REGULATION OF LICENSEE ACTIVITIES - 2021 PSI GUIDE

Question 1

A real estate broker may perform duties and activities only under the direction and supervision of

a. a managing broker, branch manager, or designated broker.
b. only a managing broker.
c. only a branch broker.
d. only a designated broker.

Answer 1

a. a managing broker, branch manager, or designated broker.

Question 2

The relationship between a broker and a managing broker may be terminated

a. only by the broker.
b. only by the managing broker.
c. unilaterally by either the broker or the managing broker.
d. only by the designated broker.

Answer 2

c. unilaterally by either the broker or the managing broker.

Question 3

A designated broker must be

a. approved by the Real Estate Commission.
b. a licensed branch manager.
c. a licensed managing broker.
d. a person selected by DOL to manage a real estate firm

Answer 3

c. a licensed managing broker.

Question 4

Who CANNOT supervise real estate brokers?

a. A designated broker.
b. A managing broker.
c. A real estate broker.
d. A branch manager.

Answer 4

c. A real estate broker.

Question 5

Who, among the following, has the most authority in a real estate firm?

a. A broker
b. A managing broker
c. A branch manager
d. The designated broker

Answer 5

d. The designated broker

Question 6

The responsibilities of a designated broker may be delegated to

a. any licensed broker.
b. any licensed broker or a managing broker.
c. only a managing broker.
d. only to a branch manager.

Answer 6

c. only a managing broker.

Question 7

A record of delegations to managing brokers must be maintained by

a. the designated broker.
b. the branch manager.
c. a managing broker.
d. the DOL.

Answer 7

a. the designated broker.

Question 8

A designated broker has responsibility for funds required to be held by a real estate firm

a. as soon as they are received by the real estate firm.
b. only after they are received from the managing broker or broker.
c. only when a disbursement of funds is needed.
d. only if the monthly reconciliation of the trust account is out of balance.

Answer 8

b. only after they are received from the managing broker or broker.

Question 9

A designated broker may delegate the duty of supervising brokers to

a. any broker with at least 3 years’ experience.
b. any broker with at least 2 years’ experience.
c. a branch manager with at least 2 years’ experience.
d. a managing broker only.

Answer 9

d. a managing broker only.

Question 10

A designated broker’s delegation of the duty to handle funds safely must be

a. in writing.
b. approved by the Real Estate Commission.
c. approved by DOL.
d. be approved by a managing broker.

Answer 10

a. in writing.

Question 11

A broker with less than experience requires heightened supervision.

a. 3 years
b. 2 years
c. 1 year
d. 6 months

Answer 11

b. 2 years

Question 12

Which of the following is NOT required to be addressed in a designated broker’s written policy?

a. Intra-office dispute resolution
b. Procedures for referring home inspectors to buyers and sellers.
c. Review of brokerage service contracts
d. Levels of supervision of licensees

Answer 12

a. Intra-office dispute resolution

Question 13

Which of the following is required to be addressed in a designated broker’s written policy?

a. Level of supervision of all brokers
b. Agency relationships
c. Negotiation strategies
d. Office dress code

Answer 13

a. Level of supervision of all brokers

Question 14

A designated broker’s review of a broker service agreement involving a broker licensed for less than 2 years must be completed

a. within 2 business days of mutual acceptance.
b. within 5 business days of mutual acceptance.
c. within 2 business days after it is received by the designated broker.
d. within 5 business days after it is received by the designated broker.

Answer 14

b. within 5 business days of mutual acceptance.

Question 15

Which of the following is NOT a legally designated property management service?

a. Social activities management
b. Administrative management
c. Physical management
d. Financial management

Answer 15

a. Social activities management

Question 16

By contrast to the responsibilities a branch manager already has, which of the following is an additional responsibility that can be delegated by the designated broker?

a. cooperation with the DOL in an investigation.
b. overseeing branch licensees, employees, and contractors.
c. ensuring proper record maintenance.
d. ensuring that all persons employed at the branch location are properly licensed.

Answer 16

c. ensuring proper record maintenance.

Question 17

Which of the following is a condition for a licensee to be retained as an independent contractor?

a. The licensee handles only residential transactions.
b. The licensee handle only commercial transactions.
c. The licensee does not engage in dual agency.
d. Substantially all of the licensee’s compensation is for real estate brokerage services provided by
the firm.

