Ky Real Estate Test Ch 2 Flashcards
1
Q
D: Academic Credit Hour
A
As used in real estate license law means (1) college semester hour or sixteen (16) fifty (50) minute classes. Most college classes are three (3) hour courses.
2
Q
D: Accredited College/University/Institution
A
Defined in the licensing law as a college or university that has met the criteria of the appropriate educational accrediting association, such as the Southern Association of Colleges and Schools, and the Commonwealth of Kentucky to award either associate, baccalaureate, graduate, or professional degrees.
3
Q
D: Administrative Agency
A
Governmental agencies that regulate a certain industry. The Kentucky Real Estate Commission (KREC) is an administrative agency.
4
Q
D: Affiliate
A
A sales associate or broker associate that works as an independent contractor for a real estate brokerage.
5
Q
D: Affiliated Agents
A
Real estate licensees that are associated with a particular real estate brokerage and the principal broker is said to “hold” their licenses.
Principal brokers may not charge licensees to be affiliated with their office.
6
Q
D: Affiliation Fee
A
The fee that is charged by a principal broker to licensees that have their licenses with her office.
This fee is prohibited by the license law.
7
Q
D: Alford Plea
A
A plea that may be entered by a criminal defendant specifically stating that the defendant is not pleading guilty to the charges, but is acknowledging that the prosecuting attorney has enough circumstantial evidence to gain a conviction.
8
Q
D: Approved Courses
A
Pre-license and continuing education classes that are approved by the Kentucky Real Estate Commission based on criteria set forth in the licensing law and regulations.
9
Q
D: Approved Instructor
A
A person who has been approved by the Kentucky Real Estate Commission to teach pre-license classes, continuing education classes, and the Kentucky Core Class. The criteria on which approval is based is found in the license law and regulations.
10
Q
D: Approved Real Estate School
A
A school that has been approved by the State Board of Proprietary Education, or other regulatory body, and the Kentucky Real Estate Commission.
Approval is required before the school may offer pre-license classes, continuing education classes, and the Kentucky Core Class.
11
Q
D: Attorney-in-Fact
A
When a person is appointed under a power of attorney, they are known as the attorney-in-fact. Generally, most people refer to themselves as the “power of attorney;” however, the proper term is attorney-in-fact.
12
Q
D: Branch Office
A
The term is used in the licensing law to indicate an office operated by the principal broker that is not located in the brokerage’s main office.
13
Q
D: Broker
A
A real estate licensee that has met the requirements set forth KRS 324.046 to be licensed as a broker and who performs brokerages services.
14
Q
D: Broker Associate
A
A licensee who holds a broker’s license and is affiliated with a brokerage but does not act in the capacity of principal broker.
15
Q
D: Broker Management Class
A
A class that has been designed and approved by the Kentucky Real Estate Commission that must be taken by sales associates before they take the broker licensing examination.
16
Q
D: Canceled
A
Under the license law canceled means the status of a license when a licensee fails to renew his/her license, writes the KREC a check that is returned for insufficient funds, fails to re-affiliate with a new principal broker after being released by the current principal broker, or fails to complete his/her continuing education requirement in a timely manner.
17
Q
D: Citizen-at-Large
A
The Commissioner on the real estate commission that does not have a real estate license or other interest in the real estate industry.
18
Q
D: Claims Made Policy
A
The type of professional liability insurance policy (E&O) that covers claims made during the policy period. It is important for the licensee to notify his/her current insurance carrier when a claim is made regardless of when the transaction occurred.
19
Q
D: Commingling
A
The process of depositing client funds into the brokerage’s general account or into the broker’s personal account. This process is illegal and may be a criminal act.
20
Q
D: Commission
A
This word is used in two different ways in the real estate industry. One is to refer to the fee paid to a real estate broker for performing brokerages services. The other is to refer to the Kentucky Real Estate Commission (KREC).
21
Q
D: Commissioners
A
The seven (7) members (per the new provision that went into effect June 26, 2019) of the Kentucky Real Estate Commission is appointed by the governor to serve three (3) year terms.
22
Q
D: Confidential Information
A
As used in the licensing law, any information that would materially compromise the negotiating position of either party to the transaction.
23
Q
D: Continuing Education
A
Education relating to the practice of real estate and real estate law that must be taken by licensees to maintain their licenses in good standing.
