FLORIDA REAL ESTATE EXAM AND PRACTICE EXAM TEST BANK 2024 |400 ACCURATE QUESTIONS, Exams of Real Estate Management

Download FLORIDA REAL ESTATE EXAM AND PRACTICE EXAM TEST BANK 2024 |400 ACCURATE QUESTIONS and more Exams Real Estate Management in PDF only on Docsity! FLORIDA REAL ESTATE EXAM AND PRACTICE EXAM TEST BANK 2024 |400 ACCURATE QUESTIONS WITH DETAILED ANSWERS | EXPERT VERIFIED FOR GUARANTEED PASS | GRADED A LATEST UPDATE 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 in entirety B. in severalty C. in absolute ownership under the law of descent D. subject to the terms of the deceased owner's will (B) A mortgage clause (in title theory states) that provides for the transfer of title to real property to the borrower once the mortgage debt has been repaid is the A. hold harmless clause. B. novation. C. defeasance clause. D. exculpatory clause (C) An easement created by court order to allow the right of ingress and egress over another person's property to landlocked property is which type of easement? A. Easement by prescription B. Easement by necessity C. Easement by condemnation D. Easement by adverse possession (B) 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. quiet enjoyment. B. habendum et tinendum. C. warranty forever. D. further assurance (D) 13. How is the Real Estate Recovery Fund funded? (a) Property tax dollars (b) The Florida State Treasury (c) State intangible taxes (d) Fees and fines paid by real estate licensees (D) Two cousins would like to purchase and take a title to an investment property. Gary will own 3/4 share and Larry will have 1/4 share. To do so, they must take title under which one of the following methods? a) Tenants by the entirety b) Severalty c) Joint tenants d) tenants is common (D) Three unrelated owner took title to a warehouse building as joint tenants. One of the owners died testate. The remaining two owners now own the building: a) Under the state's laws of descent b) As joint tenants c) In severalty d) Subject to the term of the deceased person's will (B) The duty of confidentiality applies only to which agency representation? a) single agent b) Dual agent c) transaction broker d) no brokerage relationship (A) Which of the following types of property ownership (title) is limited to husbands and wives? a) Joint tenancy b) Tenancy by the entirety c) Tenancy at will d) Tenancy in common (B) 3) easement in gross .4) easement by necessity. (2) You sell Jessica a current up-to-date rental list and provide all the proper disclosures and paperwork. Jessica contacts you 15 days later and asks for a refund of the amount she paid for the list because she could not find a rental on the list. She is entitled to how much of a refund? 1) 100% 2) 75% 3) 25% 4) 0% 75% A Landlord has how many days to return a tenants security deposit if not making a claim on the deposit? 1) 10 2) 15 3) 30 4) 45 (2) Which brokerage relationship duty applies to all three types of brokerage relationships? 1) Accounting for all funds 2) Loyalty 3) Using skill, care, and diligence 4) Confidentiality (1) A deal failed to close because the buyer was unable to secure financing. The broker received conflicting demands regarding the earnest money. How long does the broker have to notify FREC? 1) 10 days 2) 15 days 3) 20 days 4) 30 days (2) Bruce has a survey that is a commercially-zoned parcel. It is 101 feet on the front, 219 feet on the north side, 130 feet on the back and 180 feet on the south side. It is not in a recorded subdivision. Which survey method would be likely used for the parcel? 1) lot and block 2) rectangular 3) government survey 4) metes and bounds (4) Which statement is unique to the transaction broker relationship? 1) The customer is not responsible for the acts of the licensee. 2) The agent is obligated to a duty of obedience. 3) The licensee must disclose all known facts that materially affect the value of the real property. 4) The buyer or seller must give written consent to enter into the brokerage relationship. (1) In general business dealings, which type of agent is authorized by the principal to perform acts related to a certain business or to the employment of a particular nature? 1) General 2) Special 3) Universal 4) Subagent What is homestead protection? 1) The tax deduction everyone gets against property taxes on their primary residence 2) The estimated value that an asset will have at the end of its useful life 3) Net cash remaining to investor after sale of investment property 4) A status provided for a homeowner's principal residence which protects the home against judgment up to a specific amount. (4) No later than ___ business days must the broker request a written verification of receipt of the deposit a) 10 b) 15 c) 20 d) 30 (A) Within how many business days must the broker provide a copy of verification of receipt of the deposit to the seller/seller's broker? a) 10 b) 15 c) 20 d) 30 (A) Can Death make a contract void ? No, Death of a party voids certain contracts but not all types Within how many business days must the broker provide a copy of verification of receipt of the deposit to the seller/seller's broker? a) 10 b) 15 c) 20 d) 30 (A) If a broker receives conflicting demands on escrowed property, the broker must notify the FREC, in writing, within how many business days? a) 10 b) 15 c) 20 d) 30 (B) Which Florida Statue governs the DBPR and the professions under the DBPR? A. Chapter 120 B. Chapter 455 C. Chapter 475 D. