Ky Real Estate Exam Ch 5 Part 1 Flashcards
D: Adequate Supervision
A term used in the real estate license law that requires the principal broker to supervise his/her affiliated associates when they are performing licensed activities to assure they are following the licensing law.
D: Agency Consent Agreement form
A form mandated by the real estate licensing law must be completed by licensees notifying buyers and sellers of agency relationships.
There is a buyer’s form to be completed by the selling agent when he/she writes an offer for the buyer, and a seller’s form to be completed by the listing agent at the time of listing and then updated when he/she presents an offer to the seller.
D: Business Relationship
As defined by the license law, this is a relationship whereby a licensee and a party are, or have been, in an ongoing business relationship, including any prior representation by the licensee in a real estate transaction.
D: Client
The party in an agency relationship, also referred to as the principal, is represented by the agent.
D: Comprehensive Listing
In the license law, and in the Uniform Residential Landlord-Tenant Act, this refers to a list of all defects in the property that exists at the beginning and again at the end of the occupancy.
This list is used to determine the amount of security deposit that may be held by the landlord for the damage created by the tenant during the lease.
D: Consumer
Pursuant to the license law, this means a person or entity with whom a licensee exchanges information that is public in nature but otherwise does not perform acts of real estate brokerage and with whom no written or oral agency agreement or fiduciary relationship exists.
D: Delivery
This term is used in numerous contexts in real estate law.
The term may be used to indicate that a written document has actually been delivered to a person as required by the licensing laws.
Examples of this delivery include delivering the sellers disclosure of property condition form (KRS 324.360), delivering the Agency Consent Agreement form ( 201 KAR 11), and the delivery of all forms signed by a party in a real estate transaction (201 KAR 11).
Actual delivery of documents in other real property contexts requires that certain documents be delivered from one party to the other to consummate the transaction.
These situations require the grantor to deliver the deed to the grantee to convey title, and the mortgagor to deliver the mortgage to the mortgagee to convey a lien interest.
D: Exclusive Agency
An agency relationship created in the listing contract in which the seller lists the property with one broker and agrees to pay a commission to that broker for selling the property but retains the right to sell the property himself/herself.
If the seller sells the property the broker is not paid a commission; however, if the broker sells the property then the seller would be required to pay a commission.
D: Express Agency
An expressed agreement, either oral or written, in which the principal and agent agree to create an agency relationship.
This is the opposite of an implied agency, which is created by the actions of the agent.
D: Family Relationship
Under the licensing law, no known familial relationship between a license and a party to the transaction.
D: Implied Agency
An agency relationship created by the actions of the agent.
Opposite of an express agency that is created by agreement of the principal and agent.
D: Kentucky Uniform Residential Landlord and Tenant Act
This statute, KRS 383, sets forth regulations that must be followed by landlords in residential rental situations.
The law applies only in the counties/cities in Kentucky that have actually adopted the statute.
However, the licensing laws have incorporated the provisions relating to security deposits into the license law.
A licensee managing or owning residential real estate must comply with KRS 383.580 even if the county/city where the property is located has not adopted the statute.
D: Personal Relationship
A relationship defined in the license law is a platonic or non-platonic friendship between a licensee and a party to the transaction.
D: Property Management
The license law defines property management very broadly and requires a license for all activities where a person manages property they do not own.
The statute states that property management is the overall management of real property for others for a fee, compensation, or other valuable consideration, and may include the marketing of property, the leasing of property, collecting rental payments on the property, payment of notes, mortgages, and other debts on the property, coordinating maintenance for the property, remitting funds and accounting statements to the owner, and other activities that the commission may determine by administrative regulation.
D: Property Management Agreement
The license law requires a written property management agreement between the principal broker and property owner.
The requirements of the property management agreement are outlined in detail in 201 KAR 11.
D: Prospective Client
Pursuant to the license law this means a person or entity who has not entered into a written or oral agreement with a principal broker to provide real estate brokerage services, but to whom a licensee offers real estate brokerage services or from whom a licensee receives confidential information related to a contemplated real estate transaction.
