Commissioner's Rules Flashcards
Each licensee may not hold more than one license at any one time
True
The commissioner can accept equivalent education and experience in lieu of pre-licensing education requirements for broker applicants , except for
27-hour Arizona-specific course.
Licensees must notify the ADRE in writing within 10 days if
sentenced/convicted of misdemeanor or felony
received a deferral of judgment
issued an order, judgment, or adverse decision involving fraud/dishonesty, or real estate-related conduct, permanently or temporarily restricts them from engaging in real estate-related activity or that involves consumer fraud or payment from a recovery fund or fund of last resort.
professional or occupational license in any state is restricted suspended revoked or otherwise denied
A licensee whose personal information or qualifications change has how many days to notify the ADRE and what should the notice include
10 days
Licensees name
signature,
license number,
and any additional information related to the change
What changes in information requiring department notice?
Name
Address (personal/business)
telephone number
Business entity (licensee now operating under a professional corporation)
**Name changes can be completed online, but the required form must be completed in writing and then submitted through the ADRE website.
Designated brokers must also notify the ADRE in writing of any of this changes above their own or their employing broker’s information or qualifications
They must also notify the department of any proposed change such as a name or address change and the employing broker is not allowed to make that change until the department approves it
Notes must include
Designated brokers name and signature
the employing broker’s legal name
any additional information pertinent to the change
Arizona requires renewing licensees to take how many hours of approved continuing education courses within the two-year licensure period.
24 hours
ADRE requires that continuing education cover topics that are continually changing—like what
contract law, legal issues, fair housing and so on
so that real estate licensees are kept up to date.
The education must have been completed at what point in time
since the licensee’s preceding licensure date but can otherwise take place any time in that two year period.
What are the required hours consist of regarding education material that must be taken
Three hours each of:
Agency law
Contract law
Commissioner’s standards
Real estate legal issues
Fair housing
Disclosure
Six elective hours from one of these categories, business brokerage, or general real estate
Designated brokers must also complete a broker management clinic during each renewal cycle.
A salesperson renewing for the first time may include credit for attendance at the Contract Writing class if?
it’s taken within one year before the date of the salesperson’s original licensure.
A broker renewing for the first time may include credit for attendance to which educational course
Management Clinic taken before the broker’s original licensure date.
In advertising for real estate
misrepresentation and misleading ads are what?
Prohibited
The listing broker’s blank must be clearly and prominently displayed on all ads for listings associated with the broker’s firm?
listing salespeople who advertise have the option to include their blank or not but they must include their blank name and firm
name
name/designated broker
When licensees (salespeople or brokers) list their own property, they must disclose their status as a salesperson by using the words, blank in the ad
“owner/agent,”
All advertising must be supervised and approved by who?
Designated broker
What are blind ads
ads that imply that no real estate professional is assisting with the sale, lease, or exchange (i.e., includes neither the licensee’s name nor the brokerage’s name) —are strictly prohibited.
If add is on twitter or face book and has limited character input, an agent must have what to redirect the consumer
A Link, which takes you to a site that includes the designated broker’s name. The “one click away” rule states that when displaying the full name of your brokerage is impractical in an online ad, you must include a link to a clear display of the brokerage name.
Licensees must obtain what to place a sign on a property.
owner’s written consent
When can licensees use the term acre in advertising
if it’s referring to an area of land (or portion thereof) comprising exactly 43,560 feet (no approximations).
Licensees aren’t allowed to describe a premium or reduced cost as what
award” or a “prize.”
Licensees must disclose to consumers what before the consumer participates in the offer.
all terms, conditions, restrictions, costs, and any applicable expiration date for any incentive offered
Lotteries, contests, or drawings for interest in a development (such as a timeshare) are prohibited unless
he developer applies to the department for an exception.
The Telephone Consumer Protection Act is managed by who?
