FLORIDA 2-20 STATE EXAM AND PRACTICE EXAM FINAL EXAM 2024-2025, Exams of Business Accounting

Download FLORIDA 2-20 STATE EXAM AND PRACTICE EXAM FINAL EXAM 2024-2025 and more Exams Business Accounting in PDF only on Docsity! 1 | P a g e FLORIDA 2-20 STATE EXAM AND PRACTICE EXAM FINAL EXAM 2024-2025 WITH ACTUAL CORRECT QUESTIONS AND VERIFIED DETAILED ANSWERS |FREQUENTLY TESTED QUESTIONS AND SOLUTIONS |ALREADY GRADED A+|BRAND NEW!!!|LATEST UPDATE |GUARANTEED PASS The Commercial Property coverage extension, Non-Owned Detached Trailers, pays on an excess basis up to $____ for non-owned trailers used in the insured's business at the insured location. 5,000 The Basic Form Cause of Loss perils include: riot or civil commotion The Broad Form Cause of Loss perils include: both falling objects and weight of ice snow or sleet EXCLUDED property includes all BUT which of the following: materials, equipment, and supplies on the insured premises used to alter or repair the insured building In the Business Income policy the period of restoration begins how many hours after the date of direct damage. 72 True or False. The Subrogation condition can be waived. true The Basic Form Cause of Loss perils include: windstorm and hail and smoke and vandalism In the Commercial Property policy personal property of others is covered: 2 | P a g e only at the insured location True or False? The Extra Expense Coverage Form has a 96 hour waiting period. false The Broad Form Cause of Loss perils include: falling objects and weight of ice snow and sleet The Commercial Property Insurance policy requires a ___ day notice for non-payment of premium. 10 In the Commercial Property policy the additional coverage, Fire Department Service Charge, pays up to $___. 1,000 In the Commercial Property policy form business personal property "off-premises" is covered up to what amount? 10,000 The Basic Form Cause of Loss perils include riot or civil commotion An insured has the following limits with the "basic" limits for Medical Payments coverage. What is the basic limit for Medical Payments coverage? 5,000 The CGL condition which treats each insured independently and separate from all other insureds is: separation of insureds condition True or False? Farm Liability includes liability for pollutants and injury to farm employees. false True or False? The Farm Liability coverage form covers personal and advertising injury. true True or False: The CGL's Supplemental Payments provide up to $300 per day for loss of earning for time taken off of work in the investigation or defense of an insured's claim. false This Miscellaneous Medical Professions coverage form is defined as an act or omission in the rendering of optometric services: optometrist 5 | P a g e 45 __________ is by and large when a property is without occupant or contents (entirely and materially empty). vacancy All of the following are true regarding "contracts of adhesion" EXCEPT which of the follow? ambiguities are resolved in favor of the insurance company All of the following are true regarding the Insuring Agreement in Liability insurance policies EXCEPT: payments are made directly to the insured or the insureds family members Insurance contracts are personal contracts were the focus is on? the person or persons being insured 3 multiple choice options Insurance policies require all changes to the policy to be made in ___________ to the insurance company. writing 3 multiple choice options The insured has had a $60,000 loss and it has been discovered that she has two liability policies which both apply to the same loss on a pro-rata basis. The first policy has a $1,000,000 limit and the second policy has a $2,000,000 limit. How much will each company pay towards this loss? first company 20,000 and second company 40,000 3 multiple choice options An insurance policy can be changed by adding an ______________ to a policy endorsement 3 multiple choice options Straight deductibles specify the deduction of a flat amount from a loss, regardless of the ______ of the loss. size 3 multiple choice options All of the following are true regarding "insurable interest" EXCEPT: insurable interest is not required in a property insurance policy 3 multiple choice options 6 | P a g e Florida law deems information provided by the insured in an insurance application to be _____________ and not ______________. representations and not warranties 3 multiple choice options A man steps off a curb into busy traffic while he was texting on his iPhone; he stepped directly in front of a car which was forced to slam on their brakes. Unfortunately the car skidded into a food truck which then ricocheted into the food truck next to it. What was the proximate cause of all the damage? the man stepping into oncoming traffic 3 multiple choice options Which of the following statements if any are true? Statement One: Binders can be oral or in writing. Statement Two: Binders are issued after the issuance of a policy. only statement one is true 3 multiple choice options True or False? Requiring "Insurable Interest" in a Property and Casualty policy upholds the principal of adhesion. false Florida is a pure "comparative negligence" legal venue. If you are 90% at fault in an accident, what percent of your damages can you collect from the other party that was 10% responsible for the accident? 10% 3 multiple choice options A ________ in insurance terms is the reduction and/or destruction in use, value, access, custody, or function of or in property. loss 3 multiple choice options Liability insurance means any insurance where payment by the insurance company will be paid on behalf of the insured to another. Payment by the insurer will be based upon the insured's ____________ to the payee/claimant. liability 3 multiple choice options Judy has a loss that was caused by another party. She makes a claim with her own insurance company and now her insurance company is ____________ to Judy's right of recover against the responsible party. 7 | P a g e subrogated 3 multiple choice options Which doctrine holds that an unbroken chain of events which causes injury or property damage is the substantial and effective cause of the loss. the doctrine of proximate causation 3 multiple choice options Shelby was injured in an auto accident and has $90,000 in injuries and has a $1,000 PIP deductible. How much will Shelby receive as a claims payout from her insurance company? 10,000 3 multiple choice options True or False? Medical Payments coverage is primary, with respect to other available medical payments coverage, when occupying owned automobiles, and excess when occupying non-owned autos. true The Uninsured Motorists (UM) law requires that every policy that provides primary Liability coverage for a specific motor vehicle must include "stacked" UM at the same limits as apply for Liability coverage, unless the insured, in writing does which if any of the following (multiple options are available to the insured). rejects UM coverage , elects UM coverage at limits lower than those that apply for liability, and elects " non-stacked" UM coverage Which, if any, of the following are non-compliance penalties for not complying with the Florida No-Fault Law? no immunity , personally responsible for PIP benefits, and suspension of drivers license and vehicle registration Medical Payments are payments (without regard to fault or legal liabilities) for necessary medical and funeral expenses rendered within ______ years from the date of accident to an "insured". 3 3 multiple choice options The medical benefits paid under Personal Injury Protection are up to ____% of reasonable expenses for necessary medical services. 80 3 multiple choice options Collision Coverage and Other Than Collision Coverage for a "newly acquired auto" begins on the date you become the owner. However, for this coverage to apply, you must ask us to insure it within ___ days 10 | P a g e open 3 multiple choice options All of the following are "not eligible" as a named insured for a Homeowners policy EXCEPT: individual owner occupant of a 1-4 family dwelling 3 multiple choice options In the Dwelling Fire DP-1 policy form, "other coverages" ____ increase the limits of insurance for each stated coverage. do not The "additional coverages" section of the Homeowners Insurance Policy provides up to $_____ coverage for property damage to property of others caused by the insured irrespective of legal liability. 1,000 3 multiple choice options Coverage D — “Loss of Use” in the Homeowners policy (HO-3) covers increases over normal living costs if damage from a covered peril makes the residence _____________. uninhabitable 3 multiple choice options In the Homeowners Insurance Policy "debris removal and reasonable repairs" after a loss are covered up to ___% of Coverage A. 5 3 multiple choice options In the Personal Articles Floater (PAF) policy the "pairs, sets and parts provision reserves the insurance companies right to: elect to repair or replace or to restore the pair or set to original value , or pay the difference between ACV before and after the loss The Broad Form DP-2 policy includes all of the DP-1 coverages and adds which of the following perils falling objects weight of ice snow and sleet volcanic eruption accidental discharge or overflow of water True or False? The Florida Statutes require any policy with the RCV provision in it not hold-back for depreciation notwithstanding the repair or replacement of damaged property. true 11 | P a g e Which, if any, of the following statements are true regarding Coverage A- Dwelling coverage? Statement One: Coverage A covers the dwelling and structures attached to it Statement Two: Coverage A covers construction materials and supplies on or adjacent to the residence premises both statements are correct 3 multiple choice options The NFIP flood insurance _____ available in any community that HAS NOT adopted and enforced federal floodplain regulations. is not 1 multiple choice option In the Personal Articles Floater (PAF) policy newly acquired jewelry, furs, and cameras are covered for: 30 days automatic coverage for same class of property up to 25% of the coverage limit but no more than $10,000 3 multiple choice options The Personal Articles Floater (PAF) insures specific classes of property; all but which of the following are true statements about the PAF. inherent vice is an included peril 3 multiple choice options All of the following are considered "insured locations" in the Homeowners Insurance Policy EXCEPT: properties owned by residing relatives of the named insured 3 multiple choice options In the Dwelling Fire Policy Coverage D - Fair Rental Value protects the insured for loss of fair rent IF: all of the above 3 multiple choice options In the Homeowners Insurance Policy, what is the "specific limits" listed in the policy for the following classes of personal property: securities; watercraft and related equipment; trailers; theft of jewelry, watches, furs and precious stones; electronic apparatus in a motorized vehicle; and electronics used primary for business purposes while away from the residence premises? 