Answer 17

d. Substantially all of the licensee’s compensation is for real estate brokerage services provided by
the firm.

Question 18

A designated broker must have a written policy that addresses

a. procedure for referral of home inspectors.
b. office dress code.
c. antitrust compliance.
d. office dispute resolution.

Answer 18

a. procedure for referral of home inspectors.

Question 19

Transaction records

a. must be kept at a storage facility provided by the DOL.
b. must be kept in hard copy form.
c. must be retained for 5 years.
d. may be kept electronically.

Answer 19

d. may be kept electronically.

Question 20

When may an unlicensed person legally receive a referral fee from a licensee?

a. An unlicensed person may not receive a referral fee.
b. When the person only provides referrals and compensation is not contingent on the licensee receiving compensation.
c. When the person who is referred agrees in writing.
d. Only when the person referred is a seller.

Answer 20

b. When the person only provides referrals and compensation is not contingent on the licensee receiving compensation.

Question 21

Which of the following is NOT considered unprofessional conduct of a real estate licensee?

a. Failure to obey court ordered child support or visitation
b. False advertising
c. Exceeding the speed limit in a motor vehicle
d. Helping an unlicensed person to practice a profession when a license is required

Answer 21

c. Exceeding the speed limit in a motor vehicle

Question 22

Which of the following is NOT a true statement?

a. A buyer’s broker may be paid by the seller’s broker.
b. A broker may be paid by a buyer.
c. A broker may be paid by a seller.
d. Payment of compensation establishes an agency relationship.

Answer 22

d. Payment of compensation establishes an agency relationship.

Question 23

All advertising done by a real estate firm must include the firm’s

a. logo.
b. name or assumed name.
c. telephone number.
d. street address.

Answer 23

b. name or assumed name.

Question 24

For a real estate firm to advertise using an unlicensed title or brand requires advance approval from

a. the DOL.
b. the Real Estate Commission.
c. a managing broker.
d. the designated broker.

Answer 24

d. the designated broker.

Question 25

Funds received by a broker from a client must be deposited in the firm’s trust account

a. by the next banking day.
b. within 2 calendar days.
c. within 2 banking days.
d. within 5 calendar days.

Answer 25

a. by the next banking day.

Question 26

If trust funds are claimed by more than one party, the designated broker must give all parties notice and distribute funds within

a. 5 days.
b. 10 days.
c. 30 days.
d. 45 days.

Answer 26

c. 30 days.

Question 27

Records of all real estate transactions must be maintained by the designated broker for

a. 3 years.
b. 2 years.
c. 4 years.
d. 5 years.

Answer 27

a. 3 years.

Question 28

Which of the following is NOT a property management service?

a. Physical management
b. Sale of the property
c. Administrative management
d. Financial management

Answer 28

b. Sale of the property

Question 29

Sally the seller just signed a purchase agreement. Her broker must deliver a copy to her within

a. a reasonable time.
b. 5 business days.
c. 3 business days.
d. 1 business day.

Answer 29

a. a reasonable time.

Question 30

A written policy regarding levels of supervision must be maintained by

a. all brokers.
b. all managing brokers.
c. all branch managers.
d. the designated broker.

Answer 30

d. the designated broker.

Question 31

By law, a property management agreement is NOT required to include

a. the firm’s compensation.
b. the authority to evict tenants.
c. the frequency with which summary reports will be made available.
d. the authorization, if any, to hold security deposits.

Answer 31

b. the authority to evict tenants.

Question 32

A broker may only be compensated by

a. the broker’s managing broker.
b. a buyer or seller the broker represents.
c. the designated broker with whom the broker is licensed.
d. the DOL.

Answer 32

c. the designated broker with whom the broker is licensed.

Question 33

A real estate firm may be compensated by more than one party to a transaction only if

a. the designated broker has permission from the DOL.
b. it is a residential transaction.
c. the parties consent, in writing, before signing an offer.
d. the parties consent, in writing, before the transaction closes.

Answer 33

c. the parties consent, in writing, before signing an offer.

Question 34

What is the maximum number of branch offices allowed by the DOL?

a. 1
b. 3
c. 5
d. There is no limit.

Answer 34

d. There is no limit.

Question 35

How frequently must summary statements be submitted by a property manager to the owner?

a. Weekly
b. Monthly
c. Quarterly
d. As agreed

Answer 35

d. As agreed