Federal Trade Commission (FTC)
TCPA established which Registry
Do Not Call Registry DNC in 2003
Sellers are required to check What Registry at least once every 31 days
DNC registry
and drop disconnected, registered, or reassigned numbers from from their contact list
Real estate professionals can call consumers with whom they have established business relationships for up to how many months after the clients last purchase, delivery, or payment, even if the client is registered with the DNC list
18 months
Real estate professionals may continue to contact clients for up to how many months after an inquiry or application has been made?
3 months
Any time a consumer asks to be removed from the call list company must do what?
remove them immediately
Do not call requests and the DNC registry are effective for how long
permanently
Violators may be subject to 41,484 per violation
Licensee compensation typically comes out of the who’s pocket
Seller’s proceed from the sale
but commission structures and collection methods are negotiated independently with each client
What is procuring cause
(who started the chain of events that led to the sale) to prove they’ve earned a commission, depending on the type of agency agreement.
Arizona considers compensation as
monetary payment given to an individual in exchange for their services in the practice of real estate activities.
Employing brokers may pay licensees through two kinds of business entities, which are
professional corporations (PCs) and professional limited liability corporations (PLLCs). Employing brokers may not pay licensees through any other business entities.
Is employing broker obliged to pay compensation when it has been earned legitimately by a licensee, even if the license has expired or the licensee is no longer employed by the employing broker
Yes
Can legal action be taken in the state’s courts to collect owed compensation
yes but the licensee may bear the burden to prove licensure at the time of the transaction in question
What does the broker must disclose to all transaction parties in writing before closing
The name of each employing broker who represents a transaction party, and who will receive compensation from the transaction
If licensees engage in mortgage brokerage or loan negotiation for compensation, they must clearly disclose to the party from whom they’re collecting compensation what
that they’ll be receiving compensation for both real estate and mortgage brokerage/loan negotiation services.
Terms for compensation for cooperating brokers are laid out where
in the agency agreement with the seller, independently for each transaction.
Can a Salespersons enter into a cooperation agreement with an out-of-state broker.
No
Will The real estate commissioner will not entertain disputes between licensees in a co-brokerage arrangement about earning, splitting, or nonpayment of compensation.
No
Disputes of this nature are usually handled by the employing broker, or they may be resolved by civil action.
Licensees seeking outside intervention to collect compensation must go where
may take action in court, where, among other evidence, the complainant will need to prove licensure at the time of the transaction in question.
is Compensation from multiple parties permissible
yes
when all parties agree in writing and it is processed through the brokerage firm. If all parties are not made aware of a compensation payment, it may be viewed as undisclosed compensation, which is illegal.
Many compensation details, such as what percentage of the compensation goes to whom, will be laid out where
agency agreement between the broker and client.
In Arizona, licensees are legally required to keep most real estate transaction-related documents for at least five years. These include copies of:
Listings
Contracts
Rejected/expired offers to purchase
Escrow deposit receipts
Trust account records
Where can records be kept of different documents?
Brokers main office
Branch office
offsite record storage center with state of AZ- As long as the department is notified of the offsite facility’s address in writing and is granted access to the files
Real estate licensees are allowed to use electronic recordkeeping methods as long as their system meets these conditions:
Readily accessible and identifiable within 24 hours of any request for inspection or audit by the ADRE
Designated broker is responsible for using appropriate system is used to maintain the security and accessibility of the electronic records
department must be granted unlimited access to the file management system. This is accomplished by the designated broker completing a User Agreement Granting Department of Real Estate Access to User’s Electronic Management System form.
Each sales transaction file must contain the following, in the order that they’re executed (to make auditing easier):
The sales contract (must state the type and amount of earnest money)
Escrow account receipts, escrow instructions, and details of escrow release
The closing/settlement statement
The listing agreement (if applicable) – The designated broker must review, initial, and date the listing agreement within 10 days of its execution. The designated broker may also designate an associate broker to do this.
when is the best time to provide copies of documents to all parties involved in a transaction
as soon as possible
At listing phase of transaction, it’s important to proved the client with all offer right up to the point of closing, even if another offer has been accepted
The only time licensees don’t need to submit offers to a client is when the client has provided a written request noting they’re not going to entertain any other offers. Executed copies are of particular importance when it comes to a transaction because these are what sets the wheels in motion for the transaction to proceed to the next step, whether it’s an offer, contract, escrow, or closing.
