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TESTING > Laws and Rules Affecting Oklahoma Real Estate > Flashcards

Laws and Rules Affecting Oklahoma Real Estate Flashcards

1
Q

OREC

A

Established July 1, 1950
Law is reviewed every 5 years in accordance with the SunSet Law!
The Authority to regulate and enforce law comes from ‘police power’
Main purpose is to Protect the Public!

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2
Q

What Composes the Real Estate Law

A

State Statutes
Rules and Regulations originated by the Real Estate Commission
Compliance with the Administrative Procedures Act allows the commission with the power to perform duties

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3
Q

Commission

A

7 Members, All US citizens, must have lived in Oklahoma for at least 3 years prior to their appointment
5 Members must be active real estate brokers with at least 5 years experience, 1 layman, 1 a rep of a real estate school in Oklahoma and approved by the OREC

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4
Q

Commissions

A

Serve 4 year terms, Reimbursed for travel, no salary, Appointed by the Governor w/the advice and consent of the State, no more than 2 members may serve from any one state congressional district

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5
Q

Broker Qualifications

A

Licensed 2 years as an active licensed agent, and supervised by a Real Estate Broker in this or another state
Licensed 24 months as an active sales associate under the supervision of a broker within the last 5 years before application
Completed the post license requirement of 45 clock hours of instruction and class exam
Completion of 90 clock hours Broker’s material and examination

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6
Q

Expiration of License

A

Regular term for a regular license for Brokers and Sales Associates is 36 months
License is issued in the month of application and expires 36 Months later
A provisional License cannot be renewed, it must be converted to a regular license within the 45 hour post license course

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7
Q

Advertising

A

Can NOT use a post office
Must include the name and # of the company broker
Must NOT discriminate in either text or graphics
Franchisees must include company name also
Advertising agents must include Broker or company name and #
Advertising must be approved by the Broker and comply with RESPA and Fair Housing Rules

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8
Q

Statue of Frauds

A

Prevents Frauds and Perjuries
Requires that those applicable contracts be in writing
Applies to all contracts for the Sale of Real Estate
Applies to leases that last for more than 1 year

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9
Q

Exceptions for Real Estate Licensing

A

An investor or individual handling only their own transactions is exempt
An attorney-in-fact, person having a ‘power of attorney’
An attorney at law, if the transaction is within the scope of their regular law practice
A person who negotiates leases or easements for a company or government body, called a landman
An assigned person either from a will (executor, executrix, or a court (administrator, admininstratrix).
A resident manager

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10
Q

Provisional License

A

Licensee has 12 months after issuance of license to complete 45 clock hour Post License Course/Provisional License is not renewable/Active military requirement will defer requirement

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11
Q

Continuing Ed-Sales Associate

A 
renew license every 36 months
without continued ed license is placed on 'inactive status'
Ed requirement is 21 clock hours, 12 required (2 Hours Each) and 9 elective, Required subjects: 
Brokerage Relations Act
Codes & Rules
Professional Conduct/Ethics
Contracts
Fair Housing Act
Hot Topics
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12
Q

Broker Responsibility

A

supervise all agents licensed with the Broker as Associates and Broker Associates, and all Broker Managers, or Branch Brokers, Also supervisor assistants of the agents whether they are licensed or not

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13
Q

Complaint Process

A

Originated by public complaint, or commission’s motion
Licensee or unlicensed person receives immediate notice
Licensee has 15 days to reply
A field investiagion or preliminary investigative session determines whether charges lodged merits a formal hearing
Commission Secretary-Treasurer ‘Supervises Hearing’
The prosecutor may subpoena witnesses, take testimony, and compel the production of records and documents
A written report accompanies the findings and is sent to the commission
The Commission determines formal charges or formal hearing

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14
Q

Complaint Process findings

A

If commission findings reveal public health, safety, or welfare imperatively requires emergency action, a summary suspension may be ordered within 30 days and stays in effect until further ordered by commission
Commission issues a notice within 15 days specifying the offenses charged

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15
Q

Duty to Account

A

-The Brokers responsibility to care for others peoples money, documents, or non-depositable items
funds are deposited in a Federally Insured Financial Institution
Account is labeled ‘escrow’ or ‘trust’ and registered with OREC
Commingling (mixing) prohibited or Conversion (spending) is illegal
Broker is required to furnish a ‘settlement statement’
Records must be retained for 5 years after contract completion

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16
Q

Broker’s Escrow Account

A

may be an interest bearing account and must be disclosed to all parties who are to receive interest
All escrow funds shall be deposited before the end of the 3rd banking day
The broker must be a signor of the ‘escrow’ or ‘trust’ account
Account must be in the name of the broker
Broker maintains funds in account until the contract is consummated, terminated, and properly accounted