1,500 3 multiple choice options All of the following meet the definition of Flood or Flooding EXCEPT: broken water pipe 3 multiple choice options 12 | P a g e The Vandalism endorsement in the DP-1 policy does not provide any coverage if the building was vacant for ___ or more consecutive days immediately preceding a loss. 60 3 multiple choice options Liability coverage in the Homeowners Policy defines an insured as which of the following? (select all that apply) the named insured residing relatives All of the following are "general exclusions" in the Homeowners Insurance Policy EXCEPT? vandalism 3 multiple choice options Section III Physical Damage in the BAP covers: both A and B 3 multiple choice options In the BAP Comprehensive covered perils include: both a and b 3 multiple choice options The insuring agreement for Garage Liability states: “We will pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies caused by an _________ and resulting from ‘garage operations’. accident 3 multiple choice options Mrs. Murser, your BAP insured has suffered a theft loss to two vehicles in her fleet. She has Specified Causes of Loss coverage on the vehicles. Are these losses covered? yes theft is a specified cause of loss 3 multiple choice options Your BAP insured has his truck damaged in an earthquake. He has Specified Causes of Loss coverage on the vehicle. Is the earthquake damage covered? yes earthquake is a specified loss 3 multiple choice options The Garage Policy endorsement "False Pretense" provides coverage for: 15 | P a g e true 1 multiple choice option Which of the following perils are covered in the Garage policy's Specified Causes of Loss coverage? both fire and theft Who may appoint a Customer Representative? Select one: A. A surplus lines agent holding a general lines license and a surplus lines license B. A general lines agent or a general lines insurance agency C. An adjuster D. An insurance company B. A general lines agent or a general lines insurance agency Mr. Smith lives in New Jersey but visits Florida each year. When does he come under the Florida No- Fault system, in any 365-day period? Select one: A. After 60 days in Florida B. After 30 days in Florida C. After 14 days in Florida D. After 90 days in Florida D. After 90 days in Florida A Hospital Indemnity Policy covers which of the following expenses? Select one: A. A flat amount per day for hospital room and board B. Nursing care in the insured's home C. Medical supplies D. Surgical fees incurred in the hospital A. A flat amount per day for hospital room and board Under the Garagekeepers coverage, Section III of the Garage policy, the insured suffers a single vandalism loss to nine (9) vehicles belonging to customers. Damage is $100 per vehicle. How much will the policy pay? Select one: A. $500 B. $900 C. Nothing D. $400 D. $400 16 | P a g e Bob, an accountant of XYZ, drives his own car to the bank to make a deposit for XYZ. Bob has an at-fault accident. If XYZ carries $1,000,000 Bodily Injury/Property Damage coverage with a Symbol 2 for covered autos, and Bob carries no insurance, how much coverage is applicable for XYZ? Select one: A. No coverage B. $10,000/$20,000 Bodily Injury and $10,000 Property Damage C. $1,000,000 D. $500,000 A. No coverage Unless properly licensed an general lines agent cannot Select one: A. All of these answers are correct B. Receive any money on account for any insurer or receive money to be transmitted to an insurer for a policy, renewal, endorsement or certificate C. Solicit insurance or procure applications for insurance D. Directly or indirectly represent himself or herself to be an agent or receive, deliver or forward any insurance policy within the state A. All of these answers are correct At the time of a loss, it is found that the covered building had been vacant for the period of 75 consecutive days immediately preceding the loss. Which of the following perils would not be covered? Select one: A. All of these answers are correct B. Windstorm C. Fire D. Vandalism D. Vandalism Homeowner's Coverage C - Personal Property covers each of the following situations except? Select one: A. The property of a guest anywhere in the world B. The insured's personal property while in Mexico at a secondary dwelling C. A resident employee's contents at the insured's dwelling D. The property of others while located at the insured's dwelling at the insured's request A. The property of a guest anywhere in the world Under a basic Boiler and Machinery Form, with no special endorsements, which of the following losses would be covered? Select one: A. The insured suffers loss of income following an accident to a covered object B. During an accident involving a covered object, a visitor on the insured's premises suffers injuries and sued the insured C. During testing, after some repairs, a boiler had a sudden breakdown 17 | P a g e D. Property owned by another in the care of the insured was damaged in an accident to an insured object, resulting in a claim by the owner of the property D. Property owned by another in the care of the insured was damaged in an accident to an insured object, resulting in a claim by the owner of the property The Homeowner's, HO3 policy will provide coverage for a student away at college as long as the student's premises was not unoccupied more than how many days prior to the loss? Select one: A. 60 days B. 30 days C. 90 days D. 45 days C. 90 days Florida Statutes establish standards, which must be met by Medicare Supplement insurance. Which of the following is not a standard? Select one: A. The policy may not limit coverage for more than 6 months because of a pre-existing health condition B. Policies must be written in understandable language C. The policy is returnable within one year for full premium refund D. The policy must be accompanied by an outline of coverage and a Medicare Supplement Buyer's Guide C. The policy is returnable within one year for full premium refund Which of the following does not have an insurable interest in a property? Select one: A. A mortgage company B. A friend who purchased insurance in his own name because the owner refuses to buy insurance C. The son of owner who expects to inherit property D. A mother-in-law who gives cash as a gift D. A mother-in-law who gives cash as a gift What are possible consequences for aiding and abetting an unauthorized insurer? Select one: A. Conviction of a third-degree felony B. All of these answers are correct C. Subject to suspension or revocation of all insurance licenses D. Liability for all unpaid claims of the unauthorized insurer B. All of these answers are correct Actual Cash Value is best defined as: Select one: A. Replacement cost less tax depreciation B. Original cost less tax depreciation 20 | P a g e B. MEWAs are defined as an arrangement that is established or maintained to provide one or more various insurance benefits (health insurance) to the employees of two or more employers C. All of these answers are correct D. MEWAs (Multiple-Employer Welfare Arrangement) are regulated as risk-bearing entities by the Florida Insurance Code C. All of these answers are correct Personal Liability (Section III) of a Homeowner's policy covers which of the following? Select one: A. Bodily Injury or Property Damage caused by war B. Bodily Injury to a member of the household by a neighbor's dog C. Damage to the insured's property caused by a visitor D. Bodily Injury or Property Damage caused by personal activities of the insured or family members anywhere in the world D. Bodily Injury or Property Damage caused by personal activities of the insured or family members anywhere in the world Which of the following would not be considered an "employment" under the worker's compensation law? Select one: A. One or more employees in the construction industry B. Private employments with four or more employees except in the construction industry C. Governmental employments regardless of the number of employees D. Domestic servants in private homes D. Domestic servants in private homes Under the Commercial Property policy, the Special Causes of Loss Form provides coverage for direct physical loss unless the loss is from which one of the following perils? Select one: A. Employee dishonesty B. All of these answers are correct C. Zoning and planning errors D. Wear and tear B. All of these answers are correct If Flood is confined to a single building, how much area must be inundated in order for the Flood policy to provide coverage? Select one: A. Two acres or over B. One acre or over C. Three acres or over D. No limit A. Two acres or over 21 | P a g e Which of the following is not covered by the Dwelling Policy DP1? Select one: A. Other Structures B. Debris removal C. Fair Rental Value D. Additional Living Expense D. Additional Living Expense Under the Commercial Property Policy, the Value Reporting Form limits a settlement to which percentage if the first report is not filed on time? Select one: A. 50% B. 80% C. 75% D. 90% C. 75% What is the maximum medical benefit under Workers' Compensation? Select one: A. $5,000 B. 85 - 95% of loss of wages C. Unlimited D. 80% of medical costs C. Unlimited An appliance store sells a refrigerator to Mrs. Smith. The refrigerator is installed in Mrs. Smith's kitchen and after the installation had been completed, the refrigerator blows up catching fire and damaging the kitchen and injuring Mrs. Smith. The appliance store's Commercial General Liability policy covers? Select one: A. Bodily Injury to Mrs. Smith and damage to the, refrigerator, but not the kitchen B. Bodily Injury to Mrs. Smith and damage to the kitchen but not the refrigerator C. All losses are covered D. Bodily Injury to Mrs. Smith only B. Bodily Injury to Mrs. Smith and damage to the kitchen but not the refrigerator Which of the following is a true statement concerning sole proprietors under the worker's compensation law? Select one: A. All partners are considered to be employers and may exempt themselves under the law B. A sole proprietor may elect to be exempt from coverage under the law C. All of these answers are correct D. Sole proprietors and partners in the construction industry may not exempt themselves from coverage D. Sole proprietors and partners in the construction industry may not exempt themselves from coverage 22 | P a g e The insured has a Commercial General Liability policy written on a Claims Made basis. During the policy term an incident occurred and was reported to the agent. No