Unit 5

Question 1

An organization of brokers who have agreed to cooperate with member brokers in marketing listings. Members also agree to enter all exclusive listings into the listing distribution network so that every member is promptly informed of new listings as they come on the market.

Answer 1

Multiple Listing Service

Question 2

All brokers in the state of Florida must have a real estate office and must register that office with the DBPR. This is called the

Answer 2

Primary office

Question 3

A _________ may not have an independent office of his own.

Answer 3

sales associate or broker associate

Question 4

The broker’s office must:

Answer 4

Be within structure of at least one room of stationary construction. The office may be in a residential area if not contrary to local zoning ordinances. The office should be of a private nature so negotiations of the buyer or seller may be held with privacy and confidence. The office must have an entrance sign located on the door of, or adjacent to the front entry

Question 5

Temporary shelters in a subdivision (such as a construction trailer) may be used as a temporary office so long as:

Answer 5

transactions are not closed and salespeople are not permanently assigned there.

Question 6

Whenever a broker wishes to conduct business in more than one location, each office must:

Answer 6

register with DBPR and appropriate fee/s paid.

Question 7

All advertising (i.e. phone numbers, letterhead, etc.) of the broker must be displayed to:

Answer 7

Indicate to the public that such an office is operated at that location by the broker.

Question 8

If a broker closes a branch office and opens a different branch, the registration of the first branch may:

Answer 8

not be transferred.

Question 9

If a broker closes a branch office and opens a different branch, the new location must be:

Answer 9

registered and the fee paid for that location.

Question 10

If a broker wishes to re-open a branch office at its previous location before the license expires, he may:

Answer 10

do so without an additional fee.

Question 11

.Can a Sales Associate conduct business from home?

Answer 11

No. A sales associate may not conduct business from a personal residence.

Question 12

Sales associates must be affiliated or registered from and work out of an office maintained in the name of:

Answer 12

the broker or employer.

Question 13

If the office is located within a residence, the broker must:

Answer 13

Comply with the sign requirements of 475.22 F.S.

Question 14

If the home office is used in connection with a trade or business and there is no other business location, what deductions may be allowed?

Answer 14

A pro rata share of expenses may be deducted on the federal tax return if the home is used exclusively and regularly.
Ex.: Maintenance, utilities, insurance and depreciation.

Question 15

If the home office is used in connection with a trade or business and there is no other business location, Correspondence and business documents must be kept at:

Answer 15

the location, in the area used for business.

Question 16

Every broker’s office entry sign must contain:

Answer 16

The NAME of the BROKER who is registered as the broker of record for that office. If the office has a trade name, the Trade name must be located on the sign, followed by the broker of record’s name. A partnership or corporation shall contain the name of the firm or corporation or trade name along with at least one of the brokers. At a minimum the words “Licensed Real Estate Broker” (or “Lic. Real Estate Broker”) must appear immediately below the broker/s name/s

Question 17

The name of sales associate/s or broker associates may appear on the office entry sign if they are located:

Answer 17

under the required lines and clearly separated from the broker’s identification, and that they show the type of license for each person listed.

Question 18

No real estate advertisement by a licensee shall show only a post office box number or telephone number or other vague information so that the public does not know that it is a licensee. Such an ad is called a ______ and is illegal under Florida Law.

Answer 18

Blind Ad

Question 19

All advertising must contain _______________ which is registered with the Department.

Answer 19

the name of the brokerage firm. Brokers must always advertise in a manner that alerts the public that they are dealing with a real estate professional.

Question 20

Advertising includes:

Answer 20

ads for purchasing; renting, or leasing real property as well as any advertising given to the public such as pens, note pads, etc.

Question 21

What happens if a phone number included in the ad is NOT the number to the brokerage firm?

Answer 21

It must be identified as such. “cell phone, home phone.”

Question 22

When advertising on the Internet, the brokerage firm name shall be placed:

Answer 22

adjacent to or immediately above the POINT of CONTACT information.

Question 23

Refers to any means by which to contact the brokerage firm or individual licensee including mailing address, physical street address, e-mail address, telephone number or FAX number.

