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Real Estate Exam! > Unit 5: Real Estate Brokerage Activities and Procedures > Flashcards

Unit 5: Real Estate Brokerage Activities and Procedures Flashcards

1
Q

True/False Brokers are required to open and maintain an escrow account.

A

False. Florida law does not require the broker to have a telephone, desk, business checking account, or an escrow account.

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2
Q

True/False A broker assigns two sales associates to a new model center in a subdivision that is under construction. Sales transactions are conducted in the model center. The broker must register the model center as a branch office.

A

True.

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3
Q

True/False A broker closes one branch office and opens a new branch office on the same day. The branch office registration of the closed office may be transferred to the new office by simply mailing a change of address for the new location.

A

False. Even though these actions took place on the same day, the registration of the closed office may not be transferred to the new office. The new location must be registered and the branch office license fee paid.

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4
Q

True/False The names of the broker associates must be listed on the brokerage entrance sign.

A

False. The names of the sales associates and broker associates are not required on the entrance sign. However, if the associates’ names appear on the sign, the names must be below the name of the broker(s) and the appropriate title, sales associate or broker associate, must appear next to each associate’s name.

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5
Q

True/False The office sign at the entrance of the brokerage business must display the brokerage street address.

A

False. There is no requirement to include the brokerage office street address on the entrance sign. The office sign must contain the broker’s name, trade name (if one is used), and the words “Licensed Real Estate Broker” or “Lic. Real Estate Broker.”

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6
Q

Team Advertising

A

The name or logo used by one or more licensees who represent themselves to the public as a team (or group).

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7
Q

Blind Advertisement

A

An advertisement that provides only a telephone number, a post office box, and/or an address without the licensed name of the brokerage firm.

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8
Q

Point Of Contact Information

A

Any means by which to contact the brokerage firm or individual licensee, including mailing address(es), physical street address(es), email address(es), telephone number(s), or facsimile telephone number(s).

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9
Q

Telephone Solicitation

A

The initiation of a telephone call for the purpose of encouraging the purchase of, or investment in, property, goods, or services.

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10
Q

True/False When advertising on a website, the name of the brokerage firm must appear at the top of every web page.

A

False. When advertising on a website, the name of the brokerage firm must appear adjacent to or immediately above or below the point of contact information.

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11
Q

True/False If a broker allows his associates to form teams, at least quarterly, the broker MUST maintain a current written record of each team’s members.

A

False At least monthly, the registered broker must maintain a current written record of each team’s members.

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12
Q

True/False Senders of unsolicited fax solicitations must state on the advertisement that the recipient has the right to opt out of receiving future unsolicited advertising faxes.

A

True

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13
Q

True/False Telephone solicitation laws restrict telemarketing calls to no later than 9:00 pm.

A

True

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14
Q

Deposit

A

Earnest money or some other valuable consideration given as evidence of good faith to accompany an offer to purchase or rent. See also binder and earnest money.

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15
Q

Earnest Money

A

A type of money that a broker may handle for others in the ordinary course of business; also called a good-faith deposit or binder deposit.

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16
Q

Escrow Account

A

An account in a bank, title company, credit union, savings association, or trust company used solely for safekeeping customer funds and not for deposit of personal funds; impound account or trust account.

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17
Q

Trust Funds

A

Cash, checks, money orders, and items that can be converted into cash, such as deeds and personal property, that a person (broker) holds in trust for another person.

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18
Q

Immediately

A

The time period during which a broker must deposit escrow funds; no later than the end of the third business day after the broker’s sales associate or an employee has received the funds.

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19
Q

True/False If escrow funds are held by a title company, the broker is under no obligation to deliver the funds to the title company within three business days.

A

False. The broker is required to deliver the funds to the title company within the same time frame required for depositing the funds into the broker’s escrow account. Therefore, brokers who choose to use a title company as escrow agent must turn the funds over to the escrow agent no later than the end of the third business day following receipt of the funds.

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20
Q

True/False A sales associate receives a rental deposit from a tenant on Thursday afternoon. The broker MUST deposit the funds in the escrow account by the end of business on Tuesday.

A

True

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21
Q

All earnest money sale deposits must be placed immediately in an escrow account and cannot be intermingled or commingled with the broker’s personal or operating funds or funds of any other person.

A

True

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22
Q

A broker may choose to place escrow funds into an interest-bearing escrow account without first consulting with the parties to the contract.

A

False. The broker must get written permission from all parties to the contract before placing funds into an interest-bearing escrow account.

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23
Q

Conflicting Demands

A

When different parties each make claims that are inconsistent with one another.

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24
Q

The act of having a third party attempt to reconcile a dispute between two parties.

A

Mediation

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25
Q

The act of having a third party render a binding decision in a dispute between two parties.