claim was made until two years after expiration of the policy and after coverage had been renewed by another insurer. Which of the following describes how the insurer will respond? Select one: A. The claim will be paid by the current insurance company B. The claim will be denied because the Statute of Limitations has expired C. The claim will be denied because the claim was not presented during the policy period D. The claim is covered by the carrier at the time of the incident since the incident was reported during the policy period and the claim was made within five years of expiration of the claims made policy D. The claim is covered by the carrier at the time of the incident since the incident was reported during the policy period and the claim was made within five years of expiration of the claims made policy A General Lines Agent is: Select one: A. A personal lines agent who has not complied with the continuing education requirements of the State of Florida B. One approved by a general lines agent to assist in transacting business of private passenger motor vehicles from the agency office C. One who is appointed by a general lines agent or agency to assist in transacting the business of the agency from the agency office D. One who may transact property insurance, casualty insurance, surety insurance, health insurance, and marine insurance in the State of Florida D. One who may transact property insurance, casualty insurance, surety insurance, health insurance, and marine insurance in the State of Florida An insured whose legally parked automobile is damaged by a mudslide may collect for damages under which of the following coverages? Select one: A. No coverage B. Other than Collision C. Property Damage Liability D. Collision B. Other than Collision Under the Building and Personal Property coverage form, which of the following items would be covered for damage by windstorm? Select one: A. Fences B. None of these answers are correct C. Outdoor TV antenna D. Shrubbery B. None of these answers are correct 25 | P a g e An insured with the Building and Personal Property form covering $100,000 on Personal property, left tools and equipment in a company van which was parked just outside (within 75 feet) of the building overnight. What would the insurer pay for a theft loss of tools from the van? Select one: A. No coverage B. 10% of personal property limit would apply, up to $25,000 C. Only $2,500 extension applies to personal property outside of building D. Entire loss, less deductible (if applicable) D. Entire loss, less deductible (if applicable) All of the following are covered by Mail Coverage (Inland Marine Form) except: Select one: A. Parcel Post B. Registered Mail C. First Class Mail D. Express Mail A. Parcel Post Workers' Compensation will pay benefits for which of the following? Select one: A. Injury due to intoxication B. Intentional self-injury C. Injury due to illegal drug use D. Refusal to use required safety devices D. Refusal to use required safety devices Joe carries $2,000 Medical Payments coverage on his automobile. Joe's daughter used a friend's automobile and was involved in an accident resulting in $3,500 in medical bills. The friend carries Medical Payments coverage in the amount of $3,000. How much will Joe's policy pay, if any? (Ignore Personal Injury Protection coverage) Select one: A. $500 B. $1,500 C. $3,000 D. None A. $500 Under FAJUA, the maximum limits for Bodily Injury and Property Damage are: Select one: A. $100,000/$300,000 Bodily Injury and $50,000 Property Damage B. $100,000/$300,000 Bodily Injury and $25,000 Property Damage C. No Maximum D. $250,000/$500,000 Bodily Injury and $100,000 Property Damage 26 | P a g e A. $100,000/$300,000 Bodily Injury and $50,000 Property Damage If an insured has Building coverage only, under the Building and Personal Property Coverage Form, which of the following items located within the building would not be covered? Select one: A. Carpeting B. Fire Extinguishers C. Money loss D. Refrigerator C. Money loss Smith, Inc. provides an automobile for an employee who has no automobile of his own. What additional coverages, of the following, could be added to protect the employee? Select one: A. Additional Personal Injury Protection B. Drive Other Car Endorsement C. Extended Non-Owner D. Miscellaneous Type Vehicles B. Drive Other Car Endorsement Which of the following is true regarding Farm Property Coverage? Select one: A. Farm Property Coverage covers growing crops B. Farm Property Coverage covers household personal property C. Farm Property Coverage does not cover barns and silos D. Farm Property Coverage does not cover animals B. Farm Property Coverage covers household personal property An insured is a restaurant operator who carries a Commercial General Liability policy. The insured's premises include a parking area used for valet parking of customer's cars. An employee of the insured, while parking a customer's automobile, hit another automobile in the parking lot. In addition to damage to the automobile, a customer was injured while standing beside the damaged automobile. Which of the following describes how the insurer will respond? Select one: A. Will pay nothing B. Will pay injuries to injured customer C. Will pay damage to customer's automobile D. Will pay for injury to customer and damage to customer's automobile B. Will pay injuries to injured customer Which of the following are not Unfair Methods of Competition or Unfair or Deceptive Acts? Select one: A. Twisting or Churning B. Giving to an insured, for advertising purposes, an article of merchandise having a value of $25 or less 27 | P a g e C. Misrepresentation or false advertising of benefits, advantages, conditions or terms of an insurance policy D. Refusal to insure solely because of race, color, creed, marital status, sex, or national origin B. Giving to an insured, for advertising purposes, an article of merchandise having a value of $25 or less Under the general provisions of the Crime Policy, which of the following valuations is incorrect? Select one: A. Other property is valued at the lesser of actual replacement cost or the cost to repair B. Money is valued at Face Value C. Securities are valued at the time the loss is discovered D. Other property is valued at Replacement Cost at the time the loss is discovered D. Other property is valued at Replacement Cost at the time the loss is discovered Which of the following cannot be included in a Commercial Package Policy? Select one: A. Workers' Compensation B. Commercial Inland Marine C. Boiler and Machinery D. Commercial Automobile A. Workers' Compensation The ABC Corp. purchased a new business during the term of its Commercial General Liability policy. A claim occurs for which the new business is liable but before the new business is added to the policy by endorsement. Which of the following statements are true? Select one: A. There is no coverage until the insured has advised the agent of the acquisition B. The loss will be covered by ABC's policy if the loss occurs within 90 days of purchase of the new business C. There is no coverage for a new business D. Coverage on the new business is limited to 50% of the limits of the General Liability Policy B. The loss will be covered by ABC's policy if the loss occurs within 90 days of purchase of the new business A Blanket Personal Articles Floater policy covering Stamps and coins for $100,000 is purchased. The insured sends stamps and two rare coins by First Class Mail, which are lost. The stamps and coins are valued $50,000. How much does the policy pay? Select one: A. $25,000 B. $1,000 C. $50,000 D. Nothing D. Nothing 30 | P a g e B. A percentage of Value per occurrence C. $100 per occurrence D. $250 per occurrence B. A percentage of Value per occurrence Rebating of a portion of an agent's commission is permitted: Select one: A. If granted only upon the insured's purchase of collateral insurance B. If a rebate schedule is prominently displayed in public view at the agent's place of business C. If insurance is provided by an insurer that allows its agents to rebate commission D. If based on age, sex, place of residence or occupation of the insured B. If a rebate schedule is prominently displayed in public view at the agent's place of business Joe Brown is awarded a contract to install an air conditioning system at the premises of a local bar owned by Jim Smith. During the time work is being done, a major fire occurs overnight and destroys $50,000 worth of the insured's (Joe Brown's) property located at Jim Smith's bar. This loss is best covered by a: Select one: A. Contract Bond B. Some form of Crime Insurance C. Commercial Property Building and Personal Property Form D. Installation Floater D. Installation Floater The insured, a contractor, built a condominium building. Six months after completion, the roof of the lobby fell in due to faulty plumbing. Pipes in the wall were not connected properly, causing the loss. The Completed Operations coverage will pay? Select one: A. The entire loss B. No coverage because the loss occurred after the contractor had completed the job and relinquished possession of the premises C. Replacement of ceiling damage but no coverage for debris removal D. Coverage for damage caused by defective construction, but no coverage for repair or replacement of pipes D. Coverage for damage caused by defective construction, but no coverage for repair or replacement of pipes A Business Auto Policy (BAP) covers all of the following except: Select one: A. A truck crane B. A private passenger automobile owned by corporation C. A semi-trailer D. A pickup truck 31 | P a g e A. A truck crane Self-insurance is: Select one: A. A plan administered by or for the Federal Government B. A plan covering fewer than 10 employees C. A plan established for the purpose of providing for employees' or their beneficiaries' accident, disability or death benefits D. A plan, which provides for continuing employees' regular compensation during illness or disability C. A plan established for the purpose of providing for employees' or their beneficiaries' accident, disability or death benefits Mr. Jones has a Homeowner's, HO3 policy. He left his golf clubs in his unlocked automobile. The automobile was parked at a shopping center when someone stole the golf clubs. Which of the following statements is true? Select one: A. The claim was not covered because the automobile was unlocked B. The loss, less the deductible, would be paid C. The claim was not covered because the property was off his premises D. The claim was not covered by the HO3 form because of a limitation in the policy B. The loss, less the deductible, would be paid Which of the following are exclusions under all of the Causes of Loss Forms (Basic, Broad, and Special) attached