Answer 23

Point of Contact

Question 24

For Sale or Lease Signs, when used, must also have the:

Answer 24

brokerage identified

Question 25

Sales associates may place “pending” and “Sold” signs upon these signs with the permission of:

Answer 25

the owner

Question 26

When a property sells or the listing expires, the advertising sign must:

Answer 26

be removed

Question 27

Punishment for misleading or false information placed by a broker is:

Answer 27

punishable by an administrative fine of up to $5,000 per count to a one year suspension

Question 28

Any person who advertises real estate services for another is interpreted as acting as a broker. Sales associates CANNOT:

Answer 28

advertise or conduct business in their name only.

Question 29

_____ Ads are illegal

Answer 29

Blind

Question 30

An advertisement that does not make it clear that a broker or real estate company is advertising the property for sale, rent or lease. Illegal in FL.

Answer 30

Blind Ad

Question 31

An amount of money or property granted to somebody but held by a third party and only released after a specific condition has been met.

Answer 31

Escrow

Question 32

If the item collected is not money, the ______ must agree in writing that the item in question is acceptable.

Answer 32

seller

Question 33

Mixing personal and public money is called and is illegal under Florida law.

Answer 33

commingling

Question 34

When is there an exception to commingling?

Answer 34

$1000 that a broker may deposit in the escrow (or trust) account to keep the account open.

Question 35

What are the responsibilities of the broker when holding the money of others?

Answer 35

Keeping careful records of all items received and to deliver the funds when dispersal is required. Depositing money received in his care in the proper escrow account immediately.

Question 36

Taking money that should be held in escrow for the parties and using the money for the broker’s own needs (such as operating money). This is an illegal act.

Answer 36

Conversion

Question 37

What should a sales associate do with money obtained to be deposited in the escrow account?

Answer 37

Give it to the broker immediately. No later than the end of the next business day.

Question 38

When a broker receives money to be deposited in an escrow account, when must he make that deposit?

Answer 38

Deposit it immediately within three business days. (Holidays and weekends are excluded)

Question 39

A separate account in a bank or trust company, title company having trust powers, credit union or a savings and loan association within the State of Florida. This must be an account separate from the broker’s own operating funds.

Answer 39

Escrow or trust account

Question 40

What are the broker signatory requirements concerning escrow accounts?

Answer 40

The broker must be a signatory on all escrow accounts. If there is more than one broker, then a broker licensee must be designated as the signatory.

Question 41

What are the broker requirements concerning deposits into escrow accounts?

Answer 41

If the deposit is in securities, intended by the depositor to be converted into cash, the conversion shall be made at the earliest practical time, and the proceeds shall be immediately deposited in the account.

Within 10 BUSINESS DAYS of the date of receipt, the broker shall make a written request to the title company or attorney to provide a written verification of receipt of the deposit.

Within 10 days of verification of deposit, the broker shall provide the seller (if unrepresented) or seller’s broker a copy of written verification.

Question 42

Is a broker required to have an escrow account?

Answer 42

A broker is NOT required to have an escrow account.

Question 43

When earnest money or deposit funds are entrusted to a title company or attorney, the licensee who prepares the contract, must indicate on that purchase agreement:

Answer 43

The contact information for the depository where the funds will be held.
Escrow Agent Name
Address
Phone, email, and FAX

Question 44

How many escrow accounts can a broker maintain?

Answer 44

A broker may maintain more than one escrow account.

Question 45

What are the rules for a broker who puts his own money in an escrow account?

Answer 45

The broker can maintain up to $1000 of his own money in each sales escrow account or up to $5,000 in a property management account.

Question 46

What are the broker signatory requirements concerning escrow accounts?

Answer 46

The broker must reconcile the accounts no more than 30 days from the date of the last reconciliation was performed or should have been performed. This requirement cannot be delegated to any other person.

Question 47

What are the requirements if the broker chooses to place the escrow money in an interest-bearing escrow account?

Answer 47

The broker may establish an individual interest-bearing escrow account for a specific transaction or sum of money. He may do so only if the following is stated in writing with all parties to the transaction:
the name of the party who is to receive the interest, and
the date the earned interest must be disbursed.
The broker must have the written permission of all parties to the transaction. The escrow account shall be in an insured account in a depository located and doing business in Florida.

Question 48

What are the requirements for the broker to close the interest-bearing escrow account and disburse principal and interest?

Answer 48

On the date agreed on, the broker must close the account with checks issued to the appropriate person or business entity for the principal and interest. To disburse the principal and interest to the designated party, the broker must transfer the principal and interest to a non-interest bearing escrow account before disbursement. If the broker is to receive the interest, the principal is transferred to the non-interest bearing account and the interest is transferred to the broker’s operating fund account.