A

Arbitration

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26
Q

A lawsuit; the act of carrying on a lawsuit; a case before a court of law.

A

Litigation

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27
Q

A course of action for determining the disposition of a contested deposit.

A

Escrow Disbursement Order (EDO)

28
Q

A broker’s uncertainty as to which party should receive the escrowed property.

A

Good-faith Doubt

29
Q

True/False In the event of disputed funds, a broker may request that the Florida Real Estate Commission issue an escrow disbursement order (EDO).

A

True

30
Q

True/False A broker placed a customer’s escrow deposit with a title company. The contract fell apart, and the buyer and seller each made demands for the escrow funds. The broker MUST notify the FREC of conflicting demands.

A

False. If a title company is the escrow agent, the broker has no obligation to report an escrow dispute to the FREC or to institute a settlement procedure.

31
Q

True/False The broker is required to timely notify the Commission when a buyer of a residential condominium unit timely gives written notice to the broker’s sales associate of the buyer’s intent to cancel a purchase contract.

A

False. If a buyer of a residential condominium unit timely delivers to a licensee written notice of the buyer’s intent to cancel the contract as authorized by the Condominium Act, the licensee may return the escrowed property to the purchaser without notifying the Commission or initiating any of the settlement procedures.

32
Q

True/False Arbitration is a nonbinding settlement procedure used when the parties to a contract have conflicting demands.

A

False. Arbitration is a process whereby, with the prior written consent of all parties to the dispute, the matter is submitted to a third party who makes a binding judgment in favor of one side or the other.

33
Q

True/False The purchaser of a current rental list was not able to find a suitable rental unit. The purchaser is entitled to a full refund of the cost of the rental list.

A

False. If the purchaser of rental information does not find a suitable rental, the prospect is entitled to a 75% refund of the fee paid if requested within 30 days of the date indicated on the rental list receipt.

34
Q

True/False A violation of the requirements regarding rental lists is a misdemeanor of the second degree.

A

False. Advertising rental property information or lists that are not current or are materially inaccurate is illegal. Any person who violates the rental list requirements is guilty of a misdemeanor of the first degree, subject to a fine of up to $1,000 and/or imprisonment of up to one year, and subject to license suspension or revocation.

35
Q

State and federal laws designed to maintain and preserve business competition.

A

Antitrust Laws

36
Q

Competing brokers conspire to establish a standard commission rate rather than let the rate be set by the open market.

A

Price-fixing

37
Q

An agreement between brokers to split up competitive market areas among themselves and not compete in each other’s areas.

A

Market Allocation

38
Q

Payment of money from someone other than the buyer or the seller associated with real estate business.

A

Kickback

39
Q

True/False A real estate licensee offers to share part of the commission with the buyer. This is an example of a legal kickback or rebate.

A

True

40
Q

True/False Sales associates may not open their own offices or operate independently of their broker or owner-developer.

A

True

41
Q

True/False Florida law authorizes all brokers to place a lien on residential real estate for nonpayment of commission.

A

False. A broker may place a lien on residential real property for nonpayment of commission only if the broker is expressly authorized to do so in the listing agreement, the buyer representation agreement, or the sale contract.

42
Q

Dealing as an individual in business.

A

Sole Proprietorship

43
Q

An association of two or more persons for the purpose of jointly conducting a business, each being responsible for all the debts incurred in the conducting of that business.

A

General Partnership

44
Q

A business entity consisting of one or more general partners and one or more limited partners.

A

Limited Partnership

45
Q

One or more parties cause a third party to be deceived into believing that a business relationship exists when no such arrangement exists.

A

Ostensible Partnership

46
Q

A business entity that features protection from personal liability but with fewer legal restrictions compared with other business entities.

A

Limited Liability Partnership (LLP)

47
Q

An artificial or fictitious person formed to conduct specified types of business activities.

A

Corporation

48
Q

An alternative, hybrid business entity with the combined characteristics and benefits of both limited partnerships and S corporations.

A

Limited Liability Company (LLC)

49
Q

Any adopted or fictitious name used to designate a business concern.

A

Trade Name

50
Q

A business corporation consisting of one or more individuals engaged in a primary business that provides a professional service (e.g., lawyer, doctor).

A

Professional Association (PA)

51
Q

An individual hired by a licensee to perform administrative tasks associated with real estate transactions. Whether a personal assistant must be a real estate licensee is determined by the tasks the assistant performs.

A

Personal Assistant

52
Q

The only active broker of a brokerage entity dies. The vacancy must be filled within 14 calendar days.

A

True

53
Q

An ostensible partnership may be registered as a real estate brokerage entity.

A

False. An ostensible (or quasi-partnership) is considered to be fraudulent and deceitful if the public is deceived into believing that a partnership exists.

54
Q

A corporation sole is permitted to register as a real estate broker.