24
Q
D: Criminal Records Check
A
A person applying for a real estate license must obtain a criminal background check from the FBI. The information must be submitted to the Kentucky Real Estate Commission along with the license application. This is also referred to as a criminal background check.
25
D: Deceptive Advertisement
Under the license law, advertising that is untrue, and the licensee placing the ad knows or should know that it is not true.
26
D: Delinquency Plan
If a real estate licensee does not complete her continuing education requirements by December 31st, the licensee may enter into an agreement with the Kentucky Real Estate Commission to complete the required courses by April 30 of the following year. This is known as a delinquency plan.
27
D: Duty of Accounting
The fiduciary duty of the agent to inform the principal about all monies received and disbursed by the agent on behalf of the principal.
28
D: Duty of Confidentiality
The fiduciary duty of the agent to keep all of the principal’s personal information confidential. These confidences must be kept not only during the representation; but they must be kept secret forever.
29
D: Duty of Disclosure
The fiduciary duty of the agent to inform the principal about all material facts surrounding the property and the transaction.
This duty extends not only to the physical condition of the real property, but also to any fact that would affect the principal’s decisions regarding the purchase or sale of the property.
30
D: Duty of Loyalty
The fiduciary duty of the agent to protect the interests of the principal above the interests of all others, including those of the agent.
31
D: Duty of Obedience
The fiduciary duty of the agent to follow all legal instructions of the principal even if the agent does not agree with the instructions.
32
D: Duty of Reasonable Care and Diligence
The fiduciary duty of the agent to use at least the same level of skill and effort in representing the principal as another agent would use.
33
D: Escrow Account
The bank account that must be maintained by principal brokers to hold all money coming into the brokerage belonging to someone else.
34
D: False Advertising
Under the licensing law, advertising that is contrary to fact.
35
D: Felony
A crime that is more serious than a misdemeanor and one that may result in imprisonment for longer than one year.
36
D: General Agent
The person in an agency relationship with the authority to act as agent for the principal in all matters. This relationship may be created by a general power of attorney.
37
D: General Power of Attorney
A written document authorizing one person to act on behalf of another person.
The agent is a general agent for the principal and is known as the attorney-in-fact. If a general power of attorney is used to convey an interest in real property, the document must be recorded in the county clerk’s office in the county where the property is located.
38
D: Good Faith Money
A deposit made by the buyer when entering into a sales and purchase contract. The money may be given directly to the seller or may be held by the real estate broker depending on the terms of the contract. Also referred to as earnest money.
39
D: Inactive (formerly called escrow)
Under the license law, the term inactive is when an agent places his/her license in an inactive status.
If a licensee wants to place his/her license in inactive status, he/she must provide proof of an extended reporting period coverage insurance for one (1) year.
To become active, an inactive licensee must submit a national criminal records check, complete CE if applicable, and pay reactivation fees. This provision went into effect on June 26, 2019.
40
D: Internet Advertising
As used in the license law, specific advertising regulations that must be followed by real estate brokerages, brokers, and sales associates and sellers if the property is listed.
41
D: Kentucky Core Class
A continuing education class designed by the Kentucky Real Estate Commission as a comprehensive review of the licensing laws, common and federal law relating to real estate, and the standards of practice in the industry.
The class must be taken by licensees at least once every four years.
Licensees may use this class in the year taken to satisfy their continuing education requirement.
There is also a Core class for “Broker’s Only” created by the KREC. If a licensee has a broker’s license, he/she may choose which Core class to take.
42
D: Know or Should Know
The disclosure standard of care that must be followed by real estate licensees.
Licensees must disclose what they “know” about property and what they “should know.” This standard makes it important for licensees to make a visual inspection of property, keep their ears open, and follow-up on red flags
43
D: License Cancellation
This term is used when the Kentucky Real Estate Commission withdraws a licensee’s authority to sell real estate because the agent failed to timely complete their continuing education, notify the commission of a change in the broker’s business address, a change in the brokerage firm name, the sales associate’s transfer from one broker to another one, or a change of surname.
44
D: License Renewal
Real estate licensees must renew their real estate license. Beginning January 1, 2020, all licenses shall renew biennially.
45
D: Licensee
A person with either a broker or sales associate’s license granted by the Kentucky Real Estate commission and who is subject to KRS 324 and 201 KAR 11.
46
D: Licensor
The Commonwealth of Kentucky, when issuing real estate licenses to brokers and sales associates.