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17
Q

Reasons for Establishing Escrow Account

A

Prevents clients money from being attached to any law suit in which the broker may be involved
In case of the Brokers Death, prevents money from being attached to the brokers estate
Not as likely to have mistakes or intentions that may lead to commingling or conversion

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18
Q

Transferring License to Another Broker

A

Associates license is issued to the associate’s selected Broker
An associate may request to transfer license to another Broker or location
Request must be turned into the Commission within 10 days
the new broker must file a consent agreement
Associates transfer cost is $25, Group transfer cost is $750
Active associates may continue to act if handled in a timely manner

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19
Q

OREC Notification REquirements

A

If Broker’s trust account change or close
If Licensee’s Broker changes $25
Change in office location
Change in home address, is no cost unless a Broker’s license is reissued $25
Closing Real Estate office
Death of a Broker
Conviction of Broker or associate of felony involving forgery, embezzlement, extortion, fraud, w/plea of guilty of pleads nolo contenderee

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20
Q

Commission Disputes

A

settled in court, mediation, or arbitration but not involving the OREC
If licensee is a Realtor, arbitration is available through the Realtor’s association.

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21
Q

Cause for Suspension or Revocation of License-1

A

making false or fraudulent statement on license application
Substantial misrepresentations
Failing to comply with Broker Relationships Act
Accepting commission or valuable consideration form another Broker
Representing a Broker other than the Broker that the agent is associated with without consent of associated Broker
Failing to account or remit money or documents belonging to others
Paying commission or valuable consideration to unlicensed person or acts in violation of the OREC Code or rules
Any conduct that is untrustworthy, improper, fraudulent, or dishonest or prohibited dealings

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22
Q

Cause for Suspension or Revocation of License-2

A

Disregard or violation of the OREC code or Rules
Guaranteeing future profits
Advertising including placement of sign on any property without owners consent
Influencing Purchasers or prospective purchaser by offering contest, prizes, or lotteries to purchaser
Appraising property contingent of a predetermined value or failing to comply and disclose correctly with the Oklahoma REal Estate Appraiser BOard
Involved in a crime of moral turpitude
Commingling

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23
Q

Cause for Suspension or Revocation of License-3

A

Violation of Fair Housing Laws
Broker’s failure to pay received commission
Conviction of forgery, embezzlement, extortion, fraud, or similar offense or pleading nolo contendere
Failing to disclose real estate license
Paying money for a purchaser’s cost
Violation of the REsidential Property Condition Disclosure Act

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24
Q

Substantial Misrepresentations

A

False promises in the acts of associates or advertising intended to influence, persuade, or induce others
Does not have to be fraudulent
ex. Dual Contracts
Failure to disclose material defects
Representing a sale price that is above the actual price
Using the name of a revoked or suspended licensee

25
Q

Prohibited Dealings

A

Taking a listing with no termination date
Buying or Selling property as a licensee for themselves or relatives w/o disclosing relationship
Repeated misrepresentations
Failing to act when a buyer or leasee requests to make an offer
Guaranteeing profits
Paying the commission w/ a dishonored check
Failing to provide a net to seller, or a cost to buyer
Agent acting as a Broker w/o a proper license
Discouraging a Buyer to get inspections
Allowing access to property w/o owner’s permission

26
Q

Penalties for the Unlicensed

A

After notice & hearing, a violation is punishable by a max fine of $5K or the amount of commission-whichever is greater for each violation
Any person willingly and knowingly violating a provision of this Code, upon conviction shall be guilty of a misdemeanor punishable by a Max find of $1K and or 6 months in a country jail
Recovered funds are deposited into the Oklahoma Real Estate Education and Recovery Fund

27
Q

Punishment for Licensees

A

The Commission may impose administrative fines between $100 -$2000 for each violation or a max of $5K total
Fines must be paid within 30 days or fine is doubled and license is suspended until paid
Collected fines go in the OREC Recovery fund
Fines may be combined w/other criminal penalties or additional ed requirements

28
Q

Revoked License

A

Agent or Broker can’t participate in any Real Estate business requiring a license or be an officer in a real estate business
If commission requires additional Ed classes and/or fines-those must be completed before license is reinstated
Commission may designate a period of time for suspension or revocation
Agent must wait 3 years to reapply for license
If $ from the Education of Recovery Fund has been paid for licensee, the full amount plus 7% annual interest must be completely repaid