to the Commercial Property coverage? Select one: A. Seizure or destruction by governmental authority except destruction to prevent the spread of fire B. Loss from a power failure, which occurs away from the insured's premises C. Earth movement (other than sinkhole collapse), except losses resulting in Fire and Explosion D. All of these answers are correct D. All of these answers are correct What role does state regulation play in a legitimate ERISA plan? Select one: A. There is no regulation over ERISA plans B. All of these answers are correct C. State insurance regulation does still apply to an insurer that may be financially responsible for the payment of claims and any forms utilized in an insured ERISA plan D. The state regulates any ERISA plan in the same way it regulates any authorized insurer C. State insurance regulation does still apply to an insurer that may be financially responsible for the payment of claims and any forms utilized in an insured ERISA plan The insured has a "Guaranteed Renewable" major medical policy. This means: Select one: A. The carrier cannot refuse to renew, even if the premium is not paid 32 | P a g e B. The carrier must renew the policy to a certain age (usually 65); also the carrier reserves the right to increase premiums in certain underwriting classes C. The carrier cannot cancel coverage, but can require a new application each year D. The carrier must renew the policy under all circumstances B. The carrier must renew the policy to a certain age (usually 65); also the carrier reserves the right to increase premiums in certain underwriting classes Under a Personal Articles Floater a man and his wife had an individually scheduled ring covered for $75,000. They later purchased a ring for $150,000 and did not report the purchase to the insurer for two days. Before the purchase was reported, the $150,000 ring was stolen. How would the claim be settled? Select one: A. The Insurer would pay $10,000 (25% of the current coverage, maximum of $10,000) B. The Insurer would pay 25% of $150,000 C. The Insurer would pay $75,000 D. The Insurer would pay $150,000 A. The Insurer would pay $10,000 (25% of the current coverage, maximum of $10,000) Under which of the following conditions should the "Building Ordinance" optional coverages be considered? Select one: A. If the insured's building is not in accordance with current building and zoning laws B. Two of these answers are correct C. If the community has an ordinance, which requires demolition of the undamaged portions of the building after a partial loss D. None of these answers are correct B. Two of these answers are correct The Physicians, Surgeons and Dentist Professional Liability policy covers which of the following by endorsement? Select one: A. Nurses B. Veterinarians C. Blood Banks D. All of these answers are correct D. All of these answers are correct A bond which guarantees the performance of one appointed by the Court such as a Guardian, is known as a: Select one: A. Fiduciary Bond B. Public Official Bond C. License Bond D. Performance Bond 35 | P a g e C. Department of Financial Services D. Department of Labor and Employment Security C. Department of Financial Services The insured has a Homeowner's, HO3 policy. A tree was struck by lightning, hit a power line, and damaged the roof of the dwelling, swimming pool, and caused spoilage of food. Which items are covered? Select one: A. The food spoilage B. All of these answers are correct C. The pool D. The tree B. All of these answers are correct The Business Owners' Policy's (BOP) liability coverage differs from the Commercial General Liability policy in which of the following ways? Select one: A. When a BOP policy is issued to a drug store, Professional Liability (Druggists Liability) is automatically included B. If the insured does not have a Commercial Auto Policy, coverage for Auto Non- Ownership and Hired Car liability may be added by endorsement to the BOP C. All of these answers are correct D. Coverage of BOP is an "occurrence" basis only - no claims-made option C. All of these answers are correct The insured business purchased $25,000 Extortion coverage. Which of the following losses will the insurer pay? Select one: A. A customer is being held captive B. The president's son is being held captive C. An employee is being held captive D. All of these answers are correct D. All of these answers are correct A fire occurred in an apartment building resulting in $20,000 fire and $25,000 smoke damage to the building, and smoke damage to property of the tenants in a total amount of $25,000. On the way to the fire, one of the fire trucks collided with a parked automobile and damaged it to the extent of $5,000. The apartment building's owner has a Special Form policy in sufficient amount, and the tenants all have HO4 policies in sufficient amounts to cover losses. What amount of insurance will be paid by the apartment building owner's and tenant's policy (disregard any deductibles)? Select one: A. $25,000 smoke damage to property of the tenants B. $45,000 building, $25,000 to the tenant's property, and $5,000 collision damage by fire truck 36 | P a g e C. $45,000 building and $25,000 to the tenant's property D. $45,000 building for fire and smoke damage to the building C. $45,000 building and $25,000 to the tenant's property Which of the following are not grounds for compulsory refusal, suspension or revocation of the license of a general lines agent or customer representative? Select one: A. Demonstration of a lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license B. Cheating on an examination required for licensing C. A fine for a misdemeanor D. Willful overinsurance of any property or health insurance risk C. A fine for a misdemeanor Under the Trucker's Bodily Injury and Property Damage coverage form, which of the following is covered? Select one: A. A tractor cab with a semi-trailer attached jackknifed and the trailer caused damage B. The insured was operating their truck, which caused an accident C. All of these answers are correct D. The insured borrows a truck, which causes an at-fault accident C. All of these answers are correct c. Registered with the DBPR An individual does not intend to engage in real estate activity. However, he does plan to be an officer of a real estate brokerage corporation. Which status BEST describes this situation? a. Active sales associate license b. Active broker license c. Registered with the DBPR d. Inactive sales associate license d. active broker associate An individual who has fulfilled all of the academic and experience requirements for real estate brokers but who operates as a sales associate in the employ of a supervising broker is an a. active sales associate b. active broker c. inactive broker d. active broker associate c. 21 days Real estate license applicants who desire to review their most recent license exam MUST file a request to review within a. 10 days 37 | P a g e b. 14 days c. 21 days d. 30 days b. complete all required post-licensing and continuing education requirements A nonresident who holds a Florida real estate license MUST a. consent, once licensed, to having all documents notarized that become part of future real estate transactions in which the nonresident licensee is involved b. complete all required post-licensing and continuing education requirements c. become a Florida resident within the initial license period d. accept permanent revocation of the license should any violation of the real estate license law be upheld b. Yes, licensees must disclose all convictions to the FREC within 30 days Does a licensee who is convicted of a misdemeanor offense have a duty to report the conviction of the FREC? a. Yes, a licensee is required to disclose misdemeanor convictions with 60 days. b. Yes, licensees must disclose all convictions to the FREC within 30 days c. No, licensees are required to disclose felony convictions buy not misdemeanor convictions d. Yes, the licensee is required to disclose the misdemeanor convictions unless the licensee pleads nolo contender a. Mortgaging real property Which activity is NOT a real estate service? a. Mortgaging real property b. Advertising real property c. Renting real property d. Auctioning real property c. Mutual recognition applicants may be Florida residents or nonresidents Which statement is FALSE regarding mutual recognition agreements? a. the agreements are intended to recognize the education and experience that real estate licensees have acquired in other states or nations b. Mutual recognition applicants are required to take a examination on Florida real estate laws. c. Mutual recognition applicants may be Florida residents or nonresidents d. Mutual agreements allow Florida real estate licensees to have an equal opportunity for licensure in jurisdictions with which agreements are concluded b. The sales associate is in violation of Chapter 475, F.S. A sales associate sells real estate on the weekend for brokerage company A. She also works as a sales associate for brokerage company B. She is paid on a commission basis at both brokerage company A and brokerage company B. Which statement applies to this situation? a. As long as the broker for brokerage company A is also an owner-developer, this is an acceptable arrangement 40 | P a g e The Commission is obligated to report any criminal violation of Chapter 475, F.S., when knowledgeable of such violations, to the a. state's attorney having jurisdiction. b. secretary of the DBPR. c. local police. d. division of Professions. d. Sentence a licensee to six months' imprisonment The Commission is NOT empowered to impose which disciplinary action against a licensee? a. Suspend a license b. Revoke a license c. Impose an administrative fine d. Sentence a licensee to six months' imprisonment c. involuntary inactive. The licensee status that results when a license is not renewed at the end of the license period is referred to as a. canceled. b. delinquent. c. involuntary inactive. d. voluntary inactive. d. need not complete any continuing education or reactivation education for those five years An active broker accompanies her husband when he goes on active military duty in Ohio for five years. She is not active in real estate in Ohio. To obtain a current Florida broker's license within six months of her husband's discharge, she a. must first compete seven hours of continuing education for each inactive year. b. must first complete 14 hours of continuing education. c. must first complete 28 hours of reactivation education. d. need not complete any continuing education or reactivation education for those five years c. Complete a 28 hour Commission prescribed education course A sales associate's license expired 20 months ago. What MUST this sales associate do to again work as a real estate sales associate? a. Complete Course I and pass the end of course exam b. Complete 14 hours of continuing education c. Complete a 28 hour Commission prescribed education course d. Pass the state license exam c. placed in involuntary inactive status. The only active general partner in a real estate partnership did not account properly for his escrowed funds. His license was suspended. All of the licenses of the sales associates in that partnership are a. suspended. b. canceled. 