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CO RE Exam > Unit 5 > Flashcards

Unit 5 Flashcards

1
Q

What is Conway-Bouge decision?

A

Brokers are practicing limited law when they fill out forms

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2
Q

What court ruling is Rule F associated with?

A

Conway-Bouge

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3
Q

What is the purpose of Rule F?

A
  • Deals with (F)orms

- To assist brokers in complying with the Conway-Bouge decisions

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4
Q

Are you required to use an approved form when your attorney can draft a similar one for general use at the firm?

A

Yes. You must use an approved form

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5
Q

Can attorneys draft transaction specific contract for the parties that they represent?

A

Yes

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6
Q

Can a brokerage firms attorney prepare a contract to buy for a seller or buyer?

A

No.

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7
Q

Can a principal’s attorney prepare a contract to buy for a seller or buyer?

A

Yes

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8
Q

Language of approved forms must be used ______ as approved by the commission

A

Exactly

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9
Q

How do you delete a clause on a standard form?

A

Striking through but still legible

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10
Q

Do attorneys need to be part of an RE transaction?

A

No

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11
Q

Can certain clauses, specified by Rule F, be omitted in the printing of the form? If so, what primarily does not apply?

A

Yes. Financing methods may not apply.

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12
Q

If a specific clause is omitted from the form, what must still be printed?

A

The heading (i.e. assumption) followed by the word omitted

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13
Q

What is written in the additional provisions section?

A

Transaction specific provisions

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14
Q

Brokers’ personal provisions or _______ language may only be in a contract to which the broker is a ________ party (not the Contract to Buy and Sell).

A

exculpatory, principal

-Can’t say the buyer/seller can’t sue broker if it doesn’t go their way

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15
Q

Can brokers fill out a form without discussing it with the parties?

A

No

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16
Q

Contract forms generated by computer must:

A
  • Must reproduced language exactly as approved
  • Have software security to prevent language from being delated or changed
  • Differentiate any language added in the blanks (Italics, bold, larger size, different font. Does not have to be in any specific font - only different. Even handwriting is fine)
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17
Q

What is Rule F-3?

A

Addenda

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18
Q

What is an addenda?

A

An addendum explains more about something that wasn’t detailed within the contract.

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19
Q

Who can create an addenda?

A
  • Plural of addendum
  • May be created by an attorney of the principal or brokerage firm
  • Never created by a broker associate
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20
Q

Rule F does not apply to the following:

A
  • Contracts for new homes with warranties

- Contracts prepared by subdivision developers or new home builders

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21
Q

What is mediation

A

Mediation is a process in which a neutral person-the mediator-helps parties reach a settlement to their dispute

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22
Q

Is a mediation binding?

A

No

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23
Q

Is a resolution binding?

A

Yes. If signed by both parties

24
Q

Is mediation standard in all Colorado contracts? Is it negotiable?

A

Yes it is standard. No it is not negotiable.

25
Q

The parties (brokerage firm and consumer or seller and buyer) agree to submit any dispute about the contract in mediation within _____ days.

A

30

26
Q

If a party does not come to an agreement during a mediation, will a resolution be imposed?

A

No

27
Q

Do both parties need to agree on a mediator?

A

Yes

28
Q

Do both parties split the cost of mediation? Is this negotiable?

A

Yes. No.

29
Q

After fair mediation (if the dispute is not resolved), either party may go through _______ or go into court for ________.

A

Arbitration, Litigation.

30
Q

What is arbitration?

A

A form of alternative dispute resolution, is a legal technique for the resolution of disputes outside the courts.

31
Q

What is litigation?

A

Litigation is the term used to describe proceedings initiated between two opposing parties to enforce or defend a legal right. Litigation is typically settled by agreement between the parties, but may also be heard and decided by a jury or judge in court.

32
Q

What are the two ways to represent as a broker?

A
  • Agent

- Transaction Broker

33
Q

Agents owe OLD CAR. What does OLD CAR stand for?

A
  • Obedience
  • Loyalty
  • Disclosure
  • Confidentiality
  • Accountability
  • Reasonable care/diligence
34
Q

What is the main difference between agent and transaction broker?

A

Agents only represent 1 side (buyer OR seller), whereas transaction brokers represent both sides (at the same time).

35
Q

How is an agency representation created?

A

Through a written agency listing contract

36
Q

Agent brokers require additional fiduciary duties such as _____, ________, _________.

A
  • Obedience
  • Loyalty
  • Advocacy
37
Q

With an agency broker, you owe all loyalty to the ________ whose interest are before all others.

A

Principal

38
Q

Transaction brokers owe DCAR. What does DCAR stand for?

A
  • Negative disclosure (only things that could change your mind)
  • Confidentiality
  • Accountability ($ and docs)
  • Reasonable skill and care
39
Q

How is a transaction broker representation created?

A

-Written exclusive right-to-buy or exclusive-right-to-sell contract and checking the box at the top for transaction broker
OR
-Created by default using a written disclosure

40
Q

Transaction brokers act as a mediator or referee, thus, they keep what information confidential?

A
  • Motivation
  • Price
  • Terms
41
Q

What is required to be written in the office manual of a brokerage firm?

A

How they designate broker associates to represent the firm’s clients

42
Q

A brokerage firm is obligated to supervise each broker associated based on their experience level. How many years of experience requires a high level of supervision?

A

Less than 2

43
Q

True or False? All contracts do not belong to the brokerage firm?

A

False.

44
Q

The ______ are the consumer (buyer, seller, landlord, tenant) and the brokerage firm

A

Parties (to a contract)

45
Q

Can a brokerage firm’s attorney or consumer’s attorney draft a transition specific listing agreement?

A

Yes

46
Q

The brokerage firms attorney may draft an _______ to be used used by all brokers in the firm for all listings.

A

Addendum (i.e. mold)

47
Q

What are express contracts? Are seller and buyer listing contracts express contracts?

A
  • Written or oral contacts

- Yes, they are express

48
Q

Are implied contracts acceptable? (implied only through action)

A

No

49
Q

Can a broker refuse to take a listing or work with a buyer?

A

Yes

50
Q

Are seller and buyer listing contracts (exclusive right to buy/sell) used to establish representation? Do they meet the express written agency agreement requirement?

A
  • Yes

- Yes

51
Q

Is the compensation charged by brokerage firms set by law? If not, is it negotiable?

A
  • It is not set by law

- It is negotiable

52
Q

Who technically earns the commission?

A

The brokerage firm

53
Q

Is the seller’s listing fee/commission negotiable?

A

Yes

54
Q

Who typically pays the buyer’s broker fee/commission?

A

Listing broker (then seller, then buyer)

55
Q

What is another term for buyer’s broker’s fee?

A

Success fee

CO RE Exam (10 decks)

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