Section 5 Vocabulary

Question 1

Blind Advertising

Answer 1

Advertising that is not clear that a real estate brokerage is involved, and the real estate broker is not clearly identified.

Question 2

Commingle

Answer 2

Mixing trust funds from another with the agent’s personal or business funds.

Question 3

Conflicting Demands

Answer 3

Both buyer and seller claim the right to earnest monies.

Question 4

Conversion

Answer 4

The appropriation of property belonging to another. It is illegal for a broker to convert trust funds to his own use – even if it is just temporary.

Question 5

Corporations

Answer 5

Are not an actual person, yet are treated as such by having legal rights and taking on the tax and legal liabilities of the company.

Question 6

Corporation Sole

Answer 6

Usually a religious organization, CANNOT register as real estate brokerage.

Question 7

Deposit

Answer 7

A down payment and part of the purchase price paid in cash up front, reducing the amount of the purchase price, loan or mortgage.

Question 8

Earnest Money

Answer 8

Also called a binder deposit, escrow, or a good-faith deposit is a sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

Question 9

Escrow Account

Answer 9

In real estate, the earnest money cannot be placed into a broker’s general operating account. Instead, it must be placed in special account for the purpose of “escrowing” or placing the money in “trust.”

Question 10

Escrow Disbursement Order

Answer 10

A determination by FREC as to who is entitled to disputed funds.

Question 11

General Partnership

Answer 11

When more than one person joins together to operate a business, they share in the profits and responsibilities including the legal and tax liabilities. Each individual is liable for all the debts.

Question 12

Good-Faith Doubt

Answer 12

Procedure when it is not clear which party should receive the escrowed property.

Question 13

Interpleader

Answer 13

Florida law provides for a broker who has chosen NOT to have a right to any of the deposit to submit the matter to the courts and request this action. By using this, the broker deposits the funds with the clerk of the court and is relieved of further duties in overseeing the matter.

Question 14

Kickback

Answer 14

A payment for doing a task related to a real estate transaction. However, the task itself cannot be something that actually requires a real estate license to perform. They are legal only under limited conditions.

Question 15

Limited Liability Company (LLC)

Answer 15

Has both the characteristics of a corporation and a partnership. It’s like a corporation in that it protects the owners against personal liability. It’s like a non-corporate business in the way profit or loss is passed straight to the owners for tax purposes rather than taxed at the company level.

Question 16

Limited Liability Partnership (LLP)

Answer 16

Provides each of its individual partners protection against personal liability – not just limited partners

Question 17

Limited Partnership

Answer 17

When there are two or more persons involved in the business, however, some are designated as general partners and others are designated as limited partners.

Question 18

Litigation

Answer 18

The term used to describe proceedings initiated between two opposing parties to enforce or defend a legal right. As a settlement procedure it takes one of two forms: either as an Interpleader or as a Declaratory Judgment.

Question 19

Mediation

Answer 19

the attempt to settle a legal dispute through active and neutral participation of a third party (mediator) who works to find points of agreement and encourage those in conflict to agree on a fair result.

Question 20

Ostensible Partnership

Answer 20

Not a real partnership. Rather it is the appearance of a partnership due to how multiple individuals are presenting themselves to the public giving the appearance that they are a partnership. When this happens, each party can be held liable for the actions of the other.

Question 21

Price Fixing

Answer 21

Brokerages agreeing among themselves to charge a certain set commission.

Question 22

Trade Name

Answer 22

If the brokerage is registered as a partnership or a corporation (instead of as a sole proprietor), the sign must contain the name of the firm or corporation or trade name of the firm or corporation, together with the name of at least one of the brokers.