Study Guide Chapter 1 - 3

Question 1

How an appraiser’s fee is calculated and why?

Answer 1

Appraisers charge a fee based on the time and difficulty of the work. Appraisers are not paid commission - to reduce the possibility of a conflict of interest. If an appraiser were to be paid and a percentage of the appraised value, the temptation to exaggerate the value might prove irresistible. USPAP’s ethics rule states that it is unethical for an appraiser to accept compensation that is contingent on the value of the property.

Question 2

Speculative (spec) homes

Answer 2

Building “on speculation” involves purchasing one or more lots and constructing a home (or homes) without a buyer in advance of construction

Question 3

Custom homes

Answer 3

A custom builder constructs homes under contract with a buyer, often using building plans provided by architects or buyers

Question 4

Tract homes

Answer 4

Tract homes are a type of speculative building. A new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to build in the new subdivision.

Question 5

3 general categories of residential construction

Answer 5

Speculative (spec) homes, Custom homes, and tract homes

Question 6

Chapter 475, F.S Part I

Answer 6

Part I pertains to real estate brokerage. Real Estate licensees are responsible for knowing the provisions of this chapter. The Florida Real Estate Commission (FREC) implements, interprets, and enforces the regulatory provisions of Chapter 475

Question 7

Chapter 475, F.S. Part II

Answer 7

Part II pertains to real estate appraisers and sets forth the requirements for license and certified appraisers according to federal statute. The Florida Real Estate Appraisal Board (FREAB) regulates state-certified, licensed, and registered trainee appraisers.

Question 8

Chapter 475, Part III

Answer 8

Part III, the Commercial Real Estate Sales Commission Lien Act, gives a broker lien rights for earned commission. THis act applies only to commercial property (not residential property). The lien is only against the owner’s net proceeds (personal property) from the sale and does not attach to the commercial real property.

Question 9

Chapter 475, Part IV

Answer 9

Known as the Commercial Real Estate Leasing Commission Lien Act, gives a broker a lien rights for earned commission associated with a brokerage agreement to lease commercial real estate.

Question 10

Steps to acquire a license through mutual recognition

Answer 10

Real estate applicants approved for licensure under mutual recognition are exempt from the prelicense education course but applicant must demonstrate mastery of Florida’s real estate license law by passing a written Florida specific real estate license exam. The exam consists of 40 questions worth 1 point each. A grade of 30 points (75%) or higher is required to pass the exam. Individuals who receive a Florida Real Estate license under mutual recognition must fulfill the same post-license and continue education requirements as all other Florida real estate licensees

Question 11

What are the experience requirements of an individual wishing to be licensed as a broker?

Answer 11

Broker applicants must fulfill an experience requirement in addition to the education requirement. A broker applicant fulfills the experience requirement by having held an active real estate license for at least 24 months during the 5 years period preceding application to become a Florida Real estate broker.

Question 12

How can a broker applicant fulfill the experience requirement

Answer 12

1. The applicant has held and active sales sales associate license under 1 or more real estate brokers for at least 24 months during the 5 year period preceding application. The employment can be under FL real estate broker or a broker licensed in another state or in any foreign jurisdiction
2. The applicant held an active sales associate license while working as a salaried employee of a governmental agency and performing the duties authorized in Chapter 475, FS, for at least 24 mo. during the 5 yr preceding application
3. The applicant held an active BROKER license in another state or in any foreign jurisdiction for at least 24 mo. during the 5 yr period preceding application

Question 13

Can the experience requirement to become a broker be acquired by working under a owner-developer?