D: Security Deposit
Money deposited with the landlord to secure the landlord against financial loss due to damage of the premises occasioned by the tenant’s occupancy, other than ordinary wear and tear.
The money is not to be used for unpaid rent without the tenant’s agreement, and must be returned to the tenant at the end of the lease if there is no damage to the property. Under the Uniform Residential Landlord and Tenant Act, there are specific provisions regulating security deposits.
D: Transaction Broker
A relationship provided in the license law permits the licensee to perform certain work for a buyer and seller without the licensee representing either party.
D: Transactional Brokerage
means a form of brokerage service or services provided to either or both parties to a transaction if the licensee owes to the parties only the duties owed to a consumer and if confidential information is not relayed between the parties by the licensee unless so directed by the sending party.
D; Principal
AKA: Client
Is the individual who retains the services of an agent and who authorizes the agent to work on his/her behalf.
Principals may be non-individuals, such as corporations, limited liability companies, churches and governments.
It is important for the agent to know exactly whom he/she represents so as not to get into a conflict of interest.
What is the difference between Principal and Principle?
A principal is a person who hires an agent.
The principle is a rule.
D: Agency
Is the fiduciary relationship between a principal and agent.
D: Fiduciary
Is the person who owes the principal fiduciary duties and is held in a position of special trust and confidence by the principal.
D: Consumer
Is the third party in the agency relationship who is not represented.
Although not represented, the consumer is entitled to be treated fairly and honestly.
An agent may do certain tasks for the consumer but should make clear to the consumer that the agent is not the agent for the consumer.
It is the duty of the agent to make it clear!
The agent works with, but not for, the consumer, while the agent works for the client.
True or False
Adrian and Ralph asked Donna to show them one of her listed properties. When Donna showed them the property, she automatically became their agent.
False
Agency relationships are not automatically created.
True or False
The agent has an affirmative duty to make sure the unrepresented party in a
transaction understands that he is unrepresented.
True
The agent should make sure the parties are clear on their agency relationships in a transaction.
True or False
Agents owe fiduciary duties to everyone in the transaction.
False
Agents owe fiduciary duties to their clients.
True or False
The principal is a customer.
False
The principal is the client.
True or False
An affiliate has an agency relationship with her principal broker.
True
The principal broker is the principal and the affiliate is the agent in the agency relationship between the principal broker and the affiliate.
True or False
Agents must be fair and honest with consumer.
True
Agents must be fair and honest with consumers, although they do not owe them fiduciary duties.
True or False
Vivian, the listing agent, told Beth she would help her get the lowest purchase price for the property. That might make Beth think Vivian was her agent.
True
True or False
Agency relationships are consensual.
True
A principal has to agree to be represented and the agent has to agree to represent the principal.
True or False
Compensation paid by the principal determines whom the agent is representing.
False
One party may pay an agent to represent another party. In real estate transactions, the sellers often pay both the seller’s agent and the buyer’s agent.
True or False
Actions cannot create agency relationship.
False
Implied agency relationships are created through actions of the principal and agent.
True or False
A transaction broker is an agent.
False
A transaction broker is a middleman who is a non-agent.
True or False
The statute of fraud states how long a person has to file a lawsuit.
False
True or False
A consumer is the third party who is not being represented by the agent.
True
The unrepresented party is the consumer and the represented party is the client.
True or False
Agency relationships must be created in writing.
False
Agency relationships can be created orally or by actions.
True or False
A listing contract is an example of an express agency.
True
It is a written express agency.
D: Confidential Information
A. information received or sent, verbally or in writing including transaction paperwork and files, by a licensee, that may materially compromise the negotiating position of a client or prospective client.
B. Confidential information includes information that is not required to be disclosed by law.
- Is provided to a licensee by a client or prospective client to a real estate transaction
- Describes or affects the client or prospective client’s bargaining position or motivation
- Is designated in writing as confidential by the client or prospective client.
D: Universal Agent
Is granted power to do anything in the principal’s name that the principal can do for himself/herself.
This agency is normally created with a general power of attorney and continues until revoked.
D: General Agents
When acting as a general agent, an agent is given a broad range of authority to act for his/her principal until the end of the contract.
General agents run the day-to-day activities for the company’s owner and can bind their principals to contracts.
Affiliates are general agents for their principal brokers and property managers are general agents for the owners of the property.
Because affiliates are general agents of the principal broker, principal brokers need to make it clear to the affiliates what the affiliates are authorized to do on behalf of the principal broker and the real estate brokerage.
D: Limited Agents
AKA: Special Agents
Real estate agents are special agents, also referred to as limited agents to their client.
This is an agency relationship for a limited purpose.
Their representation and authority is limited to one specific act or business transaction, usually the listing contract or buyer agency contract.
Real estate agents cannot bind their clients to contracts.
Licensees cannot sign offers for their clients who have accepted an offer over the telephone.
D: Single Agency
In a single agency relationship, the agent has only one client.
The agent represents either the buyer or the seller, or in a property management situation, either the landlord or the tenant.
Fiduciary duties run only to one principal in a single agency situation.
D: Seller Agency
If the agent is the agent for the seller, this is known as seller agency.
D: Buyer Agency
If the agent is the agent of the buyer, this is buyer agency.
D: Designated Agency
The principal broker always has the choice regarding what type of agency relationships may be created in his/her office.
If the principal broker chooses a designated agency, he/she designates one agent in the company to represent the buyer and one agent to represent the seller, KRS 324.010(14).
If a designated agency is used, the broker and his/her designated manager, if there is one, remain dual agents in the transaction.
As a dual agent in the designated agency situation, the principal broker and his designated manager, if there is one, must keep all client information confidential.
Clearly, the key to designated agency is the confidentiality element.
The principal broker has the duty to have processes in place that will assure confidentiality.
A licensee must disqualify himself/herself from being appointed a designated agent if he/she learns confidential information.
Even if a transaction starts out as a designated agency, the agent could end up being a dual agent if that licensee themselves had both the buyer and the seller in the transaction.
A licensee should advise their client of this possibility at the beginning of the representation.
If the principal broker chooses to use a designated agency in his/her office, the principal broker must inform the affiliates of the designation procedure.
Each client must consent to have a designated agent.
This type of agency is not used in many areas outside of Lexington, Louisville, and northern Kentucky.
When does a Real Estate Agent have to deliver “A Guide to Agency Relationships” to a prospective client?
- Prior to entering into a contemplated written agreement to provide real estate brokerage services for compensation with a prospective client.
- Prior to entering into a contemplated oral agreement to provide real estate brokerage services with a prospective client.
- Prior to signing an agency consent agreement.
D: Prospective Client
Means a person or entity who has not entered into a written or oral agreement with a principal broker to provide real estate brokerage services, but to whom a licensee offers real estate brokerage services or from whom a licensee receives confidential information related to a contemplated real estate transaction.
What methods count as Delivery
- Facsimile Transmission
- Electronic Mail
- Hand
- Other legal means.
True or False
You mark “business relationship” on the Agency Consent Agreement form because you are in the real estate business.
False
Business relationship” relates to a current business relationship or a past real estate transaction.
True or False
A Guide To Agency Relationships is given to clients.
False
It’s given to prospective clients.
True or False
If you are acting as a dual agent and you go to church with the seller, you must always disclose that information to the buyer on the Agency Consent Agreement form.
False
Be careful with the word “always” in this question. If you go to a really large church you may not have a personal relationship with the seller; however, if you go to a church with 30 people it is more likely that you will.
Each time you are acting as a dual agent, you must consider whether or not your relationship will make you biased in favor of one client over the other client.
True or False
If dual agency exists, a personal relationship must be disclosed on the Agency Consent Agreement form.
True
If the licensee is acting as a dual agent, he/she must disclose a personal relationship with either the buyer or seller.
True or False
A Guide to Agency Relationships may be sent by email.
True
True or False
On the Agency Consent Agreement form you mark “family relationship” only for immediate family.
False
“Family” relationship is not limited to immediate family only.
True or False
When you sell your own listing, you will always be a dual agent.
False
There’s that word again – “always.” It is likely you will be a dual agent when you sell your own listing, but it is not “always.”