What are AZ basic standards of conduct for real estate professionals
to be fair, honest and lawful
dealing fairly with all transaction parties
conforming to the standards of practice and competence recognized in the professional community
Avoiding providing professional services that are outside a licensee’s field of competence
Acting within both federal and local laws, including areas like environmental disclosures, federal fair housing requirements, truth in advertising laws, and both the Arizona Revised Statutes and the Arizona Administrative Code, aka the commissioner’s rules
Honesty and disclosure include sharing any information that materially or adversely affects the consideration that any party to the transaction pays, including property defects or liens.
what code lays out the specific duties that licensees owe to their clients. Because they’re detailed in state statutes, they’re often referred to as statutory duties.
Article 11 of Arizona’s Administrative Code (AAC)
What does The Administrative Code state
States that, for clients, licensees must:
Perform all acts required of them as licensees expeditiously—with no delays, either intentionally or through neglect.
Exercise reasonable care in ensuring that they obtain information material (impactful) to a client’s interests, and accurately communicate the information to the client. If a licensee knows something, it needs to be shared with clients.
Take reasonable steps to assist their clients in confirming the accuracy of information relevant to the transaction.
Recommend that their clients seek appropriate counsel from insurance, legal, tax, and accounting professionals when appropriate. Specifically, outside experts should be consulted regarding both contractual and ownership concerns, and especially regarding the risks and responsibilities of taking possession before closing.
Licensees must not
Permit or facilitate anyone to occupy someone else’s real property without the owner’s prior written authorization.
Deliver possession prior to closing without the owner’s express instructions.
Accept compensation from more than one party to a transaction without the knowledge and consent of everyone involved.
Represent more than one party to a transaction (dual agency) without all parties’ prior written consent.
Allow a controversy with another licensee to jeopardize, delay, or interfere with a client’s transaction.
What do AZ licensees owe to their clients on ethical level
we their clients the duty of obtaining and effectively communicating material information.
Licensees are required to disclose existing or potential conflicts of interest to all transaction parties.
Licensees must disclose a potential for dual agency (when a licensee represents more than one party in a transaction) to all transaction parties and obtain their agreement before performing any agency actions or accepting compensation.
Real estate licensees owe their clients additional common law fiduciary duties, as well as statutory and fiduciary duties laid out in the Arizona Administrative Code, including:
Performing real estate acts expeditiously (without delay)
Exercising reasonable care in obtaining and communicating impactful information involving clients’ interests
Recommending that clients seek counsel from insurance, legal, tax, and accounting professionals regarding contractual, possession, and ownership risks
Serving a client’s best interests, which includes presenting all offers received to the client, presenting counter-offers where applicable, and following the client’s specific instructions
Statutory duties dictate that licensees must Not
Help anyone occupy the property prior to closing without written authorization.
Allow a controversy with another licensee to interfere with a transaction.
Property Negotiations
All negotiations in a real estate transaction must be handled exclusively by the transaction principal’s broker or the broker’s representative, except:
In a For Sale by Owner transaction
When the principal waives this obligation in writing
When no licensed representative of the principal’s broker is available for 24 hours
Employing brokers are entities that are ultimately responsible for the acts of their employees. Responsibilities include:
Reviewing and managing all transactions and agreements
Reviewing all advertising
Managing all documents and records
Managing all funds
Supervising unlicensed assistants
Ensuring licensees are familiar with federal, state, and local laws related to real estate
Who are designees
licensed brokers who carry out specific duties related to the brokerage’s professional conduct. They oversee all professional real estate activities that might require a real estate license.
Arizona statutes require that employing brokers establish and enforce what
written policies and procedures to accomplish their supervision duties unless the brokerage consists of a single office with one designated broker, one licensee, and one unlicensed person.
who is expected to establish a system for monitoring compliance with statutes, rules, and the employing broker’s policies and systems.
Designated brokers
who is responsible for reporting any license law violations committed by licensees under their supervision.
Designated brokers