47
D: Limited Power of Attorney
A power of attorney in which the principal limits the authority of the attorney-in-fact.
These documents may be used in real estate transactions for signing contracts, deeds, checks, mortgages, promissory notes, closing statements, and other documents needed to complete the transaction.
48
D: Misdemeanor
A criminal offense that is less than a felony and punishable by a fine or imprisonment of a year or less.
49
D: Misleading Advertising
Advertising that leads the reader to a mistaken belief or conclusion.
Licensees are prohibited from intentionally engaging in this form of advertising.
50
D: Open Records Law
The state law that makes records from all governmental agencies open to the public.
Different agencies have different processes for producing the documents, but basically, unless protected by the attorney-client privilege, all documents kept by governmental agencies are open to the public.
This includes records of the KREC.
51
D: PLE
A licensee who is issued an initial sales associate license after January 1, 2016, shall complete forty-eight (48) classroom or online hours of commission-approved post-license education within two (2) years of receiving or activating his or her license.
52
D: Power of Attorney
A written document authorizing one person (an agent (this is not the same as a real estate licensee)) to act on behalf of another person (the principal).
The agent is a general agent for the principal and is known as the attorney-in-fact.
Powers of attorney may be general in nature, authorizing the attorney-in-fact to perform unlimited acts on behalf of the principal, or they may be limited, authorizing the attorney-in-fact to perform certain tasks.
If a power of attorney is used to convey an interest in real property, the document must be recorded in the county clerk’s office in the county where the property is located.
53
D: Protecting the Consumer
The statutory mandate for the Kentucky Real Estate Commission is to protect the consumer’s interest.
Although the KREC assists real estate licensees in many aspects of the real estate business, the primary duty of the KREC is to protect the public.
54
D: Reciprocal License
This is a process whereby people with out-of-state licenses can obtain a Kentucky license. Reciprocity licensing requirements are set forth in 201 KAR 11.
55
D: Referral Fees
The fee received for recommending someone to a service provider. Real estate brokers may refer buyers and sellers to other real estate brokers and receive a fee for the referral if the other broker has a real estate license. Licensees may not pay referral fees to unlicensed individuals for leads.
56
D: Regular Employees
This term is defined in the license law to mean an employee who receives fixed wages from an employer that withholds federal and state income taxes and FICA payments.
The term differentiates those who work in the real estate industry as employees and those who work as independent contractors.
Most real estate sales people work as independent contractors, not regular employees, and are paid solely by earned commissions.
Under the license law, “regular employees” may perform real estate services without a license only in very specific situations.
57
D: Release of Escrow Funds
Brokers may only remove funds from their escrow accounts in very specific situations. Those situations include: at the time the transaction closes; when the parties sign a mutual release; upon receipt of a court order; and upon sending a letter to all parties pursuant to KRS 324.111.
58
D: Sales Associate
Defined under the license law as a person holding a sales associate’s license who must work under the supervision of a principal broker.
59
D: Uncollected Deposit
In the license law, this refers to a check that has been deposited into the principal broker’s escrow account that has not yet cleared the bank. A principal broker cannot remove money from his/her escrow account until the deposited check has cleared the bank and is said to be “collected.”
60
D: Universal Agent
An agent that has been appointed by the principal to perform any tasks that the principal could perform. A universal agency is created by a general power of attorney.
61
D: Without Unreasonable Delay
Under the license law this is defined as three (3) business days and refers to the amount of time the principal broker has to deposit the earnest money deposit into his/her escrow account or deposit rents and other funds received as a property manager after the funds are received; or deliver a Seller’s Disclosure of Property Condition form to a buyer.
62
Explain Consent Required to Advertise a Specific Property
1. Advertise real estate for sale or lease without the written consent of the owner;
2. Place signage or another advertisement on any private or listed property without the written consent of the owner; or
3. Promote or advertise a specific property listed by another principal broker unless the licensee has requested and obtained written consent from the listing principal broker.
(b) Nothing in paragraph (a)1. through 3. of this subsection shall prohibit a licensee from utilizing public information, including information regarding real estate closed by another licensee, to market his or her real estate brokerage services to consumers.
(2) A licensee who served as a buyer’s agent may advertise his or her role in a sale after a closing has occurred if the advertisement clearly and visibly states that the licensee’s participation was as the buyer’s agent.
