L5: Real Estate Brokerage Activities & Procedures Flashcards
How long must a brokerage store records of contracts and money received for?
5 years
And 2 years after legal proceedings ended, if applicable
Temporary shelter
Commonly used in construction sites
Must be registered as branch office if sales associates are permanently working there or if real estate transactions are closed there
What must be included in a brokerage signage?
Brokers name
“Licensed real estate broker”
Trade name (if applicable), must be registered with DBPR & DOS
Blind advertisement
An ad in which a license holder attempts to promote or solicit real estate without disclosing the fact that they are a license holder
NB: All adds must include broker/agent’s point of contact information
How long does sales agent have to give employee broker money received from customer/client?
By end of following business day
Escrow accounts
AKA, Trust accounts
Are accounts were funds and/or financial documents are held by a disinterested third-party on behalf of the other two parties until conditions are met
Purpose: mitigate liability and give brokers a safe place to store funds
In Florida, it can be brokerage’s, title companies’ or attorneys’ accounts and can be opened in commercial banks, credit unions and saving associations
Commingling
Illegal act of mix and personal funds with clients’ funds
Also happens when broker doesn’t promptly removed earned commission and fees from the trust account
Earnest money
Payment made to confirm or commit to a contract, ex. deposit
Can be full or partial
Conversion
Misusing (spend) that money belong in to others by a licensed holder
Deposit
Payment made from one party to another that shows sincerity to fulfill the transaction
AKA, Binder deposit or good faith deposit
How long does broker have to deposit money received from sponsored sales agent into escrow account?
By the end of the 3rd business day
PS: Written receipt must be obtain within 10 days
Conflicting demands
Unresolved demands made by buyer and seller in a transaction regarding escrowed property disbursement
Must be settled through a settlement procedure & FREC must be notified in writing within 15 days
Settlement procedures must be implemented within 30 days
Steps of Settlement Procedures in Conflicting Demands
MEDIATION (informal negotiation held by independent 3rd party, max 90 days)
—-> (a) ARBITRATION (conflict is presented to a 3rd party that has binding judgment)
—-> (b) LITIGATION (legal process in court w interpleader or declaratory judgment)
—-> (c and from a/b) ESCROW DISBURSEMENT ORDER (FREC’s decision on who should receive the disputed escrow funds)
EDO only works for funds on escrow accounts opened by broker
Stipulation
Settlement between parties, must be approved by FREC
Good Faith Doubt
Doubt that’s honest, honors the business contract, is free of fraudulent motive & implies intent to fulfill the contract
If there is good-faith doubt, FREC must be notified within 15 days
2 Types of Commission Split
1) Cooperating Brokers Split:
- between 2 brokers working with 2 parties in some transaction
- normally listed on the MLS
2) Broker-Sales Associate Split (negotiated when joining brokerage)
Brokerage/Agent Relationship
Agents work on the broker’s behalf
Agent can only hang license under one 1 brokerage
Has binding duties, obligations and confidentiality carries over forever (no record of transactions or client records can be taken with agent when leaving brokerage)
Change of brokerage must be notified to FREC in 10 day
Maximum amount allowed to be paid as finders fee or referral fee to non-licensed holders
$50
Interpleader
A court procedure meant to resolve a dispute when a party holds funds they know they do not own, but to which multiple other parties lay claim
Kickback
Payment made to a licensee for service unrelated to the real estate transaction or a service that does not fall under the responsibility of the licensee
Kickbacks are illegal for title searches, title insurance, attorney services, credit reports, survey and appraisals
Entities that can be registered as Brokerage
Sole proprietorship
General partnership (Co-owners share power, responsibility and profit)
Limited partnership (has general and limited partners)
Corporation
LLC
LLP (parties are protected from some liabilities)
Ostensible partnership
Appearance that a partnership exists between two parties even though no partnership was intentionally created (not allowed in FL)