Question 49

What are the record keeping requirements of broker escrow accounts?

Answer 49

The broker must keep careful, exact records of the money in trust accounts. The broker must keep copies of all records pertaining to the escrow account including but not limited to deposit slips, books, and statements of accounts. These records must be available to the DBPR or its authorized representatives during regular business hours.
Once a month, the broker shall have a written statement made comparing the broker’s total liability with the reconciled bank balances of all trust accounts. This includes the sum total of all deposits received, pending and being held by the broker at any point in time.

Question 50

What is the consequence of brokers who fail to properly maintain or reconcile their escrow accounts?

Answer 50

Brokers who fail to reconcile their escrow accounts monthly (or more frequently) are subject to a citation. Failure to properly maintain escrow accounts is the one of the most common problems found during a DBPR Audit.

Question 51

What is the minimum information to be included in the broker’s monthly report for his escrow account?

Answer 51

The minimum information to be included in the monthly report is
the date used to reconcile the balances,
the name of the bank(s),
the name(s) of the account(s),
the account number(s),
the account balance(s),
deposits in transit,
outstanding checks identified by date and check number,
an itemized list of the broker’s trust liability,
other items necessary to reconcile the bank account with the balance per the broker’s checkbook(s) and other trust account books and records disclosing the date of receipt and source of funds.
The broker must review, sign and date the monthly statement-reconciliation.

Question 52

What should a broker do if the escrow account’s monthly report does not balance?

Answer 52

If the accounts do not balance with the broker’s books, a description or explanation of the difference as well as the corrective action must be included in the report.

Question 53

How long is the escrow held in an account?

Answer 53

The escrow is held into an account until it needs to be turned over to the closing source.

Question 54

What happens to the escrow if a contract does not close?

Answer 54

If a contract does not close, or a portion of the escrow claimed by the brokerage, the broker’s portion will be apportioned into the broker’s operating account for disbursement as required.

Question 55

What should the broker do if there is a dispute over the return or disbursement of earnest money?

Answer 55

It is the responsibility of the broker to then notify the FREC within 15 business days from the last party’s demand. There are three exceptions to this rule:
if it is a property utilizing HUD;
if the buyer of a condominium unit delivers written notice to cancel as provided under the Condominium Act 718 F.S.;
if the buyer is unable to satisfy a financing contingency within the time frame as provided by the contract

In these cases the broker may disburse the funds according to the guidelines of each situation. Otherwise, if the broker has a good-faith doubt (meaning the broker honestly doubts the claim of a party), the broker reports the situation to the FREC. The broker has 30 days from the last party’s demand to implement one of the procedures set up for escrow disputes.

Question 56

What are the four Settlement of Escrow Dispute Procedures that a broker may wish to request?

Answer 56

Escrow Disbursement Order (EDO),
Mediation,
Arbitration,
Litigation.

Question 57

Once an EDO is requested, the broker must follow the instructions of the:

Answer 57

FREC

Question 58

What if an EDO is overturned on appeal?

Answer 58

If the EDO is overturned on appeal, the broker may be liable for civil damages in a civil suit.

Question 59

If the broker has followed the EDO, damages to the broker can be:

Answer 59

Reimbursed from the Real Estate Recovery Fund without jeopardy to the broker’s license, and the broker is not required to repay the Fund.

Question 60

What situation in a dispute over the return or disbursement of earnest money is considered good faith doubt?

Answer 60

A situation that is considered good faith doubt is when one party to the dispute does not respond to the broker’s correspondence about the escrow money when a transaction fails to close on time or if the buyer (or his spouse) refuses to close at all.

Question 61

Who must the broker notify once the dispute over the return or disbursement of earnest money is settled and within what time frame?

Answer 61

Once the dispute is settled, the broker must notify the FREC within 10 days that the dispute is over.

Question 62

The FREC may refuse to issue a Disbursement Order, in which case what other procedures must be used?

Answer 62

The FREC may refuse to issue a Disbursement Order, in which case the other procedures must be used.
Mediation: Both parties agree in writing to mediation by a mediator. If the issue is not solved within 90 days, the licensee must use the other types of dispute procedures.
Arbitration: If the buyer and seller cannot agree, the issue is submitted to arbitration and a third party (arbitrator) makes a decision for one party or the other. If this fails, the parties go to Litigation.
Litigation: is simply a law suit, asking the courts through a process called Interpleader to determine the rightful owner of the disputed escrow. The court issues a declaratory judgment which is a binding determination of the rights and status of the parties.