63
All advertisements shall include
(a) The full name of the real estate brokerage company registered with the commission; or (b) The full name of the principal broker registered with the commission, with a clear designation of principal broker status.
(3) (a) An advertisement may include in written text an affiliated licensee’s first and last name, or an alternate or assumed name as set forth in Section 4 of this administrative regulation, as registered with the commission, if the principal broker has informed the commission of the affiliated licensee’s first and last name, or alternate or assumed name being used.
(b) Each affiliated licensee shall be limited to the use of one (1) nickname in place of, or along with, the licensee’s first name, and it shall be the responsibility of each individual licensee to inform the commission of the nickname being used. A nickname shall not be used unless the nickname is reflected on the licensee’s online services portal before use.
64
Explain The advertisment content shall be.
) Be clear and visible to a typical observer of the advertisement; and
(b) Not be false, misleading, or deceptive.
(2) (a) The content permitted by Section 2(3) of this administrative regulation shall not appear larger than the content required by Section 2(2) of this administrative regulation.
(b) The requirements of paragraph (a) of this subsection shall not apply to the following promotional materials that advertise a licensee:
Hats;
2. Pens;
3. Notepads;
4. Apparel;
5. Name tags; and
6. The sponsorship of charitable and community events.
(c) The commission shall waive the requirements of paragraph (a) of this subsection for specific promotional materials not stated in paragraph (b) of this subsection upon finding the proposed promotional material would not constitute false, misleading, or deceptive advertising.
(3) (a)1. For purposes of real estate company or licensee advertisement via internet, social media, or other digital or online forms of advertisement, every individual viewable page or post shall constitute a separate advertisement; and
Each advertisement shall contain the content required by Section 2(2) of this administrative regulation in the page or post header, or visible on the page or post without the observer scrolling or otherwise navigating the page or post to view the content required; or
(b) If a page or post cannot reasonably comply with Section 2(2) of this administrative regulation, the advertisement shall include a clickable direct link, that is clear, visible, and identifiable as a link, to a page, post, or user account profile that contains the content required displayed in accordance with paragraph (a)2. of this subsection.
(4) Advertisements that include an audiovisual presentation shall include an audible announcement or written display of the content required by Section 2(2) of this administrative regulation at the beginning of the advertisement.
(5) Any internet, social media, and other digital or online form of advertising that was true and accurate at the time it was made shall not be in violation.
(6) A logo that does not contain written text of the content required by Section 2(2) of this administrative regulation shall not constitute a substitute for the content required.
(7) If the licensee’s principal business location is outside Kentucky, the advertisement shall: (a) Indicate that the licensee holds a Kentucky license to broker real estate; and
(b) Include the regulatory jurisdiction of the licensee’s principal business location.
(8) The requirements established by this administrative regulation shall not apply to logos, brands, or directional and open house signs if the logo, brand, directional, and open house signs do not contain the name of a sales associate.
65
An alternate or assumed name shall not.
(a) Contain terms that may lead the public to believe the licensee or licensees approved to use the alternate or assumed name is offering real estate brokerage services independent of the principal broker, unless the alternate or assumed name is for the real estate brokerage company; or
(b) Be used by more than one (1) group of licensees within the principal broker’s brokerage company, unless the alternate or assumed name is for the real estate brokerage company.
(4) An alternate or assumed name may include reference to a name or person, if the name or person has not lost the ability to engage in real estate brokerage through administrative discipline or by operation of law.
(5) If the alternate or assumed name applies to a team or group, the alternate or assumed name shall end with the word "team" or "group."
66
If a licensee advertises a guaranteed sales plan, the licensee shall disclose in writing?
(a) A fee is charged for participation;
(b) The real estate shall meet qualifications for participation;
(c) The purchase price under a guarantee of purchase of the owner's real estate shall be determined by the licensee or a third party;
(d) The owner of the real estate shall purchase other real estate listed for sale by the licensee or his or her designee; and
(e) An exclusive buyer agency agreement is required.
67
For television advertising, written communication shall appear on the screen.
1. At least three (3) seconds for the first line of lettering and at least one (1) second for each additional line of lettering; and
2. In letters that shall be at least eighteen (18) video scan lines in size for uppercase letters or at least twenty-four (24) video scan lines for uppercase capital letters if uppercase capitals and lowercase letters are used.
