Section 5 Vocabulary Flashcards
Blind Advertising
Advertising that is not clear that a real estate brokerage is involved, and the real estate broker is not clearly identified.
Commingle
Mixing trust funds from another with the agent’s personal or business funds.
Conflicting Demands
Both buyer and seller claim the right to earnest monies.
Conversion
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.
Corporations
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.
Corporation Sole
Usually a religious organization, CANNOT register as real estate brokerage.
Deposit
A down payment and part of the purchase price paid in cash up front, reducing the amount of the purchase price, loan or mortgage.
Earnest Money
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.
Escrow Account
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.”
Escrow Disbursement Order
A determination by FREC as to who is entitled to disputed funds.
General Partnership
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.
Good-Faith Doubt
Procedure when it is not clear which party should receive the escrowed property.
Interpleader
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.
Kickback
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.
Limited Liability Company (LLC)
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.
Limited Liability Partnership (LLP)
Provides each of its individual partners protection against personal liability – not just limited partners
Limited Partnership
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.
Litigation
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.
Mediation
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.
Ostensible Partnership
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.
Price Fixing
Brokerages agreeing among themselves to charge a certain set commission.
Trade Name
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.