Question 63

In a dispute over the return or disbursement of earnest money, both parties agree in writing to MEDIATION by a mediator. If the buyer and seller cannot agree and the issue is not solved within 90 days, the licensee must use this other types of dispute procedure:

Answer 63

arbitration

Question 64

If the FREC refuses to issue a Disbursement Order, the next procedure to be used is:

Answer 64

mediation

Question 65

In a dispute over the return or disbursement of earnest money, if the buyer and seller cannot agree, the issue is submitted to arbitration and a third party (arbitrator) makes a decision for one party or the other. If this fails, the parties go to:

Answer 65

litigation

Question 66

A law suit, asking the courts through a process called Interpleader to determine the rightful owner of the disputed escrow. The court issues a declaratory judgment which is a binding determination of the rights and status of the parties.

Answer 66

Litigation

Question 67

When a broker provides a list of rental property for a fee and acts as an information broker to a tenant, the FREC requires that the broker give the tenant a contract that specifies that the tenant has the right to:

Answer 67

Request a refund of 75% of the fee (if requested within 30 days) if the tenant does not find a rental; and
Request a refund of 100% of the full fee (if requested within 30 days) if the information is inaccurate.

Question 68

The penalty for advertising obsolete or otherwise inaccurate rental lists is:

Answer 68

A fine up to $1,000 and/or up to one year in prison. This is a first degree misdemeanor.

Question 69

Trying to sell a property often requires a creative touch. However, sales associates and brokers could go too far when describing a property. If the write up on the property provides information that is a subjective opinion that is called:

Answer 69

Puffing

Question 70

Provide example statements of puffing.

Answer 70

“The transportation, shopping and schools in this area are terrific.” or “Isn’t this the most beautiful yard you have ever seen.”

Question 71

In some cases, salespersons and brokers may exaggerate the benefits or representation of a property’s value and added features. This is a misrepresentation of the property and could result in a loss of perceived value on the part of the buyer. If the broker or salesperson causes a material loss to a party as a result of misrepresentation, a resulting charge of _______ could follow. The owner must take great care to avoid this.

Answer 71

FRAUD

Question 72

This is deception intended to cause unsuspecting person harm. Is not always done with the intent to take advantage of another person to the benefit of the original person. Can also be an intentional or unintentional misstatement of fact or an omission of fact, where person makes a decision based on bad information.

Answer 72

Fraud

Question 73

An example of misrepresentation of value by a broker could include:

Answer 73

Lack of information on material facts such as a leaky roof or electrical problem that the broker knew or should have known by asking the seller. Such misinformation could be considered fraud, breach of contract or a breach of trust, depending on the situation.

Question 74

The broker or sales associate is considered an expert in many aspects of property transfer. There are areas however, when the line of the law could be crossed and unintentional trouble may follow, which is:

Answer 74

A broker may never give advice about contract law or explain the meaning of contract areas to anyone; nor should the broker discourage the use of an attorney in assisting the buyer or selling in the process of the sale.

Question 75

Compensation paid to a real estate broker for real estate service

Answer 75

Commission

Question 76

How can commission be paid?

Answer 76

It can be paid as a:
Percentage of sale price;
Flat Fee or Salary;
Or a combination of both, as set forth in the listing agreement, management agreement or agreement.

Question 77

Who can contract with Principals or customers?

Answer 77

Only brokers can contract with Principals or customers. A sales associate works under the direction and guidance of a broker and cannot contract directly with the Principal or customer.

Question 78

The fact that one party such as the seller or another party such as the buyer pays a commission does NOT create an agency relationship. An agency relationship is created by:

Answer 78

Disclosure and written agreement between the parties.

Question 79

Established by some type of written agreement (listing agreement, property management agreement or agreement) the commission between the parties is always ___________.

Answer 79

negotiable.

Question 80

In order to collect a commission, a broker must:

Answer 80

Be a licensed real estate broker or sales associate working under the supervision of an employing broker.

Must have been employed by the principal under a valid contract such as a listing agreement, agreement etc.

Must have been the procuring cause of the sale.

Must have a ready, willing and able buyer, seller or tenant, depending who the contract calls for.

Question 81

What are the rules as to how a sales associate collects pay from commission?