68
Within ten (10) days of being issued a license number and Occupations and Professions Identification Number, OP ID, the licensee shall
(a) Create an Online Services Portal account;
(b) Verify the licensee’s current residential address and telephone number; and (c) Provide one (1) valid electronic mail address.
69
Prior to applying for a broker’s license, a prospective applicant shall
(a) Complete not less than twenty-one (21) academic credit hours, consistent with KRS 324.046(1)(a), of education to acquire a broker’s license, including a minimum of:
1. Nine (9) academic credit hours of real estate courses, which shall not include an applicant’s sales associate prelicense education;
2. Three (3) academic credit hours of Broker Management; and
3. Nine (9) academic credit hours of broker elective courses, approved by the commission. (b) A licensee shall not get duplicate course credit toward a broker’s license;
(c) A licensee shall get course credit toward his or her broker’s license by completing National Association of RealtorsÒ, NAR designation courses. Credit for the designation course shall be awarded consistent with accreditation at the time the course is completed.
(d) An applicant for a broker’s license may submit a request for an education review by submitting a completed Broker Education Review Form, KREC Form 207.
70
An applicant for a broker's license shall submit
(a) Proof of the requisite sales associate experience
(b) A completed application submitted on Score Report/License Application obtained from the commission’s testing provider after passing the required examination;
(c) Proof of completion of the broker curriculum education real estate courses
(d) Proof of Errors and Omissions insurance coverage compliant with KRS 324.395 and 201 KAR 11:220, if the license will be immediately active, or proof of extended reporting period coverage as required by KRS 324.395 if the license will be placed into inactive status;
(e) An original copy of the applicant’s national criminal history check obtained consistent with KRS 324.045(5) and this administrative regulation;
(f) A completed and signed Consent to Jurisdiction and Service of Process, KREC Form 205, if the applicant resides outside of the Commonwealth of Kentucky; and
(g) The nonrefundable sixty (60) dollar original license fee required by KRS 324.287(2).
(3) An applicant may submit a paper or electronic application.
(4) The provisions of the section shall not be implemented until April 1, 2020.
71
An individual actively licensed as a real estate professional outside of Kentucky may apply for an equivalent Kentucky license.
To obtain a sales associate license by reciprocal licensing, an individual shall:
(a) File with the commission a national criminal history check in accordance with KRS 324.045(5) and this administrative regulation;
(b) File with the commission certification of licensure issued within the preceding ninety (90) days by the regulatory authority of the state for which the individual seeks reciprocity;
(c) Submit proof of completion of six (6) academic credit hours or their equivalent in real estate courses from an accredited institution or approved real estate school pursuant to KRS 324.046 and KRS 324.141(1)(a)3.;
(d) Pass the Kentucky law portion of the licensing examination for a sales associate's license;
(e) Submit a completed and signed Consent to Jurisdiction and Service of Process, KREC Form 205, if the applicant resides outside of Kentucky; and
(f) The nonrefundable sixty (60) dollar original license fee and sixty (60) dollar recovery fund fee required by KRS 324.287(2) and (8).
72
To obtain a broker license by reciprocal licensing an individual shall
a) File with the commission a national criminal history check in accordance with KRS 324.045(5) and this administrative regulation;
(b) File with the commission a certification of licensure issued within the preceding ninety (90) days by the regulatory authority of the state for which the individual seeks reciprocity;
(c) Submit proof of completion of twenty-one (21) academic credit hours or their equivalent in real estate courses from an accredited institution or approved real estate school pursuant to KRS 324.046 and KRS 324.141(1)(a)3.;
(d) Pass the Kentucky law portion of the licensing examination for a broker’s license;
(e) Submit a completed and signed Consent to Jurisdiction and Service of Process, KREC Form 205, if the applicant resides outside of Kentucky; and
(f) The nonrefundable sixty (60) dollar original license fee and sixty (60) dollar recovery fund fee required by KRS 324.287(2) and (8).
(4) For purposes of subsections (2)(c) and (3)(c) of this Section, "or their equivalent" shall mean any education requirements approved by the commission pursuant to a reciprocity agreement entered into between the jurisdiction from which the applicant is seeking reciprocity and the commission.
(5) An applicant may submit a paper or electronic application.
