Key Terms (Ch. 2) 17%

Question 1

Agency Law Disclosure

Answer 1

Restatement of agency codes and cases which establish the conduct of real estate licensees. It is delivered to all parties in targeted sales and leasing transactions.

Question 2

Civil Rights Act

Answer 2

A federal law which provides broad protections to numerous classes of individuals in the united states against discriminatory activities.

Question 3

Conflict of Interest

Answer 3

When a broker or agent has a positive or negative bias toward a party in a transaction which is incompatible with the duties owed to their client.

Question 4

Contingency

Answer 4

A condition that needs to be met before escrow can proceed to closing.

Question 5

Conversion

Answer 5

The unlawful appropriation of another’s property, as in the conversion of trust funds.

Question 6

Dual Agency

Answer 6

The agency relationship that results when a broker represents both the buyer and the seller in a real estate transaction.

Question 7

Equal Credit Opportunity Act

Answer 7

A 1974 federal enactment prohibiting lenders from discriminating against borrowers from a protected class.

Question 8

Fiduciary Duty

Answer 8

That duty owed by an agent or trustee to act in the highest good faith toward the principal and not to obtain any advantage over their principal by the slightest misrepresentation, concealment, duress or undue influence.

Question 9

General Duty

Answer 9

The duty a licensee owes to non client individuals to act honestly and in good faith with upfront disclosures of unknown conditions which adversely affect a property’s value.

Question 10

Implicit Discrimination

Answer 10

Actions which are not openly discriminatory but yeild discriminatory results.

Question 11

Kickback

Answer 11

A fee improperly paid to an transaction agent who renders no service beyond the act of referring in exchange for a referral fee when the agent is already providing another service in the transaction for a fee.

Question 12

Licensed Activities

Answer 12

Dealing with members of the public to offer, contract for and render brokerage services for compensation.

Question 13

Misrepresentation

Answer 13

A false or misleading statement or assertion given to another to induce them to do something.

Question 14

Power of Attorney

Answer 14

A temporary authority granted to an individual to perform activities during a period of the owner’s incapacity or travel.

Question 15

Protected Group

Answer 15

A class of people who receive special protections against discrimination due to their distinguishing factors

Question 16

Real Estate Recovery Fund

Answer 16

Funds available to individuals who have obtained a final court judgment against a licensee and are unable to recover the judgment from the licensee. (aka Consumer Recovery Account)

Question 17

Referral Fee

Answer 17

A fee paid by one service provider to another for referring a client to them.

Question 18

Single Agency

Answer 18

The buyers agent who is paid their fee on a transaction by their buyer client, and does not fee split or otherwise share in the fee received by the seller’s broker.

Question 19

Unruh Civil Rights Act

Answer 19

California law which prohibits discrimination by a business establishment based on sex, race, color, religion, ancestry, national origin, or disability.