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TN Timeshare Practice > Pre-Licensing Study Guide > Flashcards

Pre-Licensing Study Guide Flashcards

1
Q

In direct mail, the envelopes and contents—under the ARDHA code of Standards and Ethics—may not imply
that they originate from a:
A. Public utility
B. Credit bureau
C. Law office
D. All of the above

A

D. All of the above

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2
Q

The industry Code of Standards and Ethics applies to:
A. The developer
B. The buyer
C. The marketer
D. The developer and marketer

A

D. The developer and marketer

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3
Q

Any rescission rights of the consumer may be disclosed at or before closing. Rescission rights may
_________________.
A. Be extended
B. Not be waived
C. Be waived
D. None of the above

A

B. Not be waived

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4
Q

A young couple bought a unit week of time-share. In the Public Offering Statement, a rescission period of ___
days was given.
A. 3
B. 7
C. 10
D. 12

A

C. 10

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5
Q

A timeshare program may be created in any unit unless expressly prohibited by:
A. The project instruments
B. The Real Estate Commission
C. Local governing laws
D. The project instruments and local governing laws

A

D. The project instruments and local governing laws

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6
Q

The Commission may initiate private investigations:
A. In state only
B. Out of state only
C. Within or outside the state
D. In premiere tourist resort cities

A

C. Within or outside the state

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7
Q

Discloser of Rescission Rights shall appear in bold face and conspicuous type in the:
A. Contract
B. Public offering statement
C. Deed
D. Contract and public offering statement

A

D. Contract and public offering statement

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8
Q

A family, that had never seen the resort, bought a week of time-share. By law, they have ___ days to rescind.
A. 10
B. 7
C. 20
D. 15

A

D. 15

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9
Q

A time-share contract is voidable by purchaser until:
A. 10 day rescission has passed
B. Received a public offering statement
C. Both husband and wife have signed the contract
D. 10 day rescission has passed and received a public offering statement

A

D. 10 day rescission has passed and received a public offering statement

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10
Q

Before a developer can remove money from the escrow account, they must:
A. Have approval from county
B. Be 50% sold out
C. Complete pool
D. Construction, furnishings and landscape are substantially complete

A

D. Construction, furnishings and landscape are substantially complete

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11
Q

Price increases on time-share intervals shall not be announced more than ___ days prior to effective date.
A. 10
B. 60
C. 30
D. 5

A

B. 60

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12
Q

Misleading or deceptive representation would be telling the purchaser that:
A. They have 10 days to rescind
B. They can exchange their week through an exchange company
C. They will never have to pay a maintenance fee
D. Have full use of the facilities

A

C. They will never have to pay a maintenance fee

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13
Q

It is acceptable to tell a purchaser that:
A. The maintenance fee will never increase
B. Taxes are exempt on a time-share project
C. They can exchange their week through an exchange company
D. Walt Disney will move next door

A

C. They can exchange their week through an exchange company

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14
Q

A time-share sale should be made on the basis of:
A. Investment
B. Tax Reform Act
C. Vacation experience
D. Resale

A

C. Vacation experience

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15
Q

Under the power and duties of the Commission, the Commission does not have the right to:
A. Initiate private investigations outside the state
B. Revoke or suspend the registration of a time-share project
C. Use the amenities of the resort at will
D. Prescribe to a Developer forms for submitting information

A

C. Use the amenities of the resort at will

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16
Q

A public offering statement, to be valid, must be:
A. Signed
B. Dated
C. Recorded
D. Signed and dated

A

D. Signed and dated

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17
Q

Any timeshare installment share must provide all disclosures required by the:
A. Interstate Land Sales Registration Division
B. Civil Rights Act of 1964
C. Title insurance policy
D. Federal Truth-in-Lending Act

A

D. Federal Truth-in-Lending Act

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18
Q

On the federal level, the ____________________ agency has taken the most active regulatory role relating to
sales and marketing.
A. Department of Labor
B. Department of Agriculture
C. Federal Trade Commission
D. Department of Tourism

