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WA Managing Broker Exam > Rea Estate Careers and Real Estate License Law > Flashcards

Rea Estate Careers and Real Estate License Law Flashcards

1
Q

Who administers the Real Estate License Law?

A

Washington State Department of Licensing.

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2
Q

Who is responsible for preparing and conducting the real estate licensing exams?

A

The Real Estate Commission

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3
Q

Real Estate Commission

A

Six members appointed by the governor. They offer suggestions to the director. Two members from West of the Cascades and two from East.

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4
Q

Real Estate Commissioner requirements

A

Five years real estate experience.

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5
Q

Center for Real Estate Research

A

Created by the commission to study statewide real estate concerns such as affordable housing. May recommend changes to license law

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6
Q

What role does the Attorney General play?

A

Advisor to the Director on legal matters

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7
Q

When is a real estate license not required?

A

Land developers and building
contractors who sell their own
land don’t need a real estate
license to do so.

An attorney in fact can sell
her principal’s land without a
real estate license when
acting without compensation.

People can buy/sell on their own behalf without a license (including on behalf of a group which they are a member).

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8
Q

When can out-of-state licensees sell real estate?

A

Concerning commercial real estate only without obtaining a WA license. They must have a written agreement with a WA brokerage, provide a copy of their license, and the WA Brokerage must maintain the records.

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9
Q

Affiliated Licensee

A

Affiliated licensee: a broker
or managing broker who is
licensed under a particular
firm.

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10
Q

Managing Broker

A

License issued to an individual. This licensee is authorized to work with and represent their firm, manage other licensees or a branch, and be the firms designated broker.

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11
Q

Broker

A

Individual license. Licensee authorized to work with and represent the firm, not manage or be a designated broker. Subject to heightened review if less than two years experience.

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12
Q

Designated Broker

A

Designated broker:
* has full liability for the
firm’s activities;
* must have a managing
broker’s license; and
* must have control over
the firm’s operational
and/or financial decision making

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13
Q

Managing Broker License Requirements

A
  • 18 years old
  • High school or equivalent
  • 3 years experience (or substitute: one year as real estate attorney, five years in a field allied to real estate)
  • 90 clock hours (30 advanced real estate law, 30 brokerage management, 30 business management)
  • pass managing brokers exam
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14
Q

Brokers License Requirements

A
  • 18 years old
  • High school diploma or equivalent
  • 90 Clock Hours (60- real estate fundamentals, 30 real estate practices)
  • Pass brokers exam
  • Exam results are valid for one year
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15
Q

Interim License

A
  • applicant for a brokers license can be issued an interim license on the day she’s notified that she passed the exam and the signed, dated and completed license form with fee are submitted to the department. This is valid for up to 45 days.
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16
Q

When does a license expire?

A

Two years after the date of issuance. If the renewal is late, the licensee must pay a penalty.

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17
Q

What is the continuing education requirement?

A

90 hours for the first renewal (30 - advanced real estate, 30- real estate law, 30 - elective).

30 hours each subsequent renewal, including 3 hours of core curriculum.

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18
Q

What happens if you don’t renew your license within a year after expiration?

A

It is cancelled. It can be reinstated within two years after cancellation if you:
- successfully complete 60 clock hours of courses within one year of applying for reinstatement (incl. 30 hour real estate law)
- pay back renewal fees + penalties
- pay reinstatement penalty

If it has been more than two years the licensee has to satisfy the requirements for the original license.

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19
Q

When is a license inactive?

A

When it has been turned over to the director for any reason. Inactive licensees are considered unlicensed.
- Inactive licenses must be renewed before the renewal date
- Cannot be renewed if there are disciplinary actions pending
- Failure to renew results in cancellation
- If a license has been inactive for more than three years, licensee must complete 30 hour course.

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20
Q

What happens to real estate license fees?

A

They are placed in the Real Estate Commission Account in the state treasury.

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21
Q

Is Dual agency legal?

A

Yes with the written consent of both parties.

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22
Q

When is an agency disclosure required?

