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Real Estate Test > Ky Real Estate Test Ch 1 part 2 > Flashcards

Ky Real Estate Test Ch 1 part 2 Flashcards

1
Q

Explain how KRS 324.281 was amended in 2017.

A

KRS 324.281 was amended to require that Kentucky REALTORS® supply this list within sixty days after a licensee Commissioner vacancy is created.

That list must contain no fewer than three (3) names of qualified candidates for each licensee vacancy on the Commission.

However, the list may contain more than three (3) names.

The governor may reject the list of three (3) names and request that a new list be submitted.

This new list must contain the names of at least three additional qualified candidates and be provided within sixty (60) days of the Governor’s request.

If Kentucky REALTORS® fails to submit a list within the sixty (60) day period, the Governor may immediately appoint a qualified person to fill the vacancy.

Each year the Commissioners elect a chairperson.

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2
Q

How much are Commissinoners paid

A

They are paid $300 per day of Official business, subject to a max annual compensation of $6000 plus actual and necessary expenses incurred in performing their duties as commissioners.

The Executive Director of the Real Estate Authority may reimburse the Commissioners and their staff for the expenses incurred in traveling to and from these meetings and other Commission events.

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3
Q

What does ARELLO stands for?

A

Association of Real Estate License Law Officials

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4
Q

Commissioners attend the monthly meetings for what organizations

A
  1. Association of Real Estate License Law Officials (ARELLO)
  2. Kentucky REALTORS
  3. Real Estate Educators Association
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5
Q

How long are commissioners are appointed for?

A

3 years

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6
Q

What are the reasons that Commissioners may be removed from their position.

A
  1. Incompetence
  2. Neglect of Duty
  3. Unprofessional Conduct
  4. Failure to adhere to the KREC code of Ethics
  5. If misses 3 consecutive meetings.
  6. Misses more than 25% of the meetings held over the previous 12 months
  7. If a licensee member ceases to hold a license
  8. If the consumer member acquires a license or a financial interest in the practice of real estate
  9. If a member ceases to be a bona fide resident of Ky
  10. If a Commissioner moves to a County where another Commissioner resides
  11. A Commissioner becomes a member of a political party tat three other Commissioners are members of.
  12. If a Commissioner is convicted of, pleads guilty to, or enters an Alford plea to a felony, they will be removed if the time for appealing the crime has passed or conviction has been affirmed by the Court of Appeals or Supreme Court.
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7
Q

D: Alford Plea

A

Means that the person charged with the crime does not admit to committing the crime, but acknowledges there is enough evidence to convict her/him of the crime.

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8
Q

Commissioners are appointed by the

A. Senate

B. Governor

C. KREC

D. KYR

A

B. Governor

he Governor appoints the Commissioners.

Six (are appointed from a list provided to the Governor by the Kentucky REALTORS® and the seventh is appointed at the discretion of the Governor.

The Senate has no part of the appointment process.

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9
Q

The maximum annual salary of a Commissioner is $_________ plus actual and necessary expenses.

A. $9,000

B. $15,000

C. $5,000

D. $6000

A

D. $6000

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10
Q

Commissioners must have been a resident of Kentucky for

A. ten years as a principal broker

B. ten years immediately prior to appointment

C. ten years while actively engaged in the real estate business

D. ten years while holding a broker’s license

A

B. ten years immediately prior to appointment

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11
Q

The maximum number of years a Commissioner can serve on the KREC consecutively is:

A

Commissioners serve for three (3) year terms and may only serve two (2) terms consecutively. So a total of 6 years.

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12
Q

Commissioners may be removed from office because

A. licensees do not like the decisions that are made in disciplinary matters

B. the Governor wants to appoint someone else

C. a consumer complains that he/she is not performing their duties

D. of moral turpitude

A

D. Of moral turpitude

Under the statute, a Commissioner can be removed for certain criminal activity and for moral turpitude.

Moral turpitude means conduct that is considered immoral.

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13
Q

Funds to operate the KREC are provided by _______ ____ of the state ________.

A

General Fund

Treasury

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14
Q

What does KRS 324.284 provides for KREC

A
  1. Hire Staff
  2. Rent office space
  3. Purchase furniture as needed
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15
Q

Who approves of the Kentucky Real Estate Commission (KREC) budgets and expenditures, including operating costs?

A

Executive Director of the KREC.

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16
Q

What fees may KREC charge to licensees?

A
  1. License Examination fee can’t exceed $100
  2. A broker & associate’s original and renewal license fees can’t exceed $30 per year
  3. Recovery Fund Fee that does not exceed $30
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17
Q

All licensees, except those licensed before _______

must complete continuing education classes each year.

A

June, 19,1976

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18
Q

The Continuing Education classes that are approved be the KREC are designed to?

