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Real Estates > Unit 4 - Authorized Relationships, Duties & Disclosure > Flashcards

Unit 4 - Authorized Relationships, Duties & Disclosure Flashcards

1
Q

Brokerage Relationships Disclosure Act

A

Effective October 1, 1997

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2
Q

Disclosed dual agency

A

Expressly revoked

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3
Q

Authorized Forms of Broker Representation

A

Single agent OR transaction broker;

Lisencee may change form of representation

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4
Q

Authorized Brokerage Relationships

A

Single agent OR transaction broker OR no brokerage relationship;
Licensee may change form of relationship

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5
Q

Disclosure Requirements

A

Apply ONLY to residential sales;
Sale of improved residential property of 4 units or fewer, unimproved property Intended for use of 4 units or fewer, or agricultural property of 10 acres or fewer

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6
Q

Transaction Broker Relationship

A

Provides a limited form of representation to a buyer, seller , or both, but does NOT represent either in a fiduciary capacity or as a single agent (represents buyer and sellers as customers)

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7
Q

Customer

A

A member of the public who is or may be a buyer or seller of real property and may or may not be represented by a licensee in an authorized brokerage relationships

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8
Q

Limited Representation

A

Buyer or seller NOT responsible for acts of licensee;
Parties giving up rights to undivided loyalty of licensee;
Allows licensee to facilitate transaction by assisting both buyer and seller;
Licensee will NOT work to represent one party to the detriment of the other party when acting as a transaction broker to both parties to the transaction

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9
Q

Limited Confidentiality

A

Can not disclose that seller will take less than list price;
That buyer will pay more than written offer;
Motivation of either party or that sellers or buyer is agreeable to financing terms other than those in written offer

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10
Q

When Disclosure Given

A

Before, or at time of, listing agreement or agreement for representation or before the showing of property, whichever occurs first

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11
Q

Single agent relationship

A

Broker represents, as a fiduciary, either buyer or seller but not both in same transaction (represents buyers or sellers as principles)

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12
Q

Fiduciary

A

Relationship of trust and confidence given and received

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13
Q

Common law duties as fiduciary

A

(ADD COLD) - accounting; dealing honestly and fairly; disclose all known facts; confidentiality; obedience; loyalty; skill care and diligence

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14
Q

Disclosure requirement (single agent)

A

Duties must be described and disclosed in writing to buyer or seller either as separate document or included as part of another document

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15
Q

Duties of single agent

A

Accounting for all funds; Deal honestly and fairly; full disclosure; confidentiality; obedience; loyalty; disclose all known facts that materially affect the value of residential real property

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16
Q

Confidentiality

A

Obligated to safeguard principle’s confidentiality and secrets;
Violation is breach of trust and may be fraudulent

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17
Q

Obedience

A

Obey all lawful instructions of principle;

Do NOT obey ANY unlawful instruction

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18
Q

Loyalty

A

Act solely in best interest of principle to exclusion of all others

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19
Q

Full disclosure

A

Disclose ALL material facts, i.e any information which might reasonably influence decisions of principle; failure to disclose material fact is concealment, breach of trust and may result in a charge of fraud

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20
Q

Subagent

A

Agent employed to act for another agent;
Same duties and responsibilities to principle;
Sales associates relationship to a buyer or seller principle of broker

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21
Q

Designated sales associate

A

Applies to non- residential sale only;
Buyer and seller have assets of $1 million or more;
Broker designates sales associates to act as single agents for different customers in same transaction;
Must be requested by buyer and seller and they must sign disclosure form

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22
Q

No brokerage relationships

A

Licensee must give a No Brokerage Relationship disclosure before showing the property if no relationship is to exist between broker and customer

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23
Q

Notice of No Brokerage Relationship

A

Provide to any potential buyer or seller before showing the property if no relationship is to exist

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24
Q

NoBrokerage Relationship Duties

A

Dealing honestly and fairly; disclosing all known facts materially affecting property; accounting all funds