True or False
Licensees must ask the consumer to sign A Guide to Agency Relationships and if the consumer refuses, the licensee cannot work with the consumer.
False
It is true that the licensee must ask the consumer to sign A Guide to Agency Relationships, but it is false that if the consumer refuses to sign the form the licensee cannot work with the consumer. In that case, the licensee should deliver the form to the consumer and make a note on the file copy that the consumer refused to sign the form.
Prior to entering into a written agreement to provide real estate brokerage services or completing, or directing the completion of, a contract, offer, or lease for a real estate transaction, what does the real estate agent need to do?
- The licensee shall complete and deliver the Agency Consent Agreement to the prospective client
- Seek and obtain written consent to the Agency Consent Agreement from the prospective client.
How many parts of the Agency Consent Agreement must be completed by the real estate agent?
1 part
Explain the 4 parts of the Agency Consent Agreement.
Part 1. is to be completed if the transaction involves two different brokerages. If Part I of the form is appropriate, the only thing to fill out on the form is the agent’s name, the brokerage name, and the principal broker’s name.
Part 2. is the appropriate section if the transaction involves two agents in the same brokerage. At this point, you must know if your brokerage practices designated or dual agency. Obviously, if two agents from the same brokerage are involved in the transaction, it will be an in-house transaction. If the office practices designated agency, the box under “Designated Agency” is checked and the name of the agent representing the buyer and the name of the agent representing the seller will be written in the blank, along with the brokerage.
If dual agency is being used in the transaction, the box under “Dual Agency” is marked and the names of the agents are written in the blank. This is the section that calls for an explanation of any personal, family, or business relationship that might exist. The licensee should write the information on the blank lines. There have been complaints that the lines are too small. Remember, disclosure is the purpose. If you need to do so, write in the margins. Don’t fail to disclose because the lines are too small!
Part 3. is for transactions involving only one licensee. In this event the licensee will either be a dual agent, seller’s agent, or buyer’s agent. The agent’s name should be filled in with the name of the brokerage. If the licensee is selling his/her own listing, it is likely that the licensee will be a dual agent. In that case, the block should be marked and the personal/family/business question should be answered.
It is possible that the licensee is not a dual agent. If the licensee is selling a FSBO, he/she is likely a buyer’s agent. If so, that block would be marked. It could be that the buyer does not want representation and the agent is only representing the seller. In that case, the seller block will be marked. And, of course, it could be that the licensee is only completing the paperwork and is not representing anyone, which means the “neither” block would be marked. If the section paragraph of this form applies, the personal/family/business question does not need to be answered. Remember, that is only for dual agency relationships.
On some rare occasions an agent might not have any client and would act purely as a transaction broker. If that happens they would use section Part IV of the form.
Part 4. Part IV to act as a transaction broker puts themselves at risk. As a non-agent, or transaction broker, the agent only completes paperwork and does not give any real estate advice or representation. Although legal, this relationship can be a problem because real estate agents have a tendency to be too helpful and talk too much. Although some states allow the agents to locate property and give advice, that is not true in Kentucky. All the agent can do is complete the paperwork with information provided by the buyer and seller. At the point the agent starts giving information or advice, he/she has changed from the role of transaction broker to undisclosed agent. It may even be an undisclosed dual agency situation if he/she is talking and giving advice to both parties.
How long does the Real Estate Agent keep a copy of the Agency Consent Agreement?
5 years
What are the exceptions to the Agency Consent Agreement?
There are exceptions to the Agency Consent Agreement requirements for transactions involving auctions and commercial transactions. Although the forms are not required, an agency relationship between the agent and consumer should be discussed and created.
What duties are owed to a consumer?
- Good Faith
2. Fair Dealing
What duties are owed to a prospective client?
1, Good Faith
- Fair Dealing
- The duty of confidentiality
If the agent is the buyer where does it have to be disclosed at? If the agent is the seller where and how do they disclose that fact?
A close reading of the statute requires that when the agent is a buyer the writing has to be on the sales contract; however, when the agent is the seller, the disclosure has to be in writing, but not specifically on the sales contract.