Answer 81

All business including the receiving of commission is through the broker, the employing broker of the sales associate only. The sales associate may never accept direct payment from a Principal or customer; the sales associate receives payment only from the employing broker. Any compensation or gifts to a sales associate must also be provided through the broker if it is the result of a real estate transaction.

Question 82

A series of events leading to the sale/purchase or renting of real property.

Answer 82

Procuring cause

Question 83

The sales associate conducts all business in the name of his _________.

Answer 83

broker

Question 84

What are the rules as to how a broker pays a sales associate a split of the commission?

Answer 84

A broker can only pay a sales associate licensed and registered under him. A sales associate can never collect a payment from other than the employing broker.

Question 85

Is determined in advance between the broker and his sales associates and broker associates. Details of commission splits should be part of the employment agreement between the broker and the sales or broker associate, and should be understood by all parties.

Answer 85

. Commission Split

Question 86

The broker’s __________ may discuss how commissions are calculated.

Answer 86

Policy Manual

Question 87

Why can’t a sales associate sue a principal or customer for a commission?

Answer 87

Since the sales associate is an employee of the broker, he or she cannot sue a principal or customer for a commission.

Question 88

Collusion between brokers and sales associate with competing companies in setting commission rates that is illegal.

Answer 88

Price fixing

Question 89

The Sherman Anti-Trust Act directly affects real estate brokers. All business must be allowed to flow freely in an open market. The act specifically forbids:

Answer 89

Price fixing as brokers cannot get together and set rates; making a statement that a broker charges more commission than another or that a broker offers a discount commission. Group boycotts. Division of markets by location or price.

Question 90

How do brokers charge a commission?

Answer 90

Brokers charge the commission that they need to meet their own business plan. There is NO standard commission in real estate.

Question 91

Should licensees hold Group Boycotts where the licensees of different companies did not agree could boycott a company because of the company’s business practices? For example, a group of brokers boycott a discount broker because the discount broker has lower rates.

Answer 91

No, it is illegal.

Question 92

What does Division of Markets mean and is this legal?

Answer 92

Dividing up the town either geographically or by price range is a violation of law. Giving ABC all of the north side while XYZ takes the south side is a violation of law as is ABC taking all the listings of below $200,000 and XYZ all the listings above.

Question 93

Violations of the Sherman Anti-Trust Act can include:

Answer 93

Prison terms and fines of $50,000 per violation.

Question 94

An example of price fixing would be a statement stating:

Answer 94

“Everyone charges the same so you might as well list with me” would be considered an illegal statement and a violation of the Act, since brokers cannot get together and set rates.

Question 95

Kickbacks are legal only under limited conditions:

Answer 95

All parties to the transaction must be fully informed of the kickback.
The kickback must not be prohibited by other law (such as the Real Estate Settlement Procedures Act).
The commission may be shared with an unlicensed seller or buyer of the property sold with lender approval.

Question 96

Kickbacks are difficult to manage and document. Brokers can, under some circumstances, receive kickbacks from providers outside the transaction as long as the buyer and seller are informed of the kickback. What would be an example of a legal kickback?

Answer 96

A referral fee from a carpet company would be an example of a legal kickback.

Question 97

Would it be legal for a broker to seek a kickback from a title company, or mortgage provider for referring and closing a property with their particular company?

Answer 97

It is illegal as it is a violation of the federal Real Estate Settlement Procedures Act (RESPA).

Question 98

Any time a sales associate changes employers (brokers) he must:

Answer 98

Notify the FREC within 10 days on the current form prescribed by the DBPR.

Question 99

All forms required for real estate changes for individuals and schools are available at:

Answer 99

http://myfloridalicense.com/ under the real estate section.

Question 100

Does the sales associate’s obligation to confidentiality to the Principal change when changing employers?

Answer 100

By changing employers, the sales associate does not give up his obligation of confidentiality to a Principal. The sales associate is an agent of the broker who is his or her principal. All information that is confidential to the Principal shall remain confidential, regardless of where a broker or sales associate is employed.

Question 101

Why would a broker-sales associate relationship not end with termination (firing) of employment?

Answer 101

A broker-sales associate relationship does not end with termination (firing) of employment. Copying records from the previous broker to take new listings to the new broker would be considered a breach of trust and removal of records from a previous employer’s office constitutes theft, because all business was done in the initial broker’s name.

Question 102

What must a broker or real estate school do when changing business address?