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25
Q

Transition to Transaction Broker

A

Permitted by law provided single agent gives transition disclosure notice and principle gives consent in writing

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26
Q

Types of Agents

A

Universal agent; General agent: Special agent

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27
Q

Universal agent

A

Authorized by the principle to perform all acts that the principle can personally perform and that may be lawfully delegated to another

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28
Q

General agent

A

Employed to handle all affairs in a business or trade, or to handle all business at a certain place

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29
Q

Special agent

A

Employed to handle a particular business affair or to do a special act

30
Q

Real estate broker

A

A special agent with limited power or authority

31
Q

Authority of special agent

A

Generally limited to finding prospects, showing the property and negotiating on behalf of principal

32
Q

Authority to execute instrument

A

Requires power of attorney instrument designating person as attorney-in-fact

33
Q

Unauthorized act of agent

A

Does not bind the principal

34
Q

Right to delegate performance

A

No right to delegate performance of act which requires exercise of discretion or judgement of broker

35
Q

Radon gas

A

Give prescribed disclosure on at least one document prior to or at time of contract or execution of rental agreement

36
Q

Homeowner Association Disclosure

A

Provided by sellers to buyers;
Describes Association, deed restrictions, assessments and mandatory HOA dues;
Given to buyer before signing contract;
Of not given buyer can void contract

37
Q

Lead base paint disclosure

A

For homes built prior to 1978;
Allows 10 day period for inspection (at buyer’s expense).
Violation= buyer can bring civil suit and receive triple damages

38
Q

Energy efficiency brochure

A

Required; Buyer may have energy audit done at their own expense.
May qualify for special financing

39
Q

Property tax disclosure

A

Buyer must not rely on current owner’s property taxes

40
Q

Building code violation disclosure

A

Must disclose violations and notify code enforcement after closing of new owners

41
Q

Advise Regarding Title

A

Advise purchaser to consult attorney or obtain title insurance;
Inform purchaser if have notice title is not merchantable or lien exists before any part of purchase price is paid;
Failure to advise is concealing and failure to perform duty imposed by law

42
Q

Brokerage Business Records

A

Disclosure notices retain for 5 years in all transactions that result in a written contract to purchase and sell real property

43
Q

Duties of Broker to Sales Associate

A

Train and supervise;
Make listings available;
Deal honestly and fairly

44
Q

Duties of Sales Associates

A

Faithfully perform fiduciary duties execute employment agreement;
Operate as sales associate;
Open for registered employer only;
Operate for one employer only;
Receive compensation from employer only (Not directly from seller or buyer);
Sue employer only (Not broker’s principal or employer);
Collect deposit in name of employer only;
Deliver deposits to employer by the end of next business day;
Take listings in name of brokerage firm;
Advertise listings in name of brokerage firm under direct supervision of active broker;
(Not take listings or divert clients or customers from former employer. Taking copies of listings is bad faith; taking originals is larceny.)

45
Q

Creation of listing agreement

A

May be implied, or expressed orally or in writing

46
Q

Written listing agreement

A

Must include definite expiration date, description of property;
Price and terms, fee or commission, proper signature of principle (deliver copy within 24 hrs)
No automatic renewal

47
Q

Terminating of listing

A

Death, insanity or bankruptcy of employer or broker;
Destruction of property;
Performance;
Abandonment;
Lapse of time (specified or reasonable time);
Breach by either party;
Revocation by employer

48
Q

Types of listings

A

Open
Exclusive
Exclusive right to sell

49
Q

Open listing

A

Owner lists property with one or more brokers ( does not give an exclusive);
Broker who is procuring cause of sale entitled to commission (other brokers receive nothing);
Owner may sell without being liable for a commission

50
Q

Exclusive listing

A

Owner gives one broker exclusive listing;
Owner may sell without being liable for a commission;
Also known as exclusive agency or agency listing.