29
Q

Confidential Info

A

should not be disclosed during or after a transaction
not required to be confidential if party consents, info is required to be disclosed, or info is found by the party through public info
Items to be kept as confidential: offeree is willing to reduce or increase their offer
financing terms could be changed,
the motivation is for selling, purchasing, leasing etc

30
Q

Property Management

A

Any time someone is taking care of property for another person and is paid or compensated in any way they must have a Real Estate License
A Broker can have 2 or more companies i.e. a Sale Brokerage Business and a Property Management Company, both requiring a Real Estate License, as long as they are at the SAME ADDRESS
The Real Estate License for property management is the same as for selling Real Estate

31
Q

Broker Relationship Act & Landlord Tenant

A

Broker Relationship Act applies to any landlord/tenant agreement that contains an EXCHANGE or OPTION TO PURCHASE

32
Q

Trust Accounts- Security Deposits

A

Deposits must be kept in Broker’s trust or Escrow account
Broker’s account conforms to OREC rules for ‘Duty to Account’
Deposits are returned at the end of the lease
$ paid as security for an OPTION belongs to the optionee and is not returned (not a Landlord Tenant Agreement)

33
Q

Referral

A

A Resident of a complex may receive up to $100 for a referral. A real estate license is not required for a residential referral.

34
Q

Landlord Duties

A

If Methamphetamine was used in a property, the landlord must clean the property and disclose the use to the new tenant.
Disclosure of contamination is NOT required if property is tested and meets acceptable level
If property flooded in last 5 years, landlord must disclose
Landlord must return deposits according to agreement, and must not harass tenants

35
Q

Lease Terms

A

counted by excluding the 1st day and including the last day, unless last day is a holiday and then its also excluded
W/O agreement, rent is week to week for ROOMER OR BOARDER
W/O agreement, month to month rent is presumed
W/expired agreement lease, tenancy revers to month to month tenancy after expiration
Month to month rent requires 30 day notice from effective day, so it requires 30 days notice from time tenant is to vacate

36
Q

Eviction

A

if tenant willfully remains after agreed expiration, landlord may collect a max amount of monthly rent twice the amount of the agreement
Landlord may bring action against tenant for possession and damages (unlawful detainer)
Written notice delivered personally to a family member 12 years or older or attached to premises conspicuously and then mailed by certified mail
Notice to landlord that tenant is vacating is sent personally or if unavailable sent by certified mail

37
Q

Oklahoma Real Estate Commission Records

A

OREC has the OPEN RECORDS ACT
All open records of the Real Estate Commission may be inspected and copied in accordance with procedures
Real Estate Commission charges a fee for the records
Test and course of study are not available in the open records

38
Q

Real Estate Office

A

Must have specific location
May be in Broker’s home if zoning laws allow
Must have agents licenses available
be available during business hours
must have room with permanent walls for closing and negotiating
Must have a sign w/letters at least 1 inch conspicuously located near entrance

39
Q

Real Estate Commission has 2 Funds

A

Operating account-supported by the payment of fees, to the Real Estate Commission by licensees and applicants
Education and Recovery Fund-has replaced bonding of licensees and licensees pay $5 per year towards that fund with the right to levy more if necessary

40
Q

Education and Recovery Fund

A

payment for someone who has been damaged by a licensee
max amount paid for an agent is $50,000K, Max paid for any one transaction is $50K
Max to anyone ‘individual’ is $25K
Paid as a last resort
License of agent or agents is revoked until repaid in full and 7% interest.

41
Q

Seller’s Disclosure and Disclaimer of Material Facts

A

DISCLOSURE form is ONLY filled out by the SELLER, or someone for them, NOT the agent or Broker
single family and duplex properties require disclosure or disclaimer form
Valid for 180 days regardless of listing expiration
If Seller has never lived in house and has no information they must complete a DISCLAIMER form-This is an exemption from the Disclosure Form

42
Q

Psychological Impacted Property

A

It is not the same as a material defect
applies to ‘People’ who have inhabited the property
Ex. Site of a Murder, or a Haunted House..
Disclosed only at Buyer’s request when the buyer is making a Bona Fide Offer
A Bona Fide Offer is a serious offer, almost always written, sufficiently complete that acceptance of offer would be a contract if accepted by Seller
Request for information must be in writing!
REquest is for information is submitted to the SEller through the agent
Agent reports Seller’s reply
Some information may require a court order if the buyer demands an answer