(6) Within ten (10) days of being issued a license number and OP ID, the licensee shall:
(a) Create an Online Services Portal account;
(b) Verify the licensee’s current residential address and telephone number; and
(c) 1. Provide one (1) electronic mail address;
2. The licensee may provide additional, unique electronic mail addresses.
73
Real Estate Examination
(1) A successful passing score on required portions of the real estate examination mandated by KRS 324.045(2) shall be valid for sixty (60) days.
(2) An applicant who fails to pass any required portion of the examination mandated by KRS 324.045(2) three (3) times shall wait at least thirty (30) calendar days from the date of the applicant's third failed examination prior to retaking the examination, or the score shall be void.
74
Explain Foreign Language Diplomas or Transcripts.
(1) If an applicant submits documentation of qualifying education in a language other than English, the diploma or transcript shall:
(a) Be accurately translated by a foreign language document translation service; and
(b) Include a certification stating that the translation is true, accurate, and complete.
(2) The applicant shall provide a letter to the commission indicating that the curriculum of the proffered education is equivalent to a high school diploma or GED. The comparison shall be made by an education credential service provider with membership in the National Association of Credential Evaluation Services.
(3) If the applicant is unable to comply with the requirements of this section, the applicant shall submit proof of the receipt of a GED granted by an agency or institution within the United States.
75
Explain National Criminal History Check
(1) Prior to taking a licensure examination, an applicant shall request a copy of the applicant's national criminal history check, which shall only be valid for ninety (90) days from the date of the record report.
(2) (a) The applicant may request a copy of his or her national criminal history check from the Federal Bureau of Investigation pursuant to the provisions of 28 C.F.R. 16.30 to 16.33 or through the Kentucky State Police for submission to the Federal Bureau of Investigation consistent with KRS 324.045(5).
(b) An applicant may submit the Criminal History Affidavit, KREC Form 209, with his or her application for licensure if:
The applicant is unable to obtain his or her national criminal history check from the Federal Bureau of Investigation because the applicant’s fingerprints are rejected;
The applicant submits proof that he or she was fingerprinted at a recognized state or local law enforcement agency;
The applicant submits a Kentucky Administrative Office of the Courts (AOC) Fast Check Criminal Records Report, or a similar informal background report from the jurisdiction where the applicant resides; and
The applicant submits proof of an alternate request for a Federal Bureau of Investigation records check by name or social security number.
76
An issued license shall be subject to discipline if, while an applicant, the licensee
Having submitted a Criminal History Affidavit, KREC Form 209, with his or her application for licensure, fails to submit the national criminal history check within ten (10) days of receiving the report; or
Failed to report any new criminal charges or convictions that occurred after the national criminal history check report date.
(3)(a) The commission shall investigate a national criminal history check which reveals a felony conviction within the previous ten (10) years, or a misdemeanor conviction within the previous five (5) years, and may investigate any charges or convictions revealed by the national criminal history check or any other evidence of dishonesty, untruthfulness, or bad reputation of the applicant.
(b) In the determination of the chair of the commission, the commission may delegate the investigative process to the Applicant Review Committee, a subcommittee of the commission, to be comprised of no more than two (2) commissioners;
(c) The Applicant Review Committee shall operate consistent with KRS Chapter 335B.
77
Following the completion of the investigation, the commission shall review the investigation report and shall:
(a) Order the applicant to appear before the commission for a hearing before the real estate commission or the real estate commission's authorized representative to determine whether the applicant meets the standards of KRS 324.045; or
(b) Allow the applicant to proceed with his or her licensure application without a hearing.
78
Explain Release by Principal Broker.
(1) Upon notification from the principal broker or the affiliate licensee that an affiliate licensee has been released pursuant to KRS 324.310(1), the commission shall notify the affiliate licensee at his or her last electronic mail address or addresses on file at the commission that, within thirty (30) days of the date of the release notification, the licensee shall:
(a) Reaffiliate with another broker by submitting a completed Acceptance and Release Form, KREC Form 200, or by using the licensee’s online services portal; or
(b) Request that his or her license be placed into inactive status by using the licensee’s online services portal or by submitting a completed License Status and Personal Information Update Form, KREC Form 201;
(c) If the affiliate holds a broker license and was formerly a principal broker, he or she shall:
1. Affiliate with another principal broker;
2. Open a new office as principal broker; or
3. Place his or her license into inactive status.
(2) Failure to comply with the notification issued by the commission shall result in the cancellation of the licensee’s license.
(3) A licensee with a cancelled license shall not engage in real estate brokerage activity during the period of cancellation.