Answer 13

The experience cannot be earned by working for an owner developer unless the owner developer is a licensed broker who holds a current, valid, active real estate license

Question 14

Broker Post License Education

Answer 14

A broker applicant who holds a FL real estate sales assocaite license must fulfill the 45-hour post license education requirement before the initial sales associate license expires in order to be eligible to obtain a FL Broker License, even if the applicant is applying real estate experience from another state. If the broker applicant does not hold a Florida real estate sales associate license, the 45 hour post licensing education requirement does not apply

Question 15

Prima Facie Evidence

Answer 15

Legal term used to refer to evidence that is good and sufficient on its face (at first view) to establish a give fact or prove a case. Unless it is refuted by evidence to the contrary, prima facie evidence will prove a case (presumptive evidence). For example, a real estate license serves as a prima facie evidence that the licensee holds a current valid license

Question 16

Individuals and Business entities exempt from a real estate license

Answer 16

1. Property owners do not need a real estate license to buy, sell, exchange, or lease their own real estate.
2. Corporations, partnerships, trusts, and joint ventures may buy, sell, exchange, or lease their own property. Salaried employees of these business entities may buy, sell, exchange, or lease real property for their employer, provided the activity is incidental to their employment and they are not paid a commission or compensated on
   a transaction basis

Question 17

What salaried employees that are exempt from real estate licensure

Answer 17

1. employees who work in an on-site rental office in a leasing capacity and who do not receive commission (there is no restriction on the duration of the rental for this exemption)
2. managers of condominium or cooperative apartments complexes who rent individual units for periods no longer than 1 year and who are not paid a commission
3. employees of owner developer (real estate developer) proved they do not receive a commission
4. governmental agency who perform real estate services for the state or local government and who do not receive a commission

Question 18

Chapter 475 of Florida Statutes exempts what individuals from holding a real estate license

Answer 18

1. Person who sells cemetery lots
2. Individuals who rent lots in a mobile park or recreational travel park
3. Attorney-at-law when acting within the scope of their professional duties in an attorney-client relationship
4. CPA when performing accounting duties w/in the scope of their professional duties
5. A person who has been given the power of attorney (attorney-in-fact) in order to sign contracts and conveyance on someone’s behalf
6. Owners of time share periods for their own use and occupancy who later offer the time-share periods for resale
7. State-certified and licensed real estate appraisers who are licensed under Chapter 475, Part II for the purpose of conducting appraisal services
8. Court Appointed individuals acting within the limitations of their duties
9. Federally regulated banks and dealers registered with the SEC selling business enterprises to accredited investors
10. Apartment property owners or property management firms for the purpose of paying a finder’s fee of no more than $50 to a tenant of the complex for a rental referral

Question 19

How are FREC commissioners compensated?

Answer 19

Commission members do not receive a salary. They are paid $50 per day for each day they attend an official meeting and for each day they participate in other Commission business. In addition, they receive reimbursement for expenses connected with their official activities. Any travel outside the state as members of the Commission requires the prior approval of the DBPR Secretary

Question 20

Fee waiver for military veterans

Answer 20

The initial application fee, biennial license fee, and unlicensed activity fee are waived for military veterans who apply a real estate license within 24 months after honorable discharge from the Armed Forces. The fee waiver applies to all licenses issued by the DBPR

Question 21

Group License

Answer 21

A group license is sometimes issued to sales associates or brokers assocaites who are registered under an owner-developer. An owner-developer may own properties in the name of various entities. If the entities are all connected so that ownership and control with the same individual(s), sale associates and brokers associates employed by owner-developer may be issued a group license

Question 22

Ineffective License

Answer 22

When a license is ineffective, the license exists but the licensee cannot use it.

Question 23

When does a license become ineffective?

Answer 23

1. Inactive. Real estate licensees may not perform real estate service with an inactive license
2. Suspended. If the result of a disciplinary proceeding is to suspend a license, the licensee is prevented from working for a period of time. The license is ineffective during the period of suspension

Question 24

When can a license become inactive?

Answer 24

1. A licensee who has met all of the requirements for licensure but chooses not to work in the real estate industry may request a change in license status to voluntary inactive
2. If a licensee fails to renew a license prior to the expiration date (other than the first renewal), the license is automatically placed in involuntary inactive status.
3. When a broker’s license is suspended or revoke, no disciplinary action is taken against the sales and broker associate register under that broker; however the license registered under the disciplined broker cannot continue working because their employer’s licenses is either void (revoked) or ineffective (suspended). Sales and broker’s associates license will go to involuntary inactive status until their find a new job or ask for a change of status to voluntary inactive status