A

C. Federal Trade Commission

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19
Q

In order for a deed to be valid, which of the following need to be included?
A. Signature of the grantee
B. Consideration
C. A grantor having legal authority to execute deed
D. Consideration and the grantor having legal authority to execute deed

A

D. Consideration and the grantor having legal authority to execute deed
The developer shall not be required to prepare and distribute a Public Offering Statement

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20
Q

The developer shall not be required to prepare and distribute a Public Offering Statement if the Developer has
registered and there has been issued a Public Offering Statement or similar discloser document which is
provided to the purchasers under the following:
A. Securities and Exchange Act of 1933
B. Fair Housing Amendment of 1989
C. Federal Interstate Land Sales Full Discloser Act
D. Securities and Exchange Act of 1933 and Federal Interstate Land Sales Full Discloser Act

A

D. Securities and Exchange Act of 1933 and Federal Interstate Land Sales Full Discloser Act

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21
Q

A Public Offering Statement need not be prepared if delivered in the case of:
A. A Developer sells his personal time-share unit
B. A Marketer for the Developer sells his personal unit
C. Group reservations made for fifteen (15) or more people as a single transaction between a hotel for
hotel accommodations where deposits are made and held for more than three (3) years in advance
D. None of the above

A

C. Group reservations made for fifteen (15) or more people as a single transaction between a hotel for
hotel accommodations where deposits are made and held for more than three (3) years in advance

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22
Q

The Tennessee Time Share Act provides for cancellation of a contract 10 days after signing or 15 days if
purchaser has not seen the project. Who may cancel the contract?
A. The purchaser only
B. The developer only
C. The developer and the purchaser, by mutual consent
D. Any of the above

A

D. Any of the above

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23
Q

The “Holder in Due Course Rule” promulgated by the Federal Trade Commission (F.T.C.) in 1975 was designed
to preserve the claims of consumers who purchased goods and services on an installment basis whose
contract are subsequently sold or assigned to a third party. This rule applies to:
A. Right-to-use timeshare programs
B. Camping membership
C. Non-fee time-share
D. All of the above

A

D. All of the above

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24
Q

A time-share salesperson could be in violation of Securities Act of 1933 if they sold time-share as:
A. Rental pool
B. Resale of unit for profit
C. Whole ownership
D. Rental pool and resale of unit for profit

A

D. Rental pool and resale of unit for profit

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25
Q

Under the Truth-in-Lending Act, which of the following disclosures are not required?
A. Identity of creditor
B. Amount financed
C. Names of spouse and children
D. Annual percentage rate

A

C. Names of spouse and children

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26
Q

Disclosures by the Federal Truth-in-Lending Act include:
A. Late charges
B. Insurance
C. Late charges and insurance
D. None of the above

A

C. Late charges and insurance

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27
Q

The purpose of the Truth-in-Lending Act and Regulation A is to:
A. Disclose the cost of credit
B. Protect against race discrimination
C. Insure purchaser gets seven (7) full days of use
D. There is no Truth-in-Lending Act

A

A. Disclose the cost of credit

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28
Q

Regulation Z places limitations on what you can say about financial terms on advertising or oral sales
presentations. If you use the amount of percentage of down payment or finance charge, you must include:
A. Number of payments
B. Period of payments
C. Amount of payments
D. All of the above

A

D. All of the above

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29
Q

If a salesperson violates Regulation A and/or the Truth-in-Lending Act, who is held responsible?
A. The developer
B. The project director
C. The salesperson
D. The resort manager

A

C. The salesperson

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30
Q

What is the Tennessee Real Estate Commission (TREC)?

A

The Judicial Body of the Real Estate industry in Tennessee

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31
Q

Following discriminatory practice, you should make complaint within ________ Days

A

180

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32
Q

What is a time share estate?