A seller gives an exclusive listing to one broker who handles the transaction.
The seller reserves the right to sell the property without paying a commission, unless the buyer was introduced to the property by the broker or others acting under the broker.
If the broker or another person acting under the broker’s authority sell the property before the seller is able to do so, the broker is entitled to a commission.
Exclusively agency listings are bilateral contracts became both parties are obligated to perform.

51
Q

Net Listing

A

Owner requires net amount from sale; commission and other closing costs added to “net” to the seller.

52
Q

Option as Exclusive

A

Option may be exclusive listing where broker has no intention of buying and no substantial consideration is paid; broker only entitled to a commission ( to obtain true option broker must pay a substantial consideration and act as optionee).

53
Q

Revocation of employment Agreement

A

Employer always has power to revoke.

54
Q

Revokes After Performance

A

Broker entitled to full commission

55
Q

Revokes and No Sale Occurs

A

Employer liable for damages for time and expenses;

If exclusive right to sell is revoked and another person sells, first broker entitled to commission.

56
Q

Right to compensation

A

Broker must ne employed ( volunteers not entitled to compensation);
Broker must perform object of employment;
Broker must hold current, valid license and active license at time service was performed:
Broker must faithfully execute duties.

57
Q

Employment to “Find Purchaser”

A

Broker entitled to compensation when he finds a person who is ready, willing, and able to perform on the terms requested.

58
Q

Employment to “Effect a Sale”

A

Implies facilitating the signing of a Purchase and Sale agreement and the closing of the transaction assume this type of employment unless indicated otherwise.

59
Q

Broker entitled to compensation

A

When he performs object of employment; commission or compensation due and payable at time essential act or service is performed;
However, broker is usually not paid until transaction is finally closed (we get paid when the seller gets paid0.

60
Q

Broker May Be Entitled When

A

Employer unreasonably refuses to complete sale or purchase.

61
Q

Forfeited of compensation

A

Broker did not have active status when service was performed;
Broker violated his duties to his employer

62
Q

Representation of Material Fact

A

Principle and customer can rely upon all statement of material fact;
Misrepresentation grounds for civil action to recover damages and grounds for discipline y FREC

63
Q

Customer can rely upon

A

Statement made by mail or by phone;
statement made incorrectly through careless (culpable negligence);
statement made about hidden construction feature or concealed fact;
statement concerning past and present income and expenses;
statements made when acting as expert

64
Q

Fraud

A

INTENTIONAL false representation by words, conduct,, or concealment which deceives another person so he acts upon it to his injury

65
Q

Examples of fraudulent conduct

A

Breach of trusts in fiduciary relations;
misrepresentation of material fact;
false or reckless statement, intentional concealment, conflict of interest, false promise, secret profit, dishonest dealing by trick, scheme, or device, bad faith, intent or conspiracy to defraud

66
Q

culpable negligence

A

Inadequate attention to duties and obligations by the license who knows, or should have known, what was required of him or her; carelessness

67
Q

Concealing Condition of title

A

If licensee has notice, must disclose title is not merchantable or that a mortgage

68
Q

Mortgage release clause

A

No license may knowingly sell or offer for sale unless the particular property may be released from the (blanket) mortgage before foreclosure sale;
violation is fraudulent and dishonest dealing

69
Q

False promise to resell

A

No license may make false promise to resell or repurchase at any future time;
Not false promise if plan approved for use by another agency of state (Secretary of State) or promise has been strictly performed;
violation is fraudulent and dishonest dealing

70
Q

Kickbacks and rebates

A

Kickbacks and rebates violate 475.25 and unless license has fully advised principle, if any and all affected parties of all facts pertaining to the arrangement;
sharing of brokerage compensation with a party to the rea estate transaction with full disclosure to all interested parties is NOT violation of 475

71
Q

Professional ethics

A

Proven to be good for business.

REALTORS Code of Ethics details fair dealing with other licensees, customers and the pubic.

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