79
Explain License Renewal
(1) (a) Licenses shall be renewed on or before March 31 through the licensee’s Online Services Portal account.
(b) A licensee who is unable to renew his or her license using his or her Online Services Portal may utilize the License Renewal Form, KREC Form 208.
(2) A cancelled license shall not be renewed until the license is reactivated and in good standing.
(3) (a) A license shall be cancelled if not renewed.
(b) A licensee with a cancelled license shall not engage in real estate brokerage pursuant to KRS 324.160(2).
(4) A licensee shall file or verify with the commission at renewal a telephone number, residential address, and an electronic mail address or addresses.
80
Explain Mandatory Continueing Education
(1) An active licensee, licensed by the commission on or after June 19, 1976, shall comply with the requirements of KRS 324.085(1) by attending and successfully completing six (6) hours of continuing education courses sponsored or approved by the commission each year. Three (3) of the hours of continuing education shall be in law, and three (3) of the hours of continuing education may be electives.
(a) An active licensee shall complete the continuing education requirements consistent with KRS 324.085(1) no later than December 31 of the first year in the renewal cycle. An active licensee shall receive continuing education credit for any approved course completed on or before December 31, if the education provider has reported the licensee’s course completion to the commission before 11:59 p.m. on December 31 consistent with 201 KAR 11:170, Section 6(3).
(b) An active licensee who fails to complete his or her continuing education requirement shall have his or her license cancelled and be ineligible to renew if the licensee has not completed the continuing education required by KRS 324.085(1) and this administrative regulation.
(2) An active licensee’s annual mandatory continuing education requirement shall not be satisfied by the completion of a pre-license course.
(3) A candidate shall not submit completion of the same continuing education course more than once for licensure credit in the same calendar year.
(4) A licensee shall not receive credit for more than nine (9) hours of continuing education in a calendar day.
(5) A licensee shall not receive credit for a course if the licensee arrives more than ten (10) minutes after the scheduled start of the course or after the conclusion of any break during the course.
(6) An active licensee shall attend a commission-approved core course once every four (4) years, with the first four (4) year cycle beginning from the year of initial licensure. The core course shall:
(a) Satisfy the licensee's mandatory continuing education requirement for the year in which the course is taken; and
(b) Be a six (6) hour comprehensive review of the requirements of:
1. KRS Chapter 324;
2. 201 KAR Chapter 11;
3. Common and federal law relating to real estate; and
4. The standards of practice for a real estate licensee.
(7) An active licensee who fails to complete Core in a year in which the licensee is required to complete Core, even if the licensee completed other continuing education, shall be subject to the delinquency procedures set forth in Section 13 of this administrative regulation.
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Explain Exemptions from the Continuing Education Requrement.
(1) A person licensed prior to June 19, 1976 shall not be required to complete continuing education.
(2) A reciprocal licensing broker, who has been licensed for less than three (3) months when education is due, shall not be required to attend a continuing education course during the first education cycle in which he or she is licensed in Kentucky.
(3) A reciprocal licensing sales associate shall not be required to complete continuing education during the first two (2) full education cycles of licensure in Kentucky. A reciprocal licensing sales associate shall complete the education required by KRS 324.085(2).
(4) A licensee shall not be required to comply with KRS 324.085(1) during the first two
(2) full education cycles from the date of issuance of a sales associate license.
(5) A licensee whose license is inactive shall not be required to attend continuing education courses while the license remains inactive, except as provided in this administrative regulation.
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Minimum Coverage Requirements. A licensee shall carry continuous errors and omissions coverage that, at a minimum includes:
(1) A limit of liability not less than $100,000 for any one (1) claim, excluding the cost of investigation and defense; and
(2) An annual aggregate limit of liability of not less than $1,000,000, excluding the cost of investigation and defense.
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Firm Coverage. A principal broker who purchases errors and omissions "firm coverage" insurance shall have at least the following aggregate amounts
(1) One (1) to forty (40) licensees shall carry a $1,000,000 annual aggregate; or (2) Forty-one (41) or more licensees shall carry a $2,000,000 annual aggregate.
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Deductibles. All errors and omissions coverage or professional liability insurance policies shall have maximum deductibles, which may be separate deductibles, which shall not exceed
(1) $2,500 for judgment or settlement; and
| (2) $1,000 for the cost of investigation and defense.
