Regulation of Business Conduct

Question 1

Provide real estate brokerage services means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 1

▪ broker may retain a licensee as an independent contractor, employee, or otherwise

Question 2

Commissions and Rebates

Answer 2

An individual licensed by this State may divide a fee that is earned in this State with an out-of-state licensee if the other state so allows.

Question 3

A licensee must include in every advertisement

Answer 3

・ Real estate licensees must include their name or designated name and the name of the business they are affiliated with in a meaningful and conspicuous way.

・ A designated name is an individual name other than the licensee’s full legal name.

・ A designated name can include a first name, nickname, or last name.

・ Licensees must have their designated name approved by the Commission before using it.

Question 4

Trust account

Answer 4

▪ “trust money” is money that a person entrusts to a real estate licensee to hold for someone for the benefit of the owner and a purpose that relates to real estate

▪ a real estate licensee must promptly deliver trust money to the broker

Question 5

Trust account

Answer 5

▪ the broker must deposit earnest money in a non-interest bearing escrow or special account (trust account) not more than 7 business days after a sales contract is entered, unless the broker receives written instructions otherwise

Question 6

Trust account

Provide real estate brokerage services means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 6

▪ “beneficial owner” means a person, other than the owner of the trust money, for whose benefit, a real estate licensee is entrusted to hold trust money

for example, a buyer is the “owner” of an earnest money deposit, and the “beneficial owner” is the seller

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ broker must submit notice of business entity to the Commission

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ broker may provide real estate brokerage services through a corporation, limited liability
company, or partnership

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ operation as a business entity does not relieve broker or any affiliated licensee of individual liability

Question 7

Trust account

Answer 7

･･The real estate transaction is consummated or terminated.
･･The broker receives proper written instructions from the owner and beneficial owner.
･･An interpleader is filed by the broker.

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ broker must submit notice of business entity to the Commission

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ operation as a business entity does not relieve broker or any affiliated licensee of individual liability

Question 7

Trust account

Answer 7

▪ “beneficial owner” means a person, other than the owner of the trust money, for whose benefit, a real estate licensee is entrusted to hold trust money

for example, a buyer is the “owner” of an earnest money deposit, and the “beneficial owner” is the seller

Question 7

▪ a real estate broker must maintain trust money in a trust account until

Answer 7

･･The real estate transaction is consummated or terminated.
･･The broker receives proper written instructions from the owner and beneficial owner.
･･An interpleader is filed by the broker.

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ broker must submit notice of business entity to the Commission

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ broker may provide real estate brokerage services through a corporation, limited liability
company, or partnership

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ broker must submit notice of business entity to the Commission

Question 7

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 7

▪ operation as a business entity does not relieve broker or any affiliated licensee of individual liability

Question 7

Trust account

Answer 7

▪ “beneficial owner” means a person, other than the owner of the trust money, for whose benefit, a real estate licensee is entrusted to hold trust money

for example, a buyer is the “owner” of an earnest money deposit, and the “beneficial owner” is the seller

Question 7

▪ a real estate broker must maintain trust money in a trust account until

Answer 7

･ The real estate transaction is consummated or terminated.
･The broker receives proper written instructions from the owner and beneficial owner.
･ An interpleader is filed by the broker.

Question 8

Distribution of trust money

Answer 8

▪ if the owner or beneficial owner of the trust money fails to complete the real estate transaction, in the broker’s sole discretion, the broker may distribute the trust money

Question 9

Distribution of trust money

Before distributing the trust money when the owner or beneficial has failed to complete the real estate transaction, the real estate broker must notify both principal parties that the real estate broker intends to distribute the trust money and specify the intended distribution

Answer 9

▪ either party may prevent distribution by filing a protest within 30 days

▪ if neither party submits a timely protest, the money is distributed according to
the broker’s notice

Question 10

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 10

▪ broker must submit notice of business entity to the Commission

Question 10

A real estate broker must maintain trust money in a trust account until

Answer 10

･ The real estate transaction is consummated or terminated.

･The broker receives proper written instructions from the owner and beneficial owner.

･ An interpleader is filed by the broker.

Question 10

Trust account

Answer 10

▪ “beneficial owner” means a person, other than the owner of the trust money, for whose
benefit, a real estate licensee is entrusted to hold trust money

for example, a buyer is the “owner” of an earnest money deposit, and the “beneficial owner” is the seller

Question 11

Account termination

Answer 11

When the duty of the real estate broker to maintain trust money in an account terminates, the real estate broker must promptly account for all trust money

Question 12

Provide real estate brokerage services” means to engage in any of the activities for which a license is required

(see activities requiring licensure in previous section)

Answer 12

▪ broker must submit notice of business entity to the Commission