A

In every transaction before the party signs a purchase and sale agreement. It must be in writing.

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23
Q

What duties does an agent owe to all parties?

A

An agent owes all parties the
duties of reasonable care and skill, honesty and good faith,
presentation of all written communications, disclosure of
all material facts, accounting, providing a real estate agency
law pamphlet, and making a written agency disclosure

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24
Q

What duties does an agent owe to the principal?

A

An agent also owes his
principal the duties of loyalty, disclosure of conflicts of interest, confidentiality, advising the principal to seek expert
advice, and good faith and continuous effort. Duties of confidentiality and accounting do not expire with the agency.

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25
Q

What is Vicarious Liability?

A

A legal doctrine under which a
principal can be held liable for
harm to third parties resulting
from an agent’s actions; no
longer applies to real estate
agency relationships in
Washington.

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26
Q

Imputed knoweldge

A

Under WA law, a principal is not held to have knowledge of facts known by the agent.

27
Q

What must the designated broker do in investigations?

A

A designated broker must
cooperate with an
investigation into an affiliated
licensee’s conduct by
providing access to records
and responding to written
requests for information, but
does not need to respond
to a subpoena that does not
specifically name the
designated broker

28
Q

Who can terminate a licensees affiliation with a firm?

A

The relationship between a firm
and an affiliated licensee may be terminated at any time by either party. When an affiliation is terminated, the
licensee’s license becomes inactive. It remains inactive until the licensee joins another firm.

29
Q

What happens if a broker is terminated for cause?

A

When a broker or managing broker has been terminated because of conduct that would be grounds for disciplinary action under the license law, the designated broker must send the Director a written statement of the facts surrounding the termination.

30
Q

What are the requirements for a firm licensed in Washington?

A
  • Maintain records repository accessible to the Director’s representatives
  • Display licenses of affiliated licensees
  • Submit a change of address form to the director promptly if the firm moves
31
Q

Can two businesses share the same office?

A

Yes, if the other business is compatible with real estate brokerage activities. All records must be kept separate.

32
Q

Do branch offices require a separate license?

A

Not if they only concern a certain subdivision/tract, or are within 35 miles of a licensed office.

33
Q

Can a firm be licensed in WA and not have an office?

A

Yes, and they do not need an office in WA if they are headquartered in another state where they are licensed but must maintain a trust account and keep records for WA transactions at a registered location.

34
Q

What is a “blind ad”?

A

Blind ad: an advertisement
placed by a real estate
licensee that does not include
the firm’s name.

A blind ad violates the license law unless it is for the licensee’s own property (though it must disclose that the seller/landlord has a real estate license)

35
Q

What guidelines does a licensee need to follow for advertising online?

A

A licensee should fully disclose his licensed status in all internet communications.

Full disclosure includes:
* licensee’s name and firm,
* city and state of licensee’s office,
* city and state of firm’s main office, and
* the states in which the licensee and the firm are licensed

36
Q

What is an assumed name?

A

A name used by a firm, with the Director’s permission, as long as there is no intent to mislead the public. The assumed names expire at the same time as the license.

37
Q

What are the requirements of Team names?

A

The firms name must also be included in any advertisement and must not suggest that the team is it’s own legal entity.

38
Q

Comingling

A

mixing trust funds with personal funds

39
Q

Conversion

A

occurs when a licensee uses others’ funds for his own purposes

40
Q

Are trust accounts required to be interest-bearing?

A

Yes, with the exception of property management accounts.

40
Q

When do trust funds need to be deposited?

A

No later than the first business day following
receipt of the funds. For purposes of this rule, Saturday is not considered to be a business day

If authorized to do so in the offer, a firm may hold a buyer’s earnest money check instead of depositing it, pending the seller’s acceptance of the offer

41
Q

When are funds put in pooled accounts?

A

When the amount is $10k or less it is deposited in a pooled, interest-bearing account. Interest is paid to the state treasurer (after bank fees are deducted) and divided 75% to the Housing Trust Fund and 25% to the Real Estate Education Account.

42
Q

How are property management funds handled?