A licensee who is acting for himself as either the buyer, seller, landlord, or tenant must inform the party that he is an agent representing himself/herself and not an agent for a third party. An agent working for himself/herself and not disclosing the status would be known as an “unknown principal,” which is a license law violation.
True or False
The first part of the Agency Consent Agreement form is for cooperative sales.
True
Part I is to be used when the property is listed by one brokerage and the offer is from a different brokerage.
True or False
Part II requires the agent mark either dual agency or designated agency.
True
Part II is the section of the form that relates to in-house transaction where two agents in the same brokerage are involved in the transaction.
True or False
You use the same Agency Consent Agreement form for the buyer and seller.
False
The form is specific to the client. You use one form for the buyer and one for the seller.
True or False
You can re-use the Seller’s Agency Consent Agreement for each offer, because the offers are all on the listed property.
False
True or False
When you have a married couple, only one of them needs to sign the Agency Consent Agreement form.
False
All sellers and buyers must sign the Agency Consent Agreement forms.
True or False
The unrepresented person in the transaction is known as the consumer.
True
The represented party is the client and the unrepresented party is the consumer.
True or False
Consumers are owed the same fiduciary duties as clients.
False
Consumers are not owed fiduciary duties.
True or False
If an agent is acting as a transaction broker, he/she marks “neither” in Part II.
False
True or False
Agency Consent Agreement forms are kept by the principal broker for three years.
False
Agency Consent Agreement forms must be kept for five (5) years.
True or False
The Agency Consent Agreement form is a three-part form and you must complete each section.
False
The Agency Consent Agreement is a four part form and you only complete one section and leave the other two blank.
What are the 3 tasks of a property manager?
- achieve the goals of the owners
- generate income
- preserve and increase the value of the property
D: Property Managent
The overall management of real property for others for a fee, compensation, or other valuable consideration, and may include the marketing of the property, the leasing of property, collecting rental payments on the property, payment of notes, mortgage, and other debts on the property, coordinating maintenance for the property, remitting funds and accounting statements to the owner, and other activities that the commission may determine by administrative regulation.
What are the 3 exceptions to the licensing requirements for property management?
- If the property manager receives the use of a rental unit as his/her primary compensation.
- if he/she is a regular employee of the owner or the broker who has the management contract.
- Is that the statute specifically excludes community association managers and the management or business activities of not-for- profit community associations, which includes townhouse, condominium, homeowner, or neighborhood associations.
D: Regular Employee
A regular employee is ‘an employee who works for an employer, whose total compensation is subject to withholding of federal and state taxes and FICA payments, and who receives from the employer a fixed salary governed by federal wage guidelines that is not affected by specific real estate transactions.”
The property management agreement shall contain?
- the business name and address of the licensee’s brokerage
- the name and address of the property owner
- the address of the property being managed
- the number of units being managed
- the beginning and ending dates of the agreement
- a provision stating whether or not there is an automatic annual renewal
- the method for early termination
- the amount of, and method for computing, licensee compensation
- the amount of, or method for determining, the minimum security deposit for each unit
- the name and address of the bank where the security deposits will be held
- the account number for account holding security deposits
- procedures for returning or retaining security deposits
- a statement of whether or not the property manager may pay expenses relating to managing the property
- date when the licensee will send an account to the owner
- a copy of the form lease
- certification by owner that he/she has received a copy of the agreement.
- signatures, with date, of all owners and the principal broker
What is the difference between a property management agreement and a listing contract?
The lease that is attached to the management agreement must contain the name and address of the bank where the security deposit is being held, the security deposit account number, and the provisions for retaining or returning the security deposit.
True or False
The license law requires that compensation for property management be based on a per unit amount.
False
The license law requires the property management agreement to include a compensation provision, but the law does not indicate in any way how the compensation will be determined. As discussed throughout this class, the principal broker decides all compensation issues without input from any other broker or the KREC. To do otherwise, would be a violation of the anti-trust laws.
True or False
Kentucky license law gives specific instruction on what items must be included in the property management agreement between the owner and principal broker.
True
True or False
The property management agreement must have attached a copy of a lease authorized by the owner.