A

Ownership or leasehold estate in property devoted to a time-share fee, tenants in common, time span
ownership, interval ownership, and a time share lease

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33
Q

What is an acquisition agent?

A

. Licensed and attempts directly to encourage any person to attend a sales presentation for a time share
program

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34
Q

What is an exchange agent?

A

Agent for an exchange program

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35
Q

What is a purchaser?

A

Anyone who buys a time share

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36
Q

What is a Sales agent?

A

Person acting as a seller of any Time Share contract (only sell under specific time share
developer)Anyone who sells a time share

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37
Q

What is a person that sells more than 5 time shares a year that are not their own?

A

Time Share Resale Broker

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38
Q

What is a unit?

A

Real property improvements in a project which is divided into Time share intervals

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39
Q

What is a managing agent?

A

Person with management duties and responsibilities and obligations of a Time share program

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40
Q

What are time share units?

A

Time share units can be created in any unit unless 1) expressly prohibited by project instruments or 2)
local governing laws

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41
Q

. What should be included on the Public Offering Statement?

A

The Public Offering Statement should contain:
 Name of county where property is located
 Legal description of property
Identifications of time periods by letter, name and number
 Identification of time share estates and how many units can be time share
 Common expenses and voting rights
 Any restrictions on use, occupancy, alterations or alienation of time share units
 Ownership interest/maintenance provisions / replacement

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42
Q

. ___________________ must be provided to each purchaser of a timeshare.

A

Public Offering Statement

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43
Q

When do you have to give a Public Offering Statement? What is the exception?

A

Must be provided to each purchaser of a Time Share EXCEPTION: developer was registered and PO
statement was provided to purchaser under Security and Exchange Act etc., then the owner of the
property is not required to provide a Public Offering Statement when conveying to another individual

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44
Q

What is an Escrow of Deposits?

A

When a purchaser gives deposit money it is placed in an account of an independent escrow co and held
100% during cancellation period

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45
Q

Active licensees must have ___________________________________ coverage.

A

Errors and Omissions

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46
Q

. In __________________________, the contract is voidable by the purchaser or the developer, until he has received
____________________________.

A

Mutual Rights of Cancellation Public Offering statement

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47
Q

. In the Mutual Rights of Cancellation, the contract is voidable by the purchaser or developer until he has received a
public Offering statement:

___ days if onsite inspection was made

___ days if no onsite inspection was made

A

10
15

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48
Q

. In the Disclosure of Rescission Rights, you may cancel a contract. It must be in boldface and conspicuous type in
every ________________________ and every ________________________.

A

Public Offering Statement contract for sale below signature

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49
Q

Cancellation of contract is without penalty if they follow the Disclosure of Rescission rights. It must be refunded
within _________ days after receipt of notice.

A

30

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50
Q

True or False? Misleading advertisement is unlawful.

A

True

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51
Q

When can the Commission issue a cease and desist order?

A

If a developer has not registered a timeshare program

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52
Q

. Prize or gift promotional offers are only okay under what 2 circumstances?

A

A. Under sponsorship and with approval of firm with whom Licensee is affiliated and
b. In writing signed by licensee with disclosure of all pertinent details.

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53
Q

What cannot be paid to any person who does not hold a real estate license?

A

Cash rebates, cash gifts, and cash prizes.

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54
Q

If for any reason, a guest has not received their gifts within a period of ________, they may be given the gift or the
cash equivalent.

A

72 hours

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55
Q

What are the powers of the real estate commission?

A

They can fine licensees, they can suspend your license, they can refer you to a court of law, their
investigators can come by at any time during business hours to see any of your records, and they can
close a development.

56
Q

. The real estate commission forms all the rules in accordance with the
_____________________________________.

A

Tennessee Code Annotated

57
Q

What are the prerequisites for licensing?