A

Teach the licensees how to better serve the consumer in their day-to-day activities.

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19
Q

The KREC does not have jurisdiction over the activites of?

A

Community Association Management this includes

  1. Not-For-Profit associations
    Townhouse
    Condominium
    Homeowner and Neighborhood associations
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20
Q

True or False & Why

Commissioners are paid a $1,000 per month.

A

False

The Commissioners are paid at least $300.00 per day of official business, subject to a maximum annual compensation of $6,000.00

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21
Q

True or False & Why

Homeowner’s associations must have at least one person with a license on their Board of Directors.

A

False

Homeowner’s associations are not governed by the licensing laws and there is no requirement that these associations have employees or other staff with real estate licenses.

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22
Q

True of False

If you want to serve as one of the licensee Commissioners, you must be nominated by the Governor.

A

False

The KREC Commissioners are appointed by the Governor. The licensee members are chosen by the Governor from a list provided by the Kentucky REALTORS®. One is chosen by the Governor at his/her discretion.

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23
Q

True or False

A licensee must keep their license with them at all times in case a member of the public asks to see it.

A

False

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24
Q

True or False & Why

The staff of the KREC writes the test questions and administers the licensing examinations.

A

False

The KREC has contracted with PSI Services, LLC to conduct the examination testing.

PSI works closely with the State to be certain that examinations meet local as well as national requirements in basic principles and examination development standards.

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25
Q

True or False & Why

The primary duty of the KREC is to educate licensees.

A

False

The primary purpose of the KREC is to protect the consumer.

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26
Q

True or False & Why

Sharon is nosey and wants to find out about a KREC case where her competitor, Alfredo, was accused of wrong doing by a consumer. Once the case is over, she can request a copy of the file from the KREC.

A

True

Records are available to the public under the open records law of the Commonwealth and can be obtained by filling out an Open Records Request.

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27
Q

True or False & Why

All licensees must have continuing education classes, except those that are exempt.

A

True

All licensees, except those licensed before June 19, 1976, must complete continuing education classes each year.

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28
Q

True or False & Why

The maximum number of consecutive three (3) year terms that a Commissioner can serve is three (3).

A

False

The maximum number of consecutive three (3) year terms that a Commissioner can serve is two (2).

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29
Q

Explain the Real Estate Education, Research and Recovery Fund.

A

This Fund is designed to pay a consumer (the aggrieved party) who has been financially damaged by fraudulent activity of a real estate licensee.

The aggrieved party must file a claim against the licensee within one (1) year (previously was two years, as provision went into effect on June 26th 2019) of actual knowledge of the fraudulent activity or from the time when the circumstances should have reasonably put the aggrieved party on notice of the activity.

This time period is known as the statute of limitations.

If the licensee has refused to pay the damages and the Fund has had to pay, the licensee’s license shall be suspended and may be revoked until the amounts paid, plus 10% interest per annum, are repaid.

When the Fund pays the aggrieved party, the aggrieved party assigns his/her right to damages to the KREC.

The KREC can then proceed to collect the money from the licensee and can challenge the licensee if he/she tries to bankrupt the debt.

Each licensee pays a biennial fee not to exceed $60 upon license renewal that becomes part of the Fund.

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30
Q

the Real Estate Education, Research and Recovery Fund must have at least what amount of $?

A

$400,000

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31
Q

What is the Max the KREC can pay to any one claimant from the Real Estate Education, Research and Recovery Fund?

A

Is $20,000 and the aggregate for any one licensee is $50,000

32
Q

How does the payout from the Real Estate Education, Research and Recovery Fund work?

A

The maximum the KREC can pay to any one claimant is $20,000 and the aggregate for any one licensee is $50,000. If a licensee has committed fraud against three consumers and each has been awarded $20,000, the fund will not pay the full amount to each, because the total it can pay for that one licensee is $50,000. Each consumer would receive 1/3 of the $50,000 and not $20,000.

33
Q

How is money in the Real Estate Education, Research and Recovery Fund is used?

A

Money in the real estate research, education, and recovery fund in excess of the $400,000 may be used for educational purposes.

34
Q

What are the two ways complaints against licensees start?

A
  1. Formal written complaint filed by a consumer or other licensee.
  2. When KREC or one of its staff initiates and investigation against the licensee.
35
Q

How is investigations initiated by the KREC?

A
  1. If the legal staff or one of the Commissioners receives information that a licensee is violating a license law or regulation, an investigation may be ordered by the Commissioners.

When the information is received, if it is sufficient to raise concern that a consumer or consumers may be in jeopardy because of licensee behavior, an investigation is opened.

  1. is the investigation that must be initiated if a Verified Complaint that sets forth a prima facie case of a violation is filed with the KREC.
36
Q

D: Verified Complaint

A

Is one that is written, signed, and notarized. In both the license law and practice, many times the verified complaint is simply referred to as the complaint.