41 | P a g e c. placed in involuntary inactive status. d. not affected. d. request multiple licenses. A broker wishes to be issued several broker licenses for business reason. She may a. only be issued one broker license. b. be issued one broker license only, but have several broker associate licenses. c. be issued a group license. d. request multiple licenses. c. Make determination of violations Which FREC power is part of the FREC's quasi-judicial responsibilities? a. Foster education of licensees b. Regulate professional practices c. Make determination of violations d. Establish fees b. The owner-developer must register with the DBPR but does not have to be licensed. An owner-developer employs five licensed sales associates and pays each sales associate a commission for sales of the owner-developer's lots. Which is TRUE of the owner-developer? a. The owner-developer must hold an active broker license. b. The owner-developer must register with the DBPR but does not have to be licensed. c. The owner- developer may only pay the sales associates a salary, not a commission. d. The owner-developer must apply for multiple licenses. b. placed in involuntary inactive status. A broker decides to relocate his real estate brokerage office. He notifies the Commission of the change in business address. He also informs the Commission of the names of three sales associates who are no longer associated with his brokerage. The sales associates' licenses with be a. suspended until they find new employment. b. placed in involuntary inactive status. c. null and void. d. canceled. d. There are 1/4" wide cracks in the foundation of the residence that have been filled in with concrete. Which information would be considered a material fact in a real estate transaction that MUST be disclosed to prospective buyers? a. A murder-suicide occurred in the residence. b. Two home invasions have occurred in the neighborhood. c. The homeowners were caregivers for a family member diagnosed with acquired immune deficiency syndrome. d. There are 1/4" wide cracks in the foundation of the residence that have been filled in with concrete. b. special agent. 42 | P a g e A real estate broker, when working in a single agent relationship, is typically authorized by a principal to act as a a. designated agent. b. special agent. c. general agent. d. nonagent. a. The broker must retain the contract and brokerage disclosures for five years. A broker is a single agent for a buyer who has entered into a written contract to purchase a new house from a builder. The builder is unable to complete construction by the required date. The builder and the buyer agree to rescind the contract. What must the broker do with the cancelled contract? a. The broker must retain the contract and brokerage disclosures for five years. b. The broker is not required to keep builder contracts. c. The broker is not required to keep the contract because is was rescinded. d. The broker must retain the contract and brokerage disclosures for two years. b. Explain to the buyer that the sales associate cannot show the property until the owner returns. The property owner of a listed property has instructed that broker no to show the property when the owner is out of town. A potential buyer asks the sales associate to show the listed property; however, the owner is out of town. How should the sales associate handle the situation? a. Show the buyer the property because the owner will not find out. b. Explain to the buyer that the sales associate cannot show the property until the owner returns. c. The sales associate can show the property anytime unless the owner put his instruction in writing. d. Show the buyer the property provided the buyer has been prequalified and is a serious buyer c. refuse and withdraw from the relationship. A sales associate has been told by her real estate broker to commit an unlawful act. The sales associate should a. indicate her concern buy comply with her employing broker. b. notify the FREC. c. refuse and withdraw from the relationship. d. comply because of the fiduciary obligation involved. d. give the seller the single agent notice. The seller informs the broker that he wants single agency representation. The broker MUST a. give the seller the no brokerage relationship notice. b. have the seller indicate in writing that the seller was informed of all the agency relationship options. c. have the seller sign the transition to single agent notice. d. give the seller the single agent notice. b. to the principal as does the broker, including those situations where the sales associate, for tax purposes, is an independent contractor. A sales associate or broker associate owes fiduciary duties a. only to the broker if working as an employee of the broker. 45 | P a g e c. No, she must use the title "broker associate" A broker associate is ordering business cards. May she put "broker" on the card instead of "broker associate" ? a. Yes, because she is broker-qualified. b. Yes, with the consent of her broker. c. No, she must use the title "broker associate" d. This is a matter of personal taste. d. The licensee should disclose to a buyer prospect the fact that he holds a real estate license at the first point of meaningful negotiation. A sales associate is selling her own property "by owner". Which statement is TRUE regarding real estate licensees selling property "by owner"? a. The licensee must disclose in the ad that she is a real estate licensee. b. The licensee must include the the name of her broker in the ad. c. The property must be listed with the sales associate's broker. d. The licensee should disclose to a buyer prospect the fact that he holds a real estate license at the first point of meaningful negotiation. a. deposits earnest money in a personal account. Commingling occurs when a broker a. deposits earnest money in a personal account. b. employs unlicensed persons to obtain listings and sales. c. attempts to channel persons of a particular race to a certain neighborhood. d. deposits up to $1,000 of personal funds in sales escrow account. c. 1000 N Gulf to Bay Blvd. Rebecca K Sammis, broker of Executive Homes Inc. , is ordering the sign for her new office. She is NOT required to have what information on her sign? a. Licensed Real Estate Broker b. Executive Homes Inc. c. 1000 N Gulf to Bay Blvd. d. Rebecca K. Sammis c. Thursday A sales associate receives a good-faith deposit on Monday morning. The broker is in the office that day, so he gives the deposit to his broker that same day. By the end of business on what day must the broker deposit the funds into the escrow account? a. Tuesday b. Wednesday c. Thursday d. Friday b. 15 business days 46 | P a g e If both buyer and seller claim the earnest money deposit in a broker's escrow account, how much time after the last claim received does the broker have to notify the FREC in writing? a. 5 calendar days b. 15 business days c. 7 calendar days d. 30 business days d. an insurance company located in Florida An escrow account may NOT be in a. a Florida-based title company having trust powers b. a credit union located in Florida c. a qualified Florida attorney's trust account d. an insurance company located in Florida b. Real estate licensees are prohibited from sharing part of their commission with the buyer or seller in a real estate contract unless the buyer or seller is a real estate licensee Which statement is FALSE regarding unearned fees? a. Payment of an unearned fee is also called a kickback. b. Real estate licensees are prohibited from sharing part of their commission with the buyer or seller in a real estate contract unless the buyer or seller is a real estate licensee c. Payment of an unearned fee must not violate RESPA. d. An owner of an apartment complex may pay a finder's fee of up to $50 to an unlicensed person who is tenant of the apartment complex for the referral of a prospect who decides to rent an apartment in the complex. c. 8:00 am to 9:00 pm State and federal telemarketing laws restrict telephone solicitation calls to what hours? a. 8:00 am to 5:00 pm b. 8:00 am to 6:00 pm c. 8:00 am to 9:00 pm d. 9:00 am to 8:00 pm a. Petition for review of appeal A dispute over escrowed funds arises between the buyer and seller. The broker notifies the FREC of the conflicting demands and requests that the Commission issue an escrow disbursement order; however, the FREC declines. Which alternative method CANNOT be used to resolve the matter? a. Petition for review of appeal b. Mediation c. Arbitration d. Litigation d. The broker must be a signatory on the escrow account. A broker of a large office hired a certified public accountant (CPA) and a full time bookkeeper to manage the escrow account. Which statement is TRUE regarding this situation? 47 | P a g e a. The broker is relieved of liability in the event there is an escrow violation because a certified CPA has been hired to manage the escrow account. b. Both the CPA and the bookkeeper must also hold a real estate license if they are going to write checks on the escrow account. c. The broker is required to personally prepare the monthly escrow account reconciliation statement. d. The broker must be a signatory on the escrow account. d. The broker is in violation of Chapter 475, F.S., because he has promised to compensate an unlicensed person for the referral of real estate business. A broker has an agreement with a local rental car agency. The agreement stipulates that the broker will pay a $25 referral fee to the rental car agency for each prospective buyer referred to the broker. Which applies? a. This is a legal kickback or rebate. b. This is legal, provided the broker informs each prospect of the agreement. c. Florida Real Estate Law prohibits all kickbacks and rabates. d. The broker is in violation of Chapter 475, F.S., because he has promised to compensate an unlicensed person for the referral of real estate business. b. A dispute over escrow funds related to a property inspection In which situation is the broker NOT exempt from the notice requirements regarding conflicting demands? a. A sale of HUD owned property that uses a HUD sale contract. b. A dispute over escrow funds related to a property inspection c. A buyer's cancellation of a residential condominium purchase agreement within the allowable time period for review d. A buyer's inability to secure financing for the purchase according to the terms of the contract b. He is entitled to a refund of $75 if requested either verbally or in writing withing 30 days A prospective tenant was recently transferred to Jacksonville. He was not familiar with the city so he purchased a rental list for $100 from a local real estate company. The prospective tenant referred to the list while looking for an apartment buy was unable to locate a suitable unit. He was requested a refund of his $100. Which applies? a. He is entitled to a refund of his $100 if requested in writing within 30 days. b. He is entitled to a refund of $75 if requested either verbally or in writing withing 30 days. c. He is not entitled to a refund because there was nothing wrong with the list. d. The broker is guilty of first degree misdemeanor. c. may place a lien against the seller's net proceeds from the sale. The owner of an office building has signed an exclusive listing agreement with a broker. The listing agreement contains information about the broker's lien rights in accordance with Part III of 475, F.S. If the owner sells the property without paying the broker a commission, the broker a. may record a lien on the office building within 30 days of closing. b. cannot record any lien without first obtaining a court judgment. 