True
In addition, the name of the bank and account number where the security deposits are to be held must be included.
True or False
Like the listing contract, all owners must sign the property management agreement for it to be enforceable.
True
The Statute of Frauds applies to the property management agreement.
Additionally, the license laws on advertising state that a property cannot be publicly promoted without the written permission of all of the owners.
True or False
There are exceptions to property managers being required to have a real estate license.
Ture
One is a property manager who is the regular employee of the owner or the broker who has the management contract; another is a property manager who receives the use of a rental unit as his/her primary compensation.
True or False
The property management agreement is between the owner and the affiliate who is managing the property.
False
The property management, like the listing contract, is an agreement between the property owner and the principal broker, not the affiliate.
True or False
Property management involves only leasing property and collecting the rents.
False
Property management includes many tasks are that performed for rental property that does not belong to the licensee.
True or False
Property owners must receive a copy of the agreement once it is signed.
True
The license law requires that a copy of signed documents be given the person signing the document immediately upon being signed. This law applies to property management documents, as well as documents used to list and sell property.
True or False
A property management agreement may not automatically renew and must be extended at the end of the year.
False
Unlike listing contracts, a property management agreement may contain an automatic renewal clause.
True or False
A property manager automatically has the authority to spend up to $500 for repairs without approval from the owner.
False
The property management agreement must provide whether or not the property manager may pay expenses relating to the property.
Money received by the property manager on behalf of the owner must be deposited
A. with undue delay.
B. monthly.
C. immediately.
D. without unreasonable delay.
D. without unreasonable delay.
Without unreasonable delay, which is defined by the license law to be within three (3) business days.
At the termination of the property management agreement, the property manager has how many days to send the owner a final accounting.
60 Days
Property managers must provide an accounting to the owner on a ,what basis?
Monthly Basis
Under the Uniform Residential Landlord Tenant Act, the security deposit
A. must be equal to at least one month’s rent.
B. must be kept in a separate security deposit account.
C. should not be returned until the landlord receives a demand from the tenant.
D. may be used for rent.
B. must be kept in a separate security deposit account.
Under the Uniform Residential Landlord Tenant Act, the lease must contain
A. the number of children who will live in the house.
B. an automatic renewal.
C. the name of the bank and the account number where the security deposit is held
D. a termination clause allowing termination for a penalty of no more than two (2) month’s rent.
C. the name of the bank and the account number where the security deposit is held
The Uniform Residential Landlord Tenant Act requires the tenant be notified of the name of the bank and the account number where the security deposit is being held.
An employee, who does not have a real estate license, is managing property for the employer. Which of the following is true?
A. The employee may opt to pay his federal and state income tax instead of having the employer withhold them, because he does not have a real estate license.
B. The employee must be paid wages that cannot be based on the number of units rented.
C. The employee may be paid for units rented.
D. The employee must get a real estate license without delay.
B. The employee must be paid wages that cannot be based on the number of units rented.
In order for the employee to fall under the non-licensed exception for acting as a property manager, the employee cannot be paid per unit and must be wages regardless of units rented. The employer must also deduct federal and state income tax and must pay social security and unemployment taxes.
Ture or False
Principal brokers may or may not require their affiliates to manage their rental property through the brokerage.
True
The principal broker may require affiliates to handle personal rental property through the brokerage, or they may agree that the affiliate can manage his/her rental property outside the brokerage.
Ture or False
Licensees, managing their personally owned real estate, must disclose in any contract they sign, that he/she has a real estate license, even if the license is in escrow.
True
Ture or False
The E&O insurance may not cover property management activities for the licensee’s personal real estate.
True
Licensees, who have personal rental property that they manage, should check with their E&O insurance carrier to see if they have coverage for property management activities for their personal real estate.
Ture or False
Principal brokers must adequately supervise their affiliates and that includes property management activities.
True
The principal broker’s duty to adequately supervise extends to the affiliate’s property management activities.
Ture or False
When a licensee advertises his/her personal rental property that is not listed with the principal broker, he/she must state in the advertisement that he/she has a real estate license.
