Study Guide Chapter 4 - 5 Flashcards
Definition of Residential Real Estate under Chapter 475 F.S.
A residential sale is defined as the sale of improved residential property of 4 or fewer units, the sale of unimproved residential property intended for use as 4 or fewer units, or sale of agricultural property of 10 or fewer units
Chapter 475 mandates certain duties and obligations in each type of brokerage relationship. When is written disclosure required?
Written disclosures are required only when dealing in residential real estate transaction.
Chapter 475 mandates certain duties and obligations in each type of brokerage relationship. When the disclosure requirements does not apply ?
- nonresidential transactions
- the rental or leasing of real property, unless an option to purchase all or a portion of the property improved with 4 or fewer residential units is given;
- auctions;
- appraisals; and
- dispositions of any interest in business enterprises or business opportunities, except for property with 4 or fewer residential units
Residential Transactions/ Transaction broker relationship disclosure
Licensees are no longer required to give customers a written disclosure when a transaction broker relationship is chosen
7 duties of transaction broker
DA UD PEP
- Deal honestly and fairly
- Account for all funds
- Use skill, care, and diligence in the transaction
- Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer
- Present all offers and counteroffers in a timely manner
- Exercise limited confidentiality, unless waived in writing by a party
- Perform any additional duties that are mutually agreed to with a party
9 duties of a single agent
- Deal honestly and fairly
- Loyalty
- Confidentiality
- Obedience
- Full disclosure
- Account for all funds
- Skill, care, and diligence in the transaction
- Present all offers and counteroffers in a timely manner
- Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer
** Remember COLD **
COLD - single agent
Confidentiality, Obedience, Loyalty, Disclosure (Full)
3 duties of No brokerage relationship
DDA
- Deal Honestly and fairly
- Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer
- Account for all funds entrusted to the licensee
Duty of Limited Confidentiality
This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listing price; that the buyer will pay a price greater than the price submitted in a written offer; of the motivation of any party for selling or buying property; that a seller or buyer will agree to financing terms other than those offered; or of any other information requested by a party to remain confidential
Duty to Disclose all known material facts
Licensees have a duty to disclose to buyer all known facts that materially affect the value of residential property. For example, a licensee is obligated to inform the buyer if there are cracks in the tile floor under the wall-to-wall carpeting caused from the foundation settling.
HIV resident occupant, Homicide, Suicide, Death are not material fact to be disclose, it is not a material fact in a real estate transaction
What must a broker do who wants to re-open a branch office?
A broker may reopen a branch office in the same location during the same license period by requesting a reissue of the branch office license without paying an additional fee.
Office signs - where should it be displayed?
Active real estate broker must display an office sign on either the exterior or interior of the entrance to their principal office and all branch offices. The sign (s) must be easily observed and read by anyone entering the office.
Office sings - what information the sign must contain?
- Trade name (if one is used)
- Broker’s Name
- The words, “Licensed Real Estate Broker” or “Lic. Real Estate Broker”
Office signs - Sales Associate & Brokers Associate name placing
The names of the sales associate and broker associates are not required on the entrance sign. However, if the associates’ names appear on the sign, the names must be below the name of the broker(s) and the appropriate title, sales associate or broker associate, must appear NEXT to each associate’s name.
A line or observable space must separate the name of the real estate broker from the names of the sales associates or broker associates
Office signs - Brokerage entity
- Name of the firm or corporation (or trade name, if one is used)
- Name of at least one active broker
- The words, “Licensed Real Estate Broker” or “Lic. Real Estate Broker”
Who is a licensee allowed to call under the federal do-not-call rules?
- A sales associate representing a potential buyer may call the FSBO seller, but only if they have an actual buyer interested in the property and to negotiate a sale.
- A sales associates may contact individuals with whom the associate has had an established business relationship, even if those customers’ number are on the national registry. For example, the company that previously listed a property may contract a former customer to solicit new business for up to 18 MONTHS after the business transaction has been concluded.
- Sales associates may contract a customer for 3 MONTHS AFTER a business inquiry or application (such as a customer who registered at an open house or a FSBO seller who requested information from a sales associate)
When must a sales associate deliver an earnest money deposit to the broker and when must a broker deposit the money?
Brokers must place trust funds into a escrow account immediately, which means no later than the end of the 3rd business day after their sales associate (or an employee of their brokerage company) has received it.
The 3 business day time period coincides with the day that the sales associate must turn over the deposit to the broker
The sales associate has until the end of the next business day to deliver the deposit to the broker.
The broker has until the end of the third business day to deposit the funds. The three business day time period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker.
The broker can also receive the deposit directly without the involvement of a sales associate. The same rule applies in this case: The broker has until the end of the third business day to make the deposit.
Know the procedure that must be followed when placing earnest money with a title company or attorney
No later than 10 business days after each deposit is due under the terms of the sale contract, the licensee’s broker must request a written verification of receipt of the deposit. The broker’s request to the title company (or to the attorney) must be in writing. If the deposit is held by a title company or by an attorney nominated in writing by the seller or the seller’s agent, the verification is waived
Conflicting demand
Conflicting demand occur when the buyer and seller make demands regarding the disbursing of escrowed property that are inconsistent and cannot be resolved.
Steps that must be taken when a broker is holding and earnest money deposit in hist trust account receives conflicting demands
If a broker who maintains an escrow account receives conflicting demands on escrowed property, the broker must notify the FREC, in WRITING, within 15 BUSINESS DAYS of receiving the conflicting demands unless specifically exempted.
Further, the broker must institute one of the 4 settlement (or escape) procedures within 30 BUSINESS DAYS from the time the broker received the conflicting demands.
4 settlement procedures on an escrow conflicting demand
Meditation
Arbitration (binding)
Litigation
Escrow Disbursement Order (EDO)
MALE
Arbitration
Arbitration is a process whereby, with the prior written consent of all parties to the dispute, the matter is submitted to a disinterested 3rd party. Each side presents its case to a third party, who makes a binding judgment in factor of one side or the other. The parties must agree in advance to abide by the arbitrator’s final decision.
When does a written disclosure of duties and obligation requirement does not apply?
- Nonresidential transaction
- the rental or leasing of property unless an option purchase all or a portion of the property improved with 4 or fewer residential unit is given
- auction
- appraisals
- dispositions of any interest in business enterprises or business opportunities, except for property with four or fewer residential units.