50 | P a g e c. They may not register as a partnership; however, they can incorporate and register as a corporation with the sales associate as vice president and the broker as president. d. A sales associate may not be a general partner in a real estate brokerage partnership. c. Real estate broker associate Which entity or individual may NOT be licensed under a trade name? a. Brokerage corporation b. Brokerage partnership c. Real estate broker associate d. Limited liability brokerage corporation b. carry out a single project. A joint venture usually is created to a. simplify appraisals. b. carry out a single project. c. quiet title d. take advantage of business opportunities. c. 18 business days On July 1, a broker received conflicting demands from a buyer and seller regarding a good faith deposit. Twelve business days later, the broker is unable to resolve the conflict between the parties and notifies the FREC. How many days does the broker have remaining the implement as settlement procedure? a. 10 business days b. 15 business days c. 18 business days d. 30 business days b. The Junk Fax Act regulates unsolicited advertisements to residential fax machines only. Which statement is FALSE regarding the Junk Fax Prevention Act concerning unsolicited advertisements to fax machines? a. All faxes must include the date and time the fax is sent. b. The Junk Fax Act regulates unsolicited advertisements to residential fax machines only. c. Faxes that contain an unsolicited advertisement must include an opt-out notice. d. The registered name of the company sending the fax must be included on all faxes. c. conduct listing presentation on behalf of the sales associate. A personal assistant MUST hold a real estate license to a. fill out and submit listing and change to an MLS. b. write ads for approval of the licensee and the supervising broker. c. conduct listing presentation on behalf of the sales associate. d. place signs on property. a. This action is referred to as "revoke without prejudice" 51 | P a g e An applicant was issued a sales associate's license by mistake. She has been informed that the license has been revoked. Which applies? a. This action is referred to as "revoke without prejudice" b. The applicant is not allowed to reapply for a sales associate's license for one year. c. The applicant has been disciplined for a violation of Chapter 475, F.S. d. Revocation means that the applicant may not be licensed in Florida for five years d. The person named in a complaint must be a real estate licensee. Which statement concerning a consumer complaint is FALSE? a. A complaint is considered to be legally sufficient if it contains facts that indicate a violation of license law has occurred. b. The DBPR will investigate an anonymous complaint that is in writing and legally sufficient. c. A person may file a complaint online. d. The person named in a complaint must be a real estate licensee. c. probable cause determination. If a legally sufficient complaint has been filed, investigated, and found valid, the nest step in the complaint process is a. an informal proceeding. b. a formal hearing c. probable cause determination. d. final order issuance. d. Second degree misdemeanor False advertising concerning real estate information incurs what type of penalty? a. Administrative penalty. b. Third-degree felony c. First-degree felony d. Second degree misdemeanor c. Misrepresentation A sales associate put a "for sale by owner" sign on his property with no intention of selling his home. The licensee used the sign as a way to reach prospective buyers for his listed properties. The FREC may find the sales associate guilty of which violation? a. Failure to account for and deliver b. Commingling c. Misrepresentation d. Conversion a. 30 A sales associate was issued a citation. How many days does the licensee have to either pay the citation or file an objection to the alleged violation? a. 30 b. 45 52 | P a g e c. 60 d. 90 b. Only the DBPR Secretary or a legally appointed representative may issue a final order of summary suspension. An administrative law judge discovered evidence that the current practices of a large property management brokerage firm were an immediate danger to the public welfare and to the economic welfare of its principals. The FREC chairperson convened a special session to conduct a hearing prior to a summary suspension order being issued. Upon conclusion of the hearing, the FREC issued a final order for summary suspension of the brokerage firm's license. Which statement is TRUE regarding this FREC action? a. The summary suspension final order was not accompanied by a formal suspension order. b. Only the DBPR Secretary or a legally appointed representative may issue a final order of summary suspension. c. A summary suspension order may not be issued until three days after a respondent has been notified of the pending action. d. A review of the summary suspension final order must be conducted by the DBPR before it can be valid and effective. c. The matter must be heard in a formal hearing before and administrative law judge. A sales associate disputes the facts and allegations in a formal complaint. Which statement is TRUE regarding this situation? a. The sales associate should request the matter be heard in an informal hearing. b. The sales associate should refuse to sign the election of rights in protest. c. The matter must be heard in a formal hearing before and administrative law judge. d. The sales associate should file an objection to the formal complaint and mail it to the DBPR Secretary. b. a notice of noncompliance A DBPR investigator is authorized, in cases that involve a first-time offense of a minor violation, to issue. a. a cease and desist order. b. a notice of noncompliance c. a letter of guidance d. an administrative fine d. A broker placed escrow funds in the operating account and used the funds to cover office expenses. Which action would likely result in a charge of conversion? a. The sales associate did not indicate on the contract for sale and purchase that the earnest money check was postdated. b. The broker deposited the rental security deposit checks into the operating account. c. The broker did not review the monthly reconciliation statements prepared by the accountant when a shortage occurred. d. A broker placed escrow funds in the operating account and used the funds to cover office expenses. a. will take no action against the broker. 55 | P a g e a. Civil Rights Act of 1866 b. Civil Rights Act of 1964 c. Fair Housing Act d. Equal Opportunity Act c. national origin A protected class under the Fair Housing Act is a. age b. occupation c. national origin d. marital status a. blockbusting The act of inducing homeowners to sell by stating that minority persons might move into a neighborhood is called a. blockbusting b. redlining c. steering d. ethnic zoning b. redlining The act of refusing to make mortgage loans or stating different mortgage terms or conditions based on racial groups is called a. blockbusting b. redlining c. steering d. overwriting c. steering The act of channeling buyers to a particular area either to maintain or to change the character of a neighborhood is called a. blockbusting b. redlining c. steering d. riparian right d. Property Report. Developers selling lots in a subdivision of 25 or more lots that is nationally promoted through advertising must provide potential buyers, prior to their signing a purchase contract, with a a. Statement of Record. b. Settlement Statement. c. copy of Regulation Z. d. Property Report. 56 | P a g e b. When the owner is out of town and has instructed the broker not to show the listed property when the owner is away on business Under which circumstance may a real estate licensee lawfully refuse to show a listed property to a member of a protected class who has specifically requested to see the property? a. Never b. When the owner is out of town and has instructed the broker not to show the listed property when the owner is away on business c. When the owner has expressed his intent in writing to exercise his exemption under the Fair Housing Act d. When the licensee believes that showing the property to the prospective buyer will be considered steering b. post a surety bond in the total amount of security deposits/advance rents or $50,000, whichever is less, and pay the tenant 5% per year simple interest. When a security deposit or advance rent is required by a landlord, the landlord may a. commingle such funds with personal funds and pay the tenant 75% of any interest earned. b. post a surety bond in the total amount of security deposits/advance rents or $50,000, whichever is less, and pay the tenant 5% per year simple interest. c. deposit such funds in a separate interest-bearing account, and pay the tenant at least 50% of the annualized average interest. d. place the funds in a broker's operating account a. The landlord failed to notify the tenant in writing of the bank name, address, and other information concerning the $1,200 security deposit. A tenant in a 50-unit apartment complex paid a $1,200 security deposit. The tenant received a receipt for the $1,200. Three weeks later, the landlord informed the tenant by phone the name of the bank where the tenant's security deposit was being held. Why has the landlord violated F.S. 83? a. The landlord failed to notify the tenant in writing of the bank name, address, and other information concerning the $1,200 