A

Honest
 18 years of age
 resident of state
 not criminal
 not on probation

58
Q

True or False? An applicant who has passed the exam within the last 6 months is not necessarily qualified for a
license.

A

True

59
Q

What is the renewal fee for the license?

A

$75

60
Q
  1. The original license fee is $_______ Plus $_______________ for education and recovery fee
A

$90 $1

61
Q

You must renew your license _______ days prior to expiration

A

60

62
Q

You must make a minimum passing score of ________% on your license exam.

A

70

63
Q

If you terminate your affiliation, you have _______ days to notify the Commission.

A

10

64
Q

. Example: If you broker tells you to sell only to a particular group, and you do as you were instructed… you are guilty
of _________________.

A

Discrimination

65
Q

What are the requirements for a contract and agreement to be made?

A

offer and acceptance
 valid consideration
 competent parties
 legal purposes
reality of consent

66
Q

Disclosure of everything related to a loan is considered _____________________________.
It came into being when the banking industry was deregulated.

A

Truth In Lending

67
Q
  1. ________________________ is a consumer credit protection law which is a part of Truth in Lending.
A

Regulation Z

68
Q

. When does your license expire?

A

2 years less 1 day from the date of issue

69
Q

. How do you get reinstated if you let your license expire?

A

The penalty is $50 per month for four months, then $100 per month up to nine months, after that you
must retest

70
Q

Who is the developer? Can they be refused a license or registration?

A

The seller. Yes, if they are 1) immoral or 2) financially unstable

71
Q

What is an example of an exchange agent?

A

RCI Agent

72
Q

What can be a timeshare?

A

. Anything, unless 1) prohibited by other document or 2) local regulations

73
Q

What is a project instrument?

A

All documents associated with the timeshare

74
Q

If property is not a timeshare, what is it?

A

Rental or whole ownership

75
Q

When do we present the Public Offering Statement?

A

First thing in deeding. Must have rescission statement on it.

76
Q

What is the form by which nearly all business with the commission is conducted after licensing?

A

TREC-1

77
Q

. When one of the contract essentials is missing, the contract is _________________________________.

A

Voidable

78
Q

. How long do you have to spend as an affiliate before applying to be a broker?

A

3 years

79
Q

. How long after passing the test do you have to apply for a license?

A

6 months then re-test

80
Q

. Whose job is it to make sure that you renew your license?

A

The Licensee

81
Q

What is an example of a voidable contract?

A

Lacks Enforceability

82
Q

Who is responsible for misleading advertising?

A

Licensee placing advertising

83
Q

What is the most important broker responsibility?

A

Informing rep about escrow

84
Q

If the developer’s former partner is going bankrupt, is that developer’s license in jeopardy?

A

No

85
Q

. Before a timeshare is a timeshare, what is it?

A

Project

86
Q

Can you indicate that a prospective guest has won a prize?

A

No – unless they have actually won

87
Q

Can you misstate the value of gifts promised?

A

No

88
Q

How far ahead can you indicate a price increase?

A

60 days

89
Q

. Do you have to be a citizen to be licensed with TREC?

A

No

90
Q

What is the purpose of the TN real estate broker license act of 1973?

A

Protect the Public

91
Q

What are adverse facts?

A

Conditions or occurrences that have negative impact on the value of the real estate, significantly reduce
the structural integrity, or significant health risks

92
Q

What is Corporeal?

A

The right to possess visible, tangible real property or personal property

93
Q

. What is Incorporeal?

A

. Non possessory rights, intangible rights in real property (right of way, easements, licenses)

94
Q

What Act says that the Real Estate Commission has to give you any charges in writing if your license is threatened?

A

Uniform Administrative Procedures Act

95
Q

What is the charge for any person acting as a broker, affiliate broker, time share salesperson, or acquisition agent
without first obtaining a license?

A

Class B misdemeanor

96
Q

. Number of Real estate commission members?

A

9

97
Q

What is the term for members of TREC?