Answer 102

When a broker or real estate school changes business address, they must file a notice of change and the names of the licensees no longer associated with the firm. This action fulfills the change of address notification requirement of licensees who remain with that firm.

Question 103

What happens to the licensees whose names are included in a broker’s list on non-associates if they are not already inactive?

Answer 103

Licensees whose names are included in the list of non-associates if not already inactive will become involuntary inactive.

Question 104

How long does a broker or real estate school have to notify the FREC of a change of address?

Answer 104

The broker or school will have ten business days to notify the FREC

Question 105

What happens if a broker or real estate school fails to notify the FREC of a change of address?

Answer 105

Failure to notify will cause the license of the broker or school to be ineffective and the licenses of all who work under that license to be ineffective. A fine will also be charged to the broker for failure to report.

Question 106

When a sales associate changes his or her address, he or she has ____ business days to notify the FREC.

Answer 106

10

Question 107

What could happen if a sales associate does not notify the FREC of his or her change of address?

Answer 107

Failure to notify the FREC may result in a fine to that sales associate.

Question 108

Sales associates and brokers are also required to keep their _________ current with the DBPR as some requests and communications are now being electronically transmitted.

Answer 108

email addresses

Question 109

Unauthorized display of names or insignia of real estate organizations or associations is prohibited by FREC rules. Provide an example.

Answer 109

do not use the REALTOR® trademark or any other group insignia or designation unless you are a current member or are qualified in that skill or business.

Question 110

A broker may wish to do business as a business entity instead of using his own name. The broker should consult with his own attorney or accountant to find the specific entity that meets his specific needs. These companies will need to be registered with the DBPR. These specific types of business units can be registered::

Answer 110

Sole proprietorship; General Partnership; Limited Partnerships; Corporation; Limited Liability Partnership (LLP); and Limited Liability Corporation (LLC);

Question 111

A business owned by one person. It may have a trade name rather than the name of the owner. The advantages are that it is easy to manage - and decisions are made by the owner. The disadvantage is that when the owner dies, the company ceases to exist. Liability is completely held by the one owner. All actions of associates to this broker are his responsibility and his alone. Does not need to register with the Secretary of State unless a trade name is used.

Answer 111

Sole Proprietorship

Question 112

A business owned by more than one broker. Each partner in a general partnership is liable for any debt; each partner helps to make the decisions and receives a share of the profits. At least one of the brokers must be specified as the active broker. All partners dealing with the public must be an active broker. A sales associate or a broker associate cannot be partners in a general partnership. Any change in the makeup of the partnership must be reported to the FREC. The partnership is registered with the FREC but does not have to be filed with the Secretary of State.

Answer 112

General Partnership

Question 113

What would happen if the primary broker dies in a general partnership?

Answer 113

If the primary broker dies, that broker must be replaced by another active broker within 14 days. If this does not occur, the partnership registration is cancelled and all the licensees associated with the partnership become involuntarily inactive.

Question 114

How is a general partnership dissolved?

Answer 114

A general partnership is dissolved by:
agreement of the partners
death of one of the partners
court action
bankruptcy of one of the partners
bankruptcy of the partnership

Question 115

A business owned by at least one general partner and at least one limited partner. All the management is done by the general partner. Partners contribute investment cash but are limited in the amount of liability to the amount of money they have already given. Sometimes called silent partners, do not have a voice in the managing of the company. Registered with the FREC, and at least one of the general partners must be an active broker. The partnership is created by filing with the Secretary of State. The partnership must be also be registered with the FREC.

Answer 115

Limited Partnerships

Question 116

Describe the roles of the general partner, limited partner, and sales associate.

Answer 116

General partners who work with the public must be active brokers and licensed with the FREC. All other general partners must also be registered with the DRE. Limited partners do not have to be licensed or registered. Sales associates and broker associates cannot be general partners but they may be limited partners.

Question 117

What happens if the primary broker dies in a limited partnership?

Answer 117

If the primary broker dies, that broker must be replaced by another active broker within 14 days. If this does not occur, the partnership registration is cancelled and all the licensees associated with the partnership become involuntarily inactive.

Question 118

A company that is an entity, rather than a single person. It may have a trade name associated with it. Is formed by filing Articles of Incorporation with the Secretary of State which specify its duties and powers. Must be registered with the FREC. Stockholders own the business but it is managed by a board of directors, acting through its officers. It may be either for profit or nonprofit.

Answer 118

Corporation

Question 119

What are the roles of the directors and officers, brokers, and sales associates in a corporation?