security deposit. b. The landlord collected a security deposit exceeding legal limits. c. The landlord failed to notify the tenant within 15 days of the manner in which his funds were held. d. A security deposit of $1,200 is an "unconscionable agreement or provision" d. 30 If a tenant vacates rented premises at the end of a lease, how many days does the landlord have by law to notify the tenant if the landlord intends to claim a part of the tenant's security deposit? a. 3 b. 7 c. 15 d. 30 a. Consumer Financial Protection Bureau 57 | P a g e With which government agency do developers of subdivisions with 100 or more lots have to register? a. Consumer Financial Protection Bureau b. Department of Housing and Urban Development c. Department of Business and Professional Regulation d. Environmental Protection Agency a. civil courts Any legal remedy sought by a tenant or a landlord under the Florida Residential Landlord and Tenant Act must be through the a. civil courts b. criminal courts c. Division of Florida Land Sales, Condominiums and Mobile Homes. d. Division of Real Estate d. The sheriff must give the tenant 24 hours' notice to surrender the premises before physical eviction can begin. A landlord obtained a final judgement to evict a tenant. At 9:00 am on the following day, a writ of possession was delivered to the sheriff requesting immediate service of the writ. At 2:00 pm that same day, the sheriff was stopped from evicting the tenant by the tenant's attorney. What grounds did the tenant's attorney have for stopping the eviction? a. The tenant had not been served the writ of possession. b. The tenant must be given copies of the final judgment and writ of possession prior to eviction. c. The landlord had not given the tenant three days' notice that there was to be a physical eviction. d. The sheriff must give the tenant 24 hours' notice to surrender the premises before physical eviction can begin. d. The broker must deposit the advance rent and security deposits into an escrow account and prepare reconciliation statements for the account each month. If a brokerage office provides property management services to property owners, and collects and holds rental funds on behalf of the owner, how must the broker account for the advance rent and security deposits? a. If the broker posts a $50,000 surety bond, the broker may place the advance rent and security deposits in the broker's operating account b. The broker may place the advance rent and security deposits in the broker's operating account and keep a record of the amount of funds held on each tenant's behalf. c. The broker must pay the tenants 5% interest on the funds held for the benefit of each tenant. d. The broker must deposit the advance rent and security deposits into an escrow account and prepare reconciliation statements for the account each month. c. riparian rights The rights of an owner of land that abuts water and referred to as a. subsurface rights b. navigational rights 60 | P a g e Besides husband and wife ownership, the MOST frequently used form of co-ownership of property is a. tenancy by the entirety b. tenancy in common c. joint tenancy d. tenancy at will c. Method or degree of attachment One criterion used to determine if an item in real property is a fixture is whether the real property would be damaged by removing the item in question. What "test" for fixtures does this describe? a. Intent of the parties b. Relationship of the parties c. Method or degree of attachment d. Adaptation of the item d. 15 calendar days Developers of new cooperative units must give buyers a disclosure which informs buyers that they may cancel within how many days of signing the contract? a. 3 business days b. 10 business days c. 10 calendar days d. 15 calendar days b. in severalty Two buyers purchased a three story building and took title as legal joint tenants. One died testate. The surviving owner now owns the building. a. as a tenant by the entirety. b. in severalty c. in absolute ownership under the law of descent d. subject to the terms of the deceased owner's will. d. The grandson is a vested remainderman in a remainder estate. A father deeds a property to his daughter for her lifetime. After the daughter's death, in accordance with the deed, the property is to pass to the father's grandson. What interest, if any, does the grandson have in the property? a. The grandson has no interest in the property until the grandfather dies. b. The grandson has a life estate in the property. c. The grandson is a contingent remainder-man in a leasehold estate. d. The grandson is a vested remainderman in a remainder estate. b. an estate for years An interest in real property that exists for a designated period, created by a properly executed lease agreement, is a. a freehold estate b. an estate for years 61 | P a g e c. a tenancy at will d. a fee simple estate b. right to use The type of time share ownership that the usage rights revert back to the developer-seller is a. interval ownership b. right to use c. ownership in severalty d. life estate d. an estate in reversion A mother deeded a beachfront villa to her son who suffered from a terminal illness. The deed specified that the property was to return to the mother or her heirs when the son died. The estate owned by the mother, or her heirs is a. a conventional life estate b. a fee simple estate c. an estate for years d. an estate in reversion b. Yes, they must be licensed as real estate sales associates because part of the compensation is based on real estate sales production Salaried employees sell time-share units for a large owner-developer in Ft. Myers, Florida. Each Christmas, the employees receive a year-end bonus based on sales production for the year. Must the employees be licensed as real estate sales associates? a. No, the employees are exempt from a real estate license because they work for an owner-developer b. Yes, they must be licensed as real estate sales associates because part of the compensation is based on real estate sales production c. No, they are exempt from a real estate license because the employees must hold a time-share license. d. Yes, they must be licensed as real estate sales associates because they perform services of real estate for an owner-developer. a. Bylaws of the association In which document will a condominium owner find the rules and regulations? a. Bylaws of the association b. Declaration of condominium c. Frequently Asked Questions (FAQ) and Answers d. Master deed b. 3 business days What is the cancellation period for the purchase of a three year old residential condominium unit from a private party? a. 3 calendar days b. 3 business days 62 | P a g e c. 15 calendar days d. 15 business days b. tenancy at sufferance The estate in real property with the least bundle of rights is the a. tenancy at will b. tenancy at sufferance c. fee simple estate d. estate for years d. Credit card bills Homeowners are protected from forced sale of their homesteaded property for nonpayment of which type of debt? a. special assessment liens b. Vendors' lien c. Home equity line of credit d. Credit card bills c. Inheritance Which right is NOT included in the bundle of rights? a. Possession b. Control c. Inheritance d. Enjoyment c. common elements Lucy lives in Tall Towers Condominiums. She enjoys swimming in the condominium's pool each morning before going to work. The pool is referred to as a. chattel b. proprietary rights c. common elements d. community property c. a tenancy at will If I lease my lake front property to you for an indefinite period of time, your interest in real property would be a. an estate for years b. a tenancy by the entireties c. a tenancy at will d. a tenancy at sufferance a. recording a declaration in the public records A condominium is created by a. recording a declaration in the public records 65 | P a g e Each of these is a method of acquiring legal title to real property EXCEPT a. descent b. quitclaim deed c. eminent domain d. novation d. grantee- seller The terms in each pair are synonymous EXPECT a. vendee- purchaser b. mortgagee- lender c. lessor- landlord d. grantee- seller d. The policy is issued for an amount equal to the unpaid balance of the mortgage loan Which statement does NOT describe an owner's title insurance policy? a. The premium is paid once only- at time of issue. b. The policy may not be transferred from one owner to another owner. c. Damages are paid for any defect in the title not listed as an exception d. The policy is issued for an amount equal to the unpaid balance of the mortgage loan a. The couple An owner sold her home to a married couple and gave them a warranty feed. The couple moved into the home but did not record the deed. Two days later, the seller died and her heirs in another state sold the property without any knowledge of the previous sale. The heirs conveyed title to a single man, who did record the deed. Who owns the property? a. The couple b. The single man c. The deceased owner's heirs d. The couple and the single man as joint tenants b. under seal The essential elements of a deed no NOT include a. consideration b. under seal c. witnessing d. delivery a. granting clause The clause in a deed that contains the words "bargains and sells" or similar words is the a. granting clause b. habendum clause c. encumbrances clause d. seisin clause 66 | P a g e c. habendum clause The clause in a deed that specifies the type of estate being transferred is the a. premises clause b. seisin clause c. habendum clause d. granting clause c. No, only attorneys may draft leases for others Can a property owner give a sales associate power of attorney to draft lease? a. Only brokers may act as a power of attorney b. Yes, provided the power of attorney authorizes a licensee to perform such an act. c. No, only attorneys may draft leases for others d. Yes, with the broker's consent a. Seisin Buyer and seller are discussing the type of deed that is to be conveyed. The buyers are requiring a guarantee that the seller owns the property and has a legal right to sell. This guarantee is part of which clause in the deed? a. Seisin b. Habendum c. Premises d. Encumbrance b. quitclaim deed A type of deed that contains the words "remise and release" or similar words is the a. special warranty deed b. quitclaim deed c. bargain and sale deed d. personal representative's deed. b. Deed restrictions Private restriction on ownership of real property included which restriction? a. Police power b. Deed restrictions c. Eminent domain d. Escheat a. further assurance. The covenant in a general warranty deed that promises that the grantor will obtain and deliver any legal instrument that might be required to make the title good in the future is the covenant of a. further assurance. b. quiet enjoyment. 