A

They are exempt from the pooled account so the owner may receive accrued interest. If commissions are earned by the manager, they must be removed from the account at least monthly.

43
Q

What can be paid from the trust account?

A

Commissions to the firm. Firm expenses and commissions to affiliated licensees must be transferred to the firm’s general account first.

44
Q

How long do transaction records need to be kept?

A

Three years. They must be kept at a location where the firm has an office for one year, and once the transaction has been closed for one year can be moved to central location. A list of those transactions must be kept at the firm’s licensed offices.

45
Q

How are commissions handled?

A

The commission belongs to the firm. Any commission must be paid to the firm and then paid to the licensee, this includes commission splits.

46
Q

Can earnest money be a promissory note?

A

Yes, if it is agreed to in the purchase and sale agreement.

47
Q

Can a licensee act as a closing agent?

A

Yes, if she represents buyer and/or seller in the transaction and is designated on the PSA. The licensee may not charge either party for closing services unless the licensee is also a licensed escrow officer.

48
Q

What are the components of a property managment agreement?

A

It must be in writing and include compensation, type of property, number of units/square footage, whether the manager may collect or distribute funds and security deposits, and how often summary statements are required to be provided to the property owner.

49
Q

What act governs (un)professional conduct?

A

URBPA - Washington’s Uniform Regulation of Business and Professions Act.

50
Q

What does URBPA Cover?

A
  • Moral turpitude (dishonesty, corruption)
  • Deceptive advertising
  • Malpractice
  • Exceeding the scope of practice
  • Misrepresentation
  • Inadequate supervision
  • Unlicensed practice
51
Q

What acts are illegal under the license law?

A
  • Conversion
  • Contingent appraisals (accepting an appraisals and reporting a predetermined value)
  • Failure to disclose interest in appraised property
  • Falsely claiming to belong to an association
  • Failure to disclose licensee status
  • Kickbacks
52
Q

Can the director suspend a license for personal transgressions?

A

Yes, non-payment of federal or state education loan, or failure to comply with child support or visitation order. License reinstatement is automatic upon repayment or compliance.

53
Q

How long does the licensee have to request a hearing after receiving a statement of charges?

A

20 days. If there is no request, the licensee is considered in default and the Director may enter a decision based on available information.

54
Q

How much notice does the department need to give the licensee before a hearing?

A

A licensee must be given at least 30 days’ notice before a disciplinary hearing is held. If a licensee fails to show up for a scheduled hearing, the hearing will be held in the licensee’s absence

55
Q

If sanctions are ordered, when do they take effect?

A

If the accusation is proved, the Director may impose sanctions. They are filed with the Director’s office and mailed to the licensee. They take effect as soon as the order is received by the licensee.

56
Q

Can the licensee appeal a disciplinary hearing result?

A

Yes, in superior court. The appeal must be filed within 30 days of the Director’s decision and order.

The licensee must post a $1k appeal bond to cover court costs and pay for a copy of the transcript of the hearing that is certified by the director.

57
Q

Are the sanctions stayed during appeal?

A

Not automatically, though the Director may choose to do so as long as the conditions necessary to protect the public are imposed.

58
Q

What sanctions can the Director impose?

A
  • Revoke or suspend the license
  • Restrict real estate activities
  • Censure or reprimand
  • Deny initial or renewal license application
  • Require education
  • Fine up to $5k per violation
59
Q

What happens to fines imposed by the Director?

A

All fines are placed in the Real Estate Education Account and used for licensee education

60
Q

When does the Director need to involve other agencies?

A
  • Seek an injunction from superior court
  • Refer criminal charges to prosecutor or AG
61
Q

What type of crime is a violation of real estate license law?

A

Gross misdemeanor

62
Q
A
63
Q

How long does the licensee have to notify the department of legal action?

A

The licensee must notify the Real Estate Program Manager within 20 days of learning of 1) a criminal complaint, indictment or conviction, or 2) any civil court order, verdict or judgement if it involves real estate activities.

WA Managing Broker Exam (18 decks)

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