Unit 4: Authorized Relationships, Duties & Disclosure

Question 1

Caveat Emptor

Answer 1

People dealing at ‘arms-length” conduct negations on their own behalf without trusting the other’s fairness or integrity and without being subject to the other’s control or influence. In such cases, the legal doctrine of “caveat emptor (let the buyer beware)” applies.

Question 2

What two types of agency are formed in general business dealings?

Answer 2

The two types of agency formed in general business are;

1. General
2. Special

Question 3

A general agent is:

Answer 3

Authorized by a principle to perform acts associated with the continued operation of a particular job or certain business.

Question 4

A sales associate is a ___________ agent to a __________ broker.

Answer 4

A sales associate is a general agent to a principal broker.

Question 5

A special agent is:

Answer 5

A special agent is authorized by a broker or owner-developer to handle a specific business transaction or can perform a specific act.
For example; a broker ent

Question 6

There are 3 duties required in all Brokerage Relationships.

Answer 6

The three duties required in all Brokerage relationships are;

1) A. - Account for all funds
2) D - Deal honestly and fairly
3) D - Disclose all known facts that affect the value of the residential property.

Question 7

If there is no brokerage relationship does “ ADD “ apply?

Answer 7

Yes

Question 8

Transaction Brokerage duties include

Answer 8

Transaction Brokerage duties include “ADD” and

4) use skill, care & diligence.
5) present all offers & counteroffers
6) limited confidentiality
7) perform duties that are mutually agreed to

Question 9

Single Agency offers the highest degree of representation which includes; “ADD”, numbers 4 and 5 in addition to;

Answer 9

8) Confidentiality
9) Obedience
10) Loyalty
11) Disclosure (Full)

Question 10

The unique duties of a Single Agent = “COLD”

Answer 10

“COLD”

8) C- Confidentiality
9) O- Obedience
10) L- Loyalty
11) D- Disclosure (Full)

Question 11

Transaction Broker is a limited representative agency and has the least liability. How is liability affected from a customer standpoint?

Answer 11

The customer in a transaction broker relationship is not responsible for the acts of a licensee, as a principal might be in a single agent relationship.

Question 12

Residential sales transactions are defined as;

Answer 12

a) Improved residential property of 4 or fewer units.
b) Unimproved residential property zoned for 4 or fewer units
c) Agricultural property of 10 or fewer acres.

Question 13

Written disclosures are required only for residential sale transactions when the brokerage firm acts in the capacity of a __________ agent or in a ___ brokerage relationship.

Answer 13

Single Agent & No Brokerage Relationship require written disclosure for residential sales transactions.

Question 14

Transaction Brokerage Relationship is ____________ in the state of Florida, therefore there is _____ written disclosure requirement

Answer 14

The relationship is presumed in the state of Florida, therefore there is no written disclosure requirement.

Question 15

The timeframe to retain brokerage relationship disclosures is;

Answer 15

5 years