Unit 5 Flashcards
Fiduciary Duties
Agents primary responsibility to principal as outlined in listing agreement or buyer agency agreement
Licensees owe customers a set of duties
- Treat all customers honestly
- Can’t negligently or knowingly give false information
- Must disclose all material adverse facts about the physical condition of property
Sponsored Licensees
After 4/3/12 only 2 types of licensees - brokers and managing brokers
Can’t perform the duties of managing brokers
Managing Broker
Taken additional courses
Can be in charge of individual branches
Can also be sponsoring broker of small office
Responsible for all real estate activities by affiliated licensees including record keeping and holding earnest $
Receives renewal application must notify licensee within 7 days or by registered mail within 10 days
Sponsoring Broker
Entity holding the company real estate license. Sponsoring broker can delegate duties to managing brokers and company personnel
Entity that holds the licenses of managing brokers and brokers
Maintain holding of licenses of their managing broker or brokers
(if dies ask within 15 days to find new sponsoring broker, maximum granted 60 days)
Change business address must notify state within 24 hours
Independent Contractor vs Employee
Must have signed Employment Agreement with each licensee and employee. Signed and dated by both parties
Employees are W2’d and employer has to pay taxes
Independent Contractor (3 prong test by IRS)
- Active license
- not employee for federal tax purposes agreed in writing
- 90% of income from sales
(flexible schedule, make their own schedule etc)
Statutory Nonemployee
Payment relates to sales
Contracts stating not employee for tax purposes
Personal Assistant
Licensed or unlicensed
Licensed personal assistants must be paid by sponsoring broker
Advertising
Managing Broker must indicate this on their advertising with their name
Supervision by Managing Broker (of office or offices)
- implement sponsoring broker office policies
- train
- assist
- supervise accounting
- supervising advertising
- inform licensees of federal and state laws
- comply with rules for licensees
If licensee terminates, broker signs and dates and sponsoring broker must send license to state within 2 days. Take license to new office and you get temporary 45 day permit before formal sponsor card in accepted
Policies and Procedure Manual For Brokerage
Present at every office
Given to every employee
Check for questions
Must address
- agency policy
- fair housing
- confidentiality of client information
- advertising
Broker Compensation
Collected only by managing broker or sponsoring broker and shared with licensees
Determined by agreement between broker and client
Cooperative Commission
Listing broker pays the selling broker amount advertised in MLS
Procuring Clause
Broker must have started or caused chain of events that resulted in sale
Real Estate Broker may still be entitled to commission if transaction not consummated as long as:
Licensed broker
procuring clause
employed under valid contract
if seller:
- refused to sell
- had a title with defects
- committed fraud
- unable to delivery possession
- insisted on terms not in listing
- had mutual agreement with buyer to cancel
Sponsoring Broker pays commission to:
- licensee under same sponsoring broker OR
- another firms sponsoring broker
Anti Trust
Real estate industry is subject to anti-trust laws - most common Sherman Act against price-fixing, group boycotting, allocation of customers or markets and tie-in agreements
Price Fixing
DO NOT imply “going rate” for commission or “normal” fee
Companies or individuals set prices together instead of allowing the open market to determine the price. Commissions are negotiable.
DN Call Registry - list does not want to be called by Telemarketers
Exception:
licensees are permitted to call up to 18 months after consumers last payment, purchase or delivery
For consumers who made inquiries can contact for up to 3 months after
CAN SPAM Act
Deals with email advertising
JUNK FAX Act
Deals with Faxing