False
If the rental property is not listed with the principal broker, the affiliate who owns the property is not required to advertise owner/agent. However, the affiliate must indicate in the lease that he/she has a real estate license.
Ture or False
Security deposits are for damage to property beyond normal wear and tear, and not for unpaid rent.
True
Security deposits cannot be kept for unpaid rent unless the tenant agrees, or the tenant leaves owing rent and does not demand within thirty (30) days that the security deposit be returned.
Ture or False
A principal broker with a property management division in the brokerage must have property management funds in a separate escrow account or clearly state which funds in the regular escrow account are for property management activities.
True
It must be clear which escrow funds are for the general brokerage and which ones are for property management activities.
Ture or False
A principal broker can never be liable for actions of his affiliate when the affiliate is managing his/her own rental property.
False
The license law says the principal broker must adequately supervise his/her affiliates. It does not limit that requirement. And if the affiliate misleads the consumer into believing the principal broker is involved in the property management, the principal broker may have liability. As we discussed thorough-out the whole course, if you see the word “never” be very careful with your answer. In real estate, most things are “never” never!
Ture or False
License law relating to advertising applies only to property listed for sale.
False
License law and regulations relating to advertising apply to all advertisements placed by a brokerage, principal broker, and affiliates, regardless of the type of property or type of transaction.
Ture or False
For a principal broker to enforce his/her right to collect a property management fee, because of Kentucky Uniform Residential Landlord Tenant Act the property management agreement must be in writing.
False
True or False
Kentucky license law requires a final accounting to the owner within 60 days after the end of the management agreement.
True
During the term of the property management agreement, a monthly accounting, per unit, must be provided the owner.
True or False
Money belonging to others received by the principal broker must be deposited into his/her escrow account within five (5) business days.
False
Money must be deposited “without unreasonable delay,” which is defined in the license law as three (3) business days.
True or False
Security deposits may be kept in the principal broker’s escrow account.
False
True or False
A property manager’s primary obligation is to please the tenants.
False
The property manager has a fiduciary duty to the owner, not the tenants.
True or False
Kentucky license law requires a written property management agreement between the owner and principal broker.
True
The agreement must be in writing and must be between the owner and the principal broker, not the affiliate.
True or False
A property manager may spend up to $500 for repairs without the owner’s permission under Kentucky license law.
False
The property management agreement between the owner and principal broker must spell out specifically if the property manager can spend any money without the owner’s permission.
True or False
Property management records must be kept by the principal broker for three (3) years.
False
Like brokerage records, property management records must be kept five (5) years.
True or False
The property management agreement is between the owner and the principal broker.
True
A property management agreement is like a listing contract. Although the affiliate may be working directly with the owner, the agreement is with the principal broker.
True or False
Security deposits are not rent.
True
Security deposits are to pay for damage to property that occurred during the tenant’s occupancy that were beyond normal wear and tear.
True or False
Under Kentucky law, a copy of the lease must be attached to the property management agreement.
True
That is one of the requirements in the license law outlining what must be included in a property management agreement between the owner and principal broker.
True or False
Under the Kentucky Uniform Residential Landlord Tenant Act a comprehensive listing of any defects in the property must be prepared prior to the tenant moving into the property.
True
The form commonly referred to as the “walk-through checklist” must be prepared prior to the tenant’s occupancy and used when the tenant moves out to compare changes in the property for the purpose of deducting amounts for repairs from the security deposits.
True or False
In Kentucky, the property management agreement must have a beginning date and ending date and may not contain an automatic extension clause.
False
The agreement must have a beginning and ending date, but it may also contain an automatic extension clause.
True or False
The Kentucky license law requires a monthly accounting for each unit managed even if the same owner owns them all.
True
A monthly accounting for each unit, regardless of the owner, is required.
True or False
If a licensee is managing property in Kentucky, the security deposit provisions of the Kentucky Uniform Residential Landlord Tenant Act applies to all property being rented, even if the county has not adopted the Act.
True
True or False
Kentucky licensees must follow the security deposit provisions of the Uniform Landlord Tenant Act even if they are managing property in a county where it has not been adopted.
True
This is also true if they are managing their personal real estate.
