name as long as they are registered with the Division, but NOT sales associates or broker associates
Page 33
Tom, Dick, and Harry want to run a brokerage firm. Harry wants to manage it every day and deal with people. Tom and Dick do not. What are the requirements with dealing with the DBPR?
Harry needs to have a brokers license and he needs to be registered. Tom and Dick need to only be registered with the DBPR.
At least one partner must hold an active broker’s license. All other partners must be licensed as brokers or be registered.
Page 26
Policy and procedures in a brokerage’s manual. Need to know what you need and don’t need in the manual.
Know what is too much private information that your not required to give like your phone number - no employee phone numbers should be given
Page 49
FREC $5000 fine
No imprisonment
Convicted of a crime need to contact the DBPR within 30 days
Page 71
You hired an appraiser and your seller has so many questions. If we hire an appraiser what is the first thing they will do?
Need to determine the reason for the appraisal and what type of appraisal - define the problem - establish the purpose of the appraisal
Page 87
Out of town buyer comes in from NY. They are used to transactions being done a certain way in NY. He said he wants the same broker to represent him on all his transactions. Two people come into the office and say we want you to represent us in this transaction for both the seller and the buyer its a transaction brokerage
Transaction brokerage - same person representing the transaction
Page 170
Informal hearing if there is no dispute
If there is a dispute and it goes to
Look into recommended orders page 69
Know the contents (what does a recommended order include)
What does it NOT include
Know what should or shouldn’t be in a recommend order
What doesn’t belong in a recommended order
If two houses are of the same utility but one is more affordable?
Law of Substitution
Page 85
Explain Tax Shelter
When your expenses exceed your income - but look this up
Page 282 or 296
