NCh5 Risk Management

Question 1

If a broker accepts, earnest money, or a deposit and as an escrow agent, where must the money be deposited for this purpose?

Answer 1

Special trust account

Question 2

Under what condition may all client funds be kept in the same account?

Answer 2

As long as written records are maintained

Question 3

When a broker mixes his client money with his or her funds either business or personal, this is called

Answer 3

Commingling

Question 4

When a broker uses clients, money or commingled funds for his or her own purposes, this is called

Answer 4

Conversion

Question 5

What must take place whenever money is held in a trust account, and there is a request for funds to be released from that account?

Answer 5

Both parties to the transaction must be notified

Question 6

How long should a broker keep copies of all documents involved in his or her business?

Answer 6

A minimum of four years

Question 7

What is recommended to real estate brokers to protect themselves and their clients are any loss of records due to theft, vandalism, fire or flood?

Answer 7

Make use of cloud or offsite storage

Question 8

What are two federal laws confirming the use of electronic documents and e-signature’s as being valid and binding on the parties to a transaction as long as the parties have agreed to their use?

Answer 8

E-Sign
UETA (Uniform Electronic Transactions Act)

Question 9

When the broker will be held liable for acts of his or her sales people, while acting on behalf of the broker, even the broker did nothing wrong to call the liability, this is called

Answer 9

Vicarious liability

Question 10

The laws that were passed to preserve business competition by prohibiting monopolies, monopolistic practices, and the restraint of trade most significantly impacting the area of commissions for real estate agents is called

Answer 10

Sherman and Clayton Antitrust Acts

Question 11

Are commissions always negotiable?

Answer 11

Yes

Question 12

Are competing broker-to-broker commission discussions allowed?

Answer 12

No

Question 13

If a broker overhears other brokers discussing commission rates, what should they do?

Answer 13

Walk away

Question 14

Is setting an MLS requirement for a minimum commission on a listing allowed?

Answer 14

No

Question 15

Should death on a property due to a material defect be disclosed

Answer 15

Yes

Question 16

Should death on a property due to a violent crime such a murder be disclosed

Answer 16

Yes

Question 17

Should death on a property due to natural causes, are suicide be disclosed?

Answer 17

No

Question 18

Should death on a property due to HIV/Aids be disclosed

Answer 18

No

Question 19

A property where there has been a murder or alleged haunting, is called

Answer 19

Stigmatized

Question 20

Can a property be considered stigmatized, if it is in the vicinity of the residence of a known sexual offender

Answer 20

Yes

Question 21

The federal law requiring all states to release information to the public about known convicted, sex offenders when necessary to protect the public safety is

Answer 21

Megans law

Question 22

This is not a misrepresentation, but marketing, using adjectives and opinions, rather than details or facts, such as the most beautiful landscaping

Answer 22

Puffing

Question 23

Insurance that protects both the broker and sales licensees from a legal claim or a liability for mistakes, errors and negligence, in usual listing and selling activities is called.

Answer 23

Errors and omissions insurance

Question 24

What type of insurance that protects a companies assets? If someone is injured on company property is called

Answer 24

General liability insurance