67 | P a g e c. warranty forever. d. habendum et tinendum c. Personal representative's deed A buyer is purchasing a property that is part of a decedent's estate. Which type of deed will the buyer receive? a. Quitclaim deed b. Bargain and sale deed c. Personal representative's deed d. Committee's deed b. Escheat- Testate Which pair does NOT belong together? a. Fee simple- Absolute b. Escheat- Testate c. Tenancy in common- No right of survivorship d. Joint tenancy- Undivided interest b. any compensation was paid to an affected owner. The key difference between police power and eminent domain is whether a. the action was by a government agency. b. any compensation was paid to an affected owner. c. the owner's use was affected d. the improvements are to be destroyed b. eminent domain Against her will, an owner's farm was taken in order that a municipal water supply could be built. The legal principle justifying this action is called a. police power b. eminent domain c. escheat to the state d. estoppel b. Appurtenance A specific garage parking space conveys with the title transfer of a condominium. The parking space is what type of property? a. Common element b. Appurtenance c. Deed restriction d. Devise a. escheat A person dies intestate without heirs. The principle of law applying to disposition of the person's real property is 70 | P a g e Which government restriction on ownership represents the broadest power of government to limit the rights of property owners? a. Eminent domain b. Police power c. Escheat d. Government liens a. All liens are encumbrances Which statement is TRUE? a. All liens are encumbrances b. All encumbrances are liens c. Specific liens affect all personal property of the debtor d. A property tax lien is a type of general lien c. Special warranty deed Lenders will often use what type of deed to convey property to a new buyer that has been taken back through a foreclosure proceeding? a. Quitclaim deed b. General warranty deed c. Special warranty deed d. Bargain and sale deed b. Income tax Which tax does NOT create a superior lien? a. Federal estate tax b. Income tax c. Property tax d. Special assessment tax d. The entire leasehold is transferred Which statement is TRUE with respect to the assignment of a lease? a. The original lessee is not liable for the payment of the rent. b. If is the same as a sublease. c. The original lessee would still retain a right to use the property for a limited time. d. The entire leasehold is transferred b. a portion of the leased rights and interests. A sublease will result in a lease of a. the entire premises by a new tenant b. a portion of the leased rights and interests. c. the entire premises located below ground level d. all of the leased premises for the full duration of the remainder of the original lease d. Income tax lien 71 | P a g e Which lien is NOT a specific lien? a. Mortgage lien b. Construction lien c. Property tax lien d. Income tax lien c. Eminent domain A railroad company may use which method to acquire land? a. Escheat b. Police power c. Eminent domain d. Auction d. Mortgage Which encumbrance constitutes a lien on real property? a. Easement b. Encroachment c. Restriction d. Mortgage a. the order in which other liens are filed or recorded Normally, the priority of a mortgage lien is determined by a. the order in which other liens are filed or recorded b. the order in which the cause of action arose c. the size of the claim d. a court of law b. mortgage that was recorded first Unless a written agreement exists to change the usual order of priority, the mortgage with the highest priority is the a. construction loan mortgage b. mortgage that was recorded first c. mortgage for the greatest amount d. mortgage containing the subordination agreement. b. specific involuntary lien A real property tax is an example of a a. specific voluntary lien b. specific involuntary lien c. general voluntary lien d. general involuntary lien c. attachment 72 | P a g e A lawsuit against a farmer is pending. The court rules that her vegetable farm be seized and held as security in case of a judgment against the farmer. This legal action is called a. lis pendens b. adverse possession. c. attachment d. assignment b. vendor's lien A type of lien that results when a seller accepts a mortgage as part of the purchase price for a home is a a. general lien b. vendor's lien c. construction lien d. home equity lien b. Equitable title Which term describes the beneficial interest in real estate that implies that an individual will receive legal title at a future date? a. Legal title b. Equitable title c. Cloud on title d. Marketable title b. statute of frauds A buyer and a seller make an oral agreement regarding the sale of the seller's property. This contract normally would be unenforceable in a court of law based on the a. laws of agency b. statute of frauds c. statute of limitations d. real estate licensing laws d. recordation Essential elements of a real estate contract include all EXCEPT a. consideration b. offer and acceptance c. in writing and signed d. recordation b. an offer and acceptance To be valid, a real estate sale contract MUST contain a. an earnest money deposit b. an offer and acceptance c. evidence of two witnesses' signatures d. a notary's seal 75 | P a g e c. counteroffered d. breached the contract. b. The broker may be charged with fraudulent and dishonest dealing by trick, scheme, or device. A property owner and a broker decide to sell $20 lottery tickets to prospective customers for a chance to win the owner's property. They announce that if 1,000 tickets are sold, the winning ticket will get the property free and clear. However, if less than 1,000 tickets are sold, the winning ticket will get the property for a price of $200,000 minus the value of the tickets sold. Which statement is TRUE? a. The owner and broker have devised an innovative marketing plan. b. The broker may be charged with fraudulent and dishonest dealing by trick, scheme, or device. c. The broker must file the lottery plan with the Florida state lottery. d. The broker may be charged with a violation of the statute of frauds. c. actions are required by dates set forth in the agreement The phrase "time is of the essence" means a. the buyer wants to take possession quickly. b. the seller wants to close quickly. c. actions are required by dates set forth in the agreement d. a specified period of time must lapse before the contract can legally be concluded. a. specific performance A seller and buyer enter into a real estate contract. The seller defaults. The buyer sues the seller to go through with the contract. This action is known as a suit for a. specific performance b. damages. c. unliquidated damages d. declaratory judgment d. If required to effect a sale, the commission is earned only if the buyer closes on the property. Which statement is TRUE regarding listing agreements? a. The sales associate earns the commission. b. An exclusive-agency listing provides for the broker to earn a commission no matter who is the procuring cause. c. Procuring cause disputes between licensees are typically settled in small claims court. d. If required to effect a sale, the commission is earned only if the buyer closes on the property. b. limitations The statute that requires an injured party to bring an action within a specific period of time after the injury is the statute of a. obligations b. limitations c. frauds d. specific enforcement 76 | P a g e d. Power of attorney Which written instrument authorizes a person to act for and on behalf of another person? a. Attorney in fact b. Lis pendens c. Option d. Power of attorney a. an attorney in fact If a broker is given the right to sign a real estate sale contract that will be binding on the seller, the broker is a. an attorney in fact b. given general power of attorney. c. a special agent trustee d. the attorney of record. c. Lease A real estate licensee is NOT authorized to draw which contract? a. Option b. Buyer-brokerage c. Lease d. Sale and purchase d. a net listing. A listing to sell property and obtain a specified amount for the owner-principal is called a. an open listing. b. an exclusive right to sell listing. c. an implied listing d. a net listing. a. Open The term procuring cause is most significant in which type of listing? a. Open b. Exclusive-agency c. Exclusive right to sell d. Net c. If the seller does not clear the violation before closing, it becomes the buyer's responsibility to clear the violation. If a property has been cited as being in violation of building code, the seller must provide a disclosure to the buyer. Which statement is TRUE regarding the disclosure? a. The seller must correct the violation before closing or credit the buyer with the cost to correct b. The seller must deposit with the closing agent an amount equal to the cost to clear the violation. c. If the seller does not clear the violation before closing, it becomes the buyer's responsibility to clear 77 | P a g e the violation. d. The seller must notify the code enforcement agency of the new owner's name and address within 30 days after closing. c. has no obligation to purchase the property. In a valid option contract to purchase real estate, the optionee a. is the prospective seller of the property. b. must purchase the property within the option period. c. has no obligation to purchase the property. d. is limited to a refund of the option consideration if the option is exercised. c. a bilateral contract Any contract that obligates both parties to perform in accordance with the terms of the contract is a. an unenforceable contract b. a unilateral contract c. a bilateral contract d. a voidable contract. b. There is a valid contract between the buyer and seller. A broker mailed a signed purchase offer to a property owner. Instead of singing the purchase offer contract, the owner sent the broker a telegram accepting the offer. Which is correct? a. There has been a valid offer but not a legal acceptance. b. There is a valid contract between the buyer and seller. c. There has been a valid offer and a telegraphic acceptance but not an enforceable contract. d. To be enforceable, a contract must contain the offer and acceptance within the same instrument. d. a voidable contract A 17 year old high school student has entered into a contract to purchase an adult's car. This is a. a void contract b. an illegal contract c. an option contract d. a voidable contract b. Express contract A seller and a buyer negotiated the sale and purchase of the seller's condominium over a two week period. Finally, they reached a meeting of the minds regarding the purchase price and terms of the sale. What type of contract exists at this point? a. Implied contract b. Express contract c. Executed contract d. Option contract c. within 24 hours of execution