A

False. A corporation sole cannot be registered as a real estate broker. A corporation sole is an ecclesiastical or church organization, usually headed by a bishop or other clerical official who has been empowered by a church to hold title to church property. Before dealing with a corporation sole, a broker should obtain a written opinion from an attorney who has experience in such titles.

55
Q

True/False The brokerage office sign must contain (1) the trade name (if applicable), (2) the broker’s name, and (3) the words “Licensed (or Lic.) Real Estate Broker.

A

True

56
Q

Which statement is TRUE regarding interest-bearing escrow accounts?

A) It is illegal for the broker to keep any interest earned on escrow funds.
B) The broker must get written permission from all parties to the transaction before placing the funds into an interest-bearing account.
C) Brokers may make an office policy that all escrow funds must be placed in an interest-bearing account to help cover the costs of maintaining the account and are not required to disclose this in each sale contract because it applies to all transactions.
D) Florida license law requires that interest accrued on escrowed funds be credited to the buyer because it is the buyer’s earnest money deposit.

A

B) The broker must get written permission from all parties to the transaction before placing the funds into an interest-bearing account.

57
Q

Which settlement procedure involves a negotiated settlement between the disputing parties?

A) Arbitration
B) Escrow disbursement order
C) Mediation
D) Litigation

A

C) Mediation

58
Q

A licensed real estate broker has a successful real estate business. The broker has branch offices in the Florida communities of Fort Myers, Naples, and Bradenton. The broker wants to close her Bradenton office and open a new branch office in Sarasota. Which statement applies to this situation?

A) The broker can request that the branch office license for Bradenton be transferred to the Sarasota location to avoid paying another branch office fee.
B) The broker must request permission from the DBPR to relocate to Sarasota before opening the new location.
C) The broker must register the new branch location and pay the branch office license fee.
D) The broker simply must notify the DBPR within 15 business days of the change of address from the Bradenton location to the new Sarasota location.

A

C) The broker must register the new branch location and pay the branch office license fee.

59
Q

What is the fine per telephone call for a violation of the Florida Telemarketing Act?

A) $10,000
B) $11,000
C) $1,000
D) $5,000

A

A) $10,000

60
Q

Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation?

A) Susan has formed a real estate brokerage business as a limited liability company (LLC).
B) Susan has formed a limited liability company (LLC) for income tax purposes only and is employed by and registered under either a licensed real estate broker or an owner-developer.
C) Susan is in violation of Florida license law.
D) Susan must partner with a real estate broker in order for her license to be issued this way.

A

B) Susan has formed a limited liability company (LLC) for income tax purposes only and is employed by and registered under either a licensed real estate broker or an owner-developer.

61
Q

A real estate broker does NOT have to report to the FREC conflicting demands regarding escrowed property if the escrowed funds are maintained by which method?

A) Florida attorney’s trust account
B) Florida credit union
C) All of these
D) Florida savings association

A

A) Florida attorney’s trust account

62
Q

What amount of a broker’s own personal funds may the broker place in the property management escrow account?

A) $6,000
B) $7,000
C) $5,000
D) $10,000

A

C) $5,000

63
Q

What is the maximum finder’s fee that may be paid in the form of a credit toward rent paid to the tenant for referring a person to the management company if that person later becomes a tenant of the complex?

A) $50
B) One month’s rent
C) $100
D) $0 (this is an illegal kickback)

A

A) $50

64
Q

For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR?

A) Two years, regardless of whether the contract closed
B) Five years, regardless of whether trust (escrow) funds were collected
C) 90 days, if no escrow funds were collected
D) Six months, if escrow funds were collected but the contract failed to close

A

B) Five years, regardless of whether trust (escrow) funds were collected

65
Q

A broker who has a good-faith doubt regarding who is entitled to escrow funds should take which action?

A) Institute one of the settlement procedures within 15 business days.
B) Notify the FREC in writing of the good-faith doubt within 15 business days.
C) Send a certified letter to the parties to the contract indicating that the broker will forfeit the funds if the parties do not make a claim within 30 business days.
D) Request an escrow disbursement order from the DBPR.

A

B) Notify the FREC in writing of the good-faith doubt within 15 business days.

66
Q

A broker asked the Commission to issue an escrow disbursement order (EDO) regarding disputed escrowed funds. Before the EDO was issued, the escrow dispute was settled between the parties. How long does the broker have to notify the FREC that the matter has been resolved?

A) 10 business days
B) 24 hours
C) 15 business days
D) 30 calendar days

A

A) 10 business days

67
Q

A sales associate may hold which position?

A) Limited partner in a real estate brokerage limited partnership
B) Owner of a sole proprietorship real estate business
C) President of a real estate brokerage corporation
D) General partner in a real estate brokerage partnership

A

A) Limited partner in a real estate brokerage limited partnership

Real Estate Exam! (20 decks)

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