A

5 years

98
Q

Who appoints the members of TREC?

A

Governor

99
Q

What are the three grand divisions and how many members of TREC are from each division?

A

East, West, Middle 3

100
Q

Who approves Real Estate schools?

A

State of TN

101
Q

What is the liability of the Real Estate Education and Recovery Account?

A

Shall not exceed $15,000 per transaction or $30,000 for the duration of any licensees career

102
Q

What must be prominently displayed in the broker’s principle place of business?

A

All Licenses’

103
Q

What is a premier Resort City?

A

Must have a population of 3,000 or more and 40% or more assessed value is hotels, restaurants, tourists
gift shop, etc.

104
Q

. How long a term is the Executive Director of The TN Real Estate Commission appointment?

A

4 years

105
Q

How long is the Statue of Limitations for Record Keeping for TREC transactions?

A

4 years

106
Q

What is the penalty for Involuntary Discrimination?

A

1
st
- $10,000, 2nd
-$25,000, 3rd
-$50,000

107
Q

. What is the fee to move your license or put it in retirement?

A

$25

108
Q

What is the fee to change your address?

A

$0

109
Q

What are the essentials of a contract?

A

A) Offer and Acceptance B) legal purposes C) consideration D) Reality of consent E) Competent parties

110
Q

Who can pay a licensee commission?

A

Broker

111
Q

How are commissions determined?

A

Negotiated never fixed

112
Q

When are real estate Commissions collected?

A

At time of closing- paid to t/s agents after rescission

113
Q

What are the restrictions for creating a time share unit?

A

. It cannot be created if 1) expressly prohibited by project instruments or 2) local governing laws

114
Q

What is excluded from the Truth in Lending?

A

Property Value or Sales Commission

115
Q

How long does a Time Share Resort have to amend an incomplete or inadequate public offering statement?

A

45 Days

116
Q
  1. How long is the rescission for Camping Contracts?
A

15 Days

117
Q

How many members are on the TN Human Rights Commission?

A

9

118
Q

. How are the Members of the TN Human Rights Commission divided?

A

3 from each grand division (west, middle, east)

119
Q

What is the term of a TN Human Rights Commission member?

A

6 Years

120
Q

What is the penalty for cancellation?

A

No Penalty

121
Q

How much of a deposit must be in the Independent Escrow?

A

100%

122
Q

Who is ultimately responsible for funds even after paid over to an escrow company?

A

The Broker

123
Q

What is the result if the developer cancels a contract during applicable rescission period?

A

. Purchaser must return all materials in good condition, if materials not returned developer can deduct
cost of materials

124
Q

. What are the requirements to sell timeshare?

A

License and must be affiliated with firm which is affiliated with a registered T/S project

125
Q

. When did Regulation Z come into effect?

A

1969

126
Q

. Why was the Truth in Lending and Regulation Z passed?

A

To disclose all facts in a lending transaction

127
Q

What is a managing Agent?

A

Person with management duties and responsibilities and obligations of a Time Share Program

128
Q

Is Errors and Omissions Insurance required for Inactive or Retired licensees?

A

No

129
Q

How many of the Members of the TN Real Estate Commission are from the General Public?

A

2

130
Q

The Truth in Lending is part of what legislation?

A

Consumer Protection Act

131
Q

In Civil liability the commission would be defended by _____________________?

A

The AG

132
Q

What is the penalty for any person acting as a broker, affiliate broker, time share salesperson, or acquisition
agent without first obtaining a license?

A

Class B misdemeanor

133
Q

Whose responsibility is it to select the chair and Vice Chair of the TREC

A

TN Real Estate Commission(TREC)

134
Q

Who has custody and charge of the Seal?

A

. The commission Executive Director

135
Q

What are the liability limits of the R.E. Education and Recovery Account?

A

$15,000/ trans or $30,000 for the duration of any licensees career

TN Timeshare Practice (1 decks)

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