When the word appears in the statute, you can assume it means verified complaint.

The Complaint does not have to prove the facts; it only has to state facts that, if taken as true, show that the law or regulation has been violated.

37
Q

Ture or False & Why

An investigation cannot be conducted unless there is a formal written complaint filed.

A

False

An investigation can be conducted without a formal written complaint.

38
Q

Ture or False

The principal broker is responsible to adequately supervise affiliates.

A

True

39
Q

Ture or False & Why

The statutory mandate for the KREC is to be available to assist licensees when they have questions.

A

False

The statutory mandate for the KREC is to protect the public.

40
Q

Ture or False & Why

Due process is a constitutional right.

A

True

Due process is our constitutional assurance that each of us will be treated the same in a court proceeding, have the opportunity to confront our accusers, and have the right to present evidence.

41
Q

Ture or False & Why

A verified complaint is one that is typed.

A

False

A verified complaint is one that is written, signed, and notarized.

42
Q

Ture or False & Why

The KREC is known as an administrative agency.

A

True

It is known as an administrative agency, a regulatory agency, and a licensing agency.

43
Q

Ture or False & Why

A prima facie complaint is one that alleges a license law violation.

A

True

A prima facie case is one that appears “on its face” to have been a violation of the licensing law.

44
Q

True or False & Why

The KREC investigator must have a court order to review the principal broker’s records.

A

False

The KREC may compel the principal broker to make records available to the KREC investigator.

45
Q

True or False

The KREC has four Commissioners.

A

False

46
Q

What must a complaint state?

A
  1. the name of the licensee and his/her principal broker
  2. any damages being claimed would need to be indicated on a separate sheet, with a copy of each and any receipt, estimate, or other evidence of damage.
47
Q

How long does the Complainant have to fix their complaint if it is found not to have prima facie?

A

They have 10 days to revise and supplement the complaint.

48
Q

D: Sworn Supplement to Complaint.

A

The form used to supplement the Complaint.

49
Q

The Response from the Respondent must include a copy of what?

A

(1) listing contract;
(2) purchase contract;
(3) seller’s disclosure of property condition form;
(4) agency disclosure statement (or agency consent agreement);
(5) guide to agency relationships;
(6) settlement statement (this form is also known as a closing statement).

50
Q

A ___________ must be included on the Response and all future documents filed in the case. Each party in the case must receive a copy of all documents that another party files.

A

Certificate of Service

51
Q

A complaint filed with the KREC must include all of the following EXCEPT

A. alleged facts showing a license law violation occurred.

B. written statement.

C. respondent’s license number.

D. notarized signature of complainant.

A

C. Respondent’s License Number

52
Q

When the respondent files the written verified response all of the following must be included with the response EXCEPT a copy of the

A. sales contract.

B. listing contract.

C. agency consent agreement.

D. commission check received at closing.

A

D. Commission Check Received at Closing

The Respondent does not have to send a copy of the commission check, but must include a copy of the listing contract, the purchase contract, sellers disclosure of property condition form, the agency consent agreement, the guide to agency relationships and the closing statement.

53
Q

The KREC can hold an emergency hearing in a case involving alleged

A. licensee fraud.

B. escrow account violations.

C. principal broker misconduct.

D. sexual abuse.

A

B. escrow account violations.

The only time an emergency hearing can be held by the KREC is for allegations of escrow account violations. Allegations of sexual abuse, and licensee fraud that rise to a criminal level may be referred to the proper authorities, but these allegations do not allow for an emergency KREC hearing.

54
Q

The Commissioners are appointed by the Governor from a list submitted by

A. KREC

B. KYR

C. LBAR

D. NAR

A

B. KYR

The Kentucky REALTORS® (KYR) submits a list of at least three (3) names to the Governor for each commissioner vacancy.

55
Q

If a licensee misrepresents facts on a sworn statement the

A. licensee may be prosecuted for perjury.

B. aggrieved party may be awarded punitive damages.

C. principal broker may have his/her license suspended.

D. KREC can revoke his/her license in an emergency hearing.

A

A. licensee may be prosecuted for perjury.

It is critical that licensees never sign a sworn statement unless the facts in the statement are 100% true. The license law provides that the KREC can seek a criminal indictment for perjury if facts are misrepresented in a sworn statement.

56
Q

Once the investigation is complete the investigator files his/her report and the Commissioners may do all of the following EXCEPT

A. order a formal hearing.

B. assess a fine of up to $1,000 against the licensee.

C. negotiate a voluntary settlement with the respondent.

D. dismiss the complaint if there doesn’t appear to be a license law violation.

A

B. assess a fine of up to $1,000 against the licensee.

A fine cannot be assessed until a formal hearing is held or the licensee enters into a voluntary settlement agreement.