43
Q

Licensee’s Duties

A

Licensees or Broker may not fill out disclosure or disclaimer form UNLESS THEY ARE ALSO THE OWNER OF THE PROPERTY
Disclose ANY known material defect if known
must deliver appropriate form to buyer as soon as possible.. or at least before the seller can accept the buyers Offer
Buyer can not compel Seller to disclose Acquired Immune Deficiency w/o a court order

44
Q

Megan’s Law

A

Requires people with sexually committed crimes to
register.. Licensees are not required by law to disclose or are held liable for failing to disclose people on this register, therefore licensees are exempt from the disclosure requirement

45
Q

Environmental Toxins

A

Asbestos-Old material used for insulating, siding and other purposes that causes lung disease.highly friable
Radon- found anywhere.. Naturally occurring gas in soil that collects in an area w/inadequate ventilation
Carbon Monoxide- Gas emitted from a faulty furnace that can lead to death
EPA enforces CERCLA laws

46
Q

Associates Owning Entity

A

In any transaction that an associate owns a beneficial interest in an entity, including financiqutal services, for home owner, home buyers, or tenants, the associate must disclose nature and amount of interest to Broker and continuously update information
Exceptions: if ownership is in a publicly held company and is less than 1% of the total equity value
If ownership is privately held in company and is less than 10% licensed ownership individually or collectively
If no licensee is an officer, director, managing partner or otherwise directly or indirectly in control of the entity

47
Q

Earned Commissions

A

Commission is earned at the time that the Buyer is Ready, Willing, and Able to perform the contract
must be met simultaneously
Commission is paid at the completion of Contract terms

48
Q

Records of the Broker

A

must maintain all records and files for a min of 5 years form consummation or the termination of the transaction
For the trust account, the time is 5 years from the disbursal of funds.

49
Q

Duplicate Originals

A

Copies of all documents used in a transaction must be given to all parties to the transaction
A duplicate original is a copied document with original signatures
Should use ink that distinguishes between a copy and an original (not black ink)

50
Q

Alternative Media

A

paper trust account records must be maintained a min of 2 years
Other files can be xfered to alternative media immediately
The alternative media and the means to display the files of the alternative media must be maintained during business hours w/the ability to make a paper copy
Quality assurance check must be done
2 copies of the records must be made for each file

51
Q

Broker’s Responsibility

A

Supervise all agents licensed w/the Broker as Associates and Broker Associates, and all Broker Managers, or Branch Brokers

Supervise not only the agents but all of the assistants of the agents whether they are licensed or unlicensed

52
Q

Cessation of Real Estate Activities

A

1st notify the commission and tell them where the records will be stored
Return all licenses, Broker and associates
Send release forms to the commission for all agents of the Broker
Broker must xfer to a new firm, or place his or her license on inactive status
Notify in writing all listing and management clients and parties and cobrokers in existing contracts
Terminate all advertising and remove all signs within 30 days

53
Q

Cessation of Real Estate Activities con’t

A

Responsible broker must maintain trust accounts and pending contracts until consummation of transaction and disbursal of funds
When final transaction is closed, notify the commission in writing that the account is closed
If the responsible Broker can’t continue reliably, the funds and pending contracts may be xfered to an authorized broker with the approval of the commission

54
Q

Trade Names

A

Name of the business must be registered with the Commission
The is inclusive of ‘Trade Names’ prior to any name being used or displayed
Commission must be notified in writing of any unused business names.

55
Q

Death or Disability of Broker

A

In the case of a sole proprietor, all brokerage activity must cease and a family attorney or rep performs the requirements for the cessation of business
A real estate business designated as a corp, ass, or partnership may choose another Broker w/approval of the Commission and then follow applicable rules similar to cessation of business

56
Q

Sherman Anti-Trust Act

A

Intended to preserve business competition
Every contract or conspiracy in the restraint of trade is illegal
As applies to Real Estate, to Create a fee schedule among brokers is illegal
Or for some broker and or sales associate to decide to boycott certain brokers is another ex that is illegal
To be involved in any social conversation that could be reported is sometimes sufficient for prosecution

57
Q

Antitrust Violation

A

Controlled business, agreements with tie-ins especially is undisclosed
Boycotting
Price-fixing
Steering markets
Steering customers
Brokers who violate the Sherman Antitrust Act may be punished by a max fine of $100,000 and 3 years in prison
civil suits triple damages and court, attorney fees

58
Q

HUD 1 CLOSING STATEMENT

A

BROKER MUST BE ABLE TO COMPLETE THE standard form in use in the United States of America which is used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan for the purpose of purchasing or refinancing real estate.

59
Q

Contract Forms Committee

A 
11 Members
3 OREC
3 OBA
5 OAR
Members receive travel reimbursement

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