Answer 119

All directors and officers must be active brokers, inactive brokers or unlicensed persons, but at least one officer must be an active broker licensed by the FREC. Sales associates and broker associates cannot be officers or directors. Only active brokers can conduct meetings, direct the sales staff, or can communicate in any way with the public.

Question 120

What must appear in all ads for in a for-profit company?

Answer 120

The word company must appear in all ads in a for-profit company.

Question 121

Meaning organized under another state besides Florida .

Answer 121

Foreign corporation

Question 122

Also called a “professional company” and its purpose is to provide professional real estate services without the liability of an unprotected broker’s or sales associate license. Liability of an LLC is limited to a single person’s professional action.

Answer 122

Limited Liability Company (LLC)

Question 123

Corporations may cease to exist when:

Answer 123

The stockholders act to dissolve the company;
A court order dissolved the company;
The life span has expired, as provided in the charter;
The corporation fails to file an annual report with the State of Florida;
The annual fee required by the state of Florida is not paid.

Question 124

What happens if the firm only has one active broker, and that broker dies? What happens if this is not met? How is the corporation unaffected?

Answer 124

If the firm only has one active broker, and that broker dies, the company has 14 calendar days to notify the FREC. If this is not met, the corporation’s registration will be cancelled and the licenses of all its associates become involuntarily inactive. If there is more than one active broker, the associates are not affected by the change of leadership.

Question 125

A form of ownership that provides liability protection similar to protection offered to limited partners in a limited partnership. Basically the partner is liable only for the acts the he, himself has done, rather than the partnership, The Limited Liability Partnership must file with the Secretary of State and must always use the letters LLP in it’s name.

Answer 125

Limited Liability Partnership:( LLP)

Question 126

A corporation may either be a Florida or corporation or a _____________.

Answer 126

A corporation may either be a Florida corporation or a foreign corporation, Either foreign or domestic corporations must be registered with the FREC.

Question 127

What are the roles of the broker associates and sales associates in a LLC?

Answer 127

Broker associates and sales associates may register with the Department as a professional corporation or limited liability company to limit individual liability after providing authorization from the Secretary of State.

Question 128

How is the license in a LLC issued?

Answer 128

The license is issued in the licensee’s legal name only and shall include the designation LLC.
Example: John D. Smith, LLC.

Question 129

In a LLC, the department may license broker associates and sales associates as:

Answer 129

The department may license broker associates and sales associates as: an individual, professional corporation or limited liability company provided the licensee uses the legal name.

Question 130

A ______________ may not use a trade name or fictitious name at any time. They must register and operate under their true name only.

Answer 130

sales associate

Question 131

What are the requirements for an individual broker, partnership, or corporation wanting to use a trade name?

Answer 131

An individual broker, partnership or corporation may use a trade name, and if so it must be disclosed upon the request for a license and be placed upon the registration or license. It cannot be the same as a real or trade name of another registrant or licensee. No individual, partnership or corporation may be registered under more than one trade name. The actual name of the individual or an entity is not a trade name.
Such a name must be noted on the records of the Commission and placed on the license so that the public will know that this is a licensed broker and a registered company.

Question 132

The following cannot be registered as a real estate brokerage:

Answer 132

A Corporation Sole- church organization, but not a non-profit;
A joint venture-temporary relationship;
A Business Trust-investment group for its own purposes;
A Cooperative/Condominium/Homeowners’ Association- These associations are formed to manage common ownership and do not deal in real estate;
An unincorporated Association- local property owners, not partners;
An Ostensible (Quasi) Partnership - hidden relationship
An ostensible partnership may be formed without the knowledge of a real estate broker.

Question 133

A transaction involving a cooperating subagent is called:

Answer 133

co-brokerage

Question 134

A broker may cooperate with other brokers on either side of a transaction, either assisting a listing agent to locate a buyer or tenant, or assisting a buyer or tenant representative in locating a seller or landlord. In a co-brokered transaction, the listing broker splits the commission with the “co-broker,” typically on a:

Answer 134

50-50 basis.

Question 135

The federal government department which regulates RESPA is the:

Answer 135

Consumer Financial Protection Bureau (CFPB)

Question 136

___________ was enacted because Congress felt that consumers need protection from unnecessarily high settlement charges caused by certain abusive practices that have developed in some areas of the country.

Answer 136

Real Estate Settlement Procedures Act (RESPA)