57
Q

If a KREC complaint is filed and it does not make out a prima facie case, the KREC will

A. send the complaint to be investigated.

B. give the complainant ten (10) days to revise and supplement the complaint.

C. contact the complainant and schedule an appointment to meet with the complainant to assist in completing the form correctly.

D. dismiss the complaint.

A

B. give the complainant ten (10) days to revise and supplement the complaint.

58
Q

When the respondent is notified that a complaint has been filed, the respondent must

A. file a verified response within 20 days.

B. contact the complainant and work out a settlement.

C. hire an attorney to answer the complaint.

D. notify KYR that the complaint has been filed.

A

A. file a verified response within 20 days.

The licensee must file a verified written response within twenty (20) days of receiving the Complaint using the KREC Sworn Answer Complaint form. Respondents may hire legal counsel, but are not required to do so. Respondents may also contact the complainant directly to discuss the matter, but still must file the written verified response if the complainant does not withdraw the complaint.

59
Q

D: Party Status

A

means that the Complainant can actively participate in the case with the goal of receiving monetary damages from the Respondent.

60
Q

D: Findings of Fact

A

Is a written statement of what the Hearing Officer believes to be the actual facts presented.

61
Q

Once the Executive Director makes his/her final decision and enters the Order, the Complainant or the Respondent has how many days to file an appeal.

A

The Complainant or Respondent has 30 days to file an appeal.

62
Q

D: Staying (Stayed)

A

Court Order will not take effect until the decision of the Executive Director’s decision.

63
Q

If the Order does not state that the discipline will be stayed, the Respondent must make a ____.

A

Motion

64
Q

D: Motion

A

Is a request to the Court asking the judge to either allow a party to take an action or to prevent a party from taking an action.

65
Q

What are the Sanctions that may be imposed against the licensee are one or more of the following:

A

1) Suspension of the license for a set time period, depending on the severity of the violation;
2) Revocation of the license for a minimum period of five (5) years;
3) Fine not to exceed $1,000;
4) Licensee probation for a period of up to twelve (12) months;
5) Completion of additional continuing education class hours;
6) Issuing a formal or informal reprimand.

66
Q

True or False & Why

A complainant will only be given party status if the Commissioners believe fraud may have been committed.

A

True

If the Commissioners believe that the investigator’s report shows that fraud may have been committed, the complainant is given party status.

If the Commissioners believe that a license law violation may have occurred, but fraud was not committed, the case proceeds without the complainant having party status.

67
Q

True or False & Why

If a party is unhappy with the outcome of the case after a hearing, the case may be appealed to Jefferson Circuit Court.

A

False

The case is appealed to the circuit court in the county where the respondent has his/her principal place of business.

68
Q

True or False & Why

If the principal broker’s license is suspended or revoked the licenses of all affiliated licensees will be inactive until he/she places his/her license with a new principal broker.

A

True

The licensees must move their licenses to a new principal broker.

They can do so without charge as long as it is in the same year in which the original license was granted.

69
Q

True or False & Why

Mediation is attempted before the hearing is held.

A

True

Mediation is an option but is not required. Mediation is a voluntary process.

70
Q

True or False & Why

Once filed, a complainant may not withdraw the complaint.

Hint: Within the 20 days of filing a complaint

A

False

A complainant may withdraw his/her complaint if the withdrawal is made within twenty (20) days after the complaint was filed and the respondent has not filed the verified response.

If the time has passed and if the complaint has been answered, the complaint can only be withdrawn with the permission of the of the KREC.

71
Q

True or False & Why

The Executive Director of the Kentucky Real Estate Authority, and not the Hearing Officer, makes the final decision in the case.

A

True

Although the hearing officer hears the case, writes findings of facts and conclusions of law, and makes a recommendation on discipline, the Executive Director makes the final decision.

72
Q

True or False

After a hearing, if the Executive Director decides that a violation occurred, a fine of $5,000 may be imposed.

A

False

73
Q

True or False & Why

If a license is revoked, the licensee may automatically apply for a new license at the end of five (5) years.

A

False

Licenses are revoked for five (5) years, but the licensee cannot automatically apply for a new license.

The Commissioners must give the licensee permission to apply for a new license.

74
Q

True or False & Why

If the licensee’s license is suspended after a hearing, he/she may only broker real estate with the assistance of his/her principal broker.

A

False

If the license is suspended, the licensee cannot broker real estate during the period of suspension.

75
Q

True or False & Why

The KREC legal counsel represents the Complainant at the hearing.

A

False

At the hearing, the Complainant is not represented by the KREC attorney. However, the KREC attorney will assist the complainant in presenting his/her evidence, will discuss the case with the Complainant, will accept written questions to be asked by the attorney, and will examine all witnesses called by the Complainant.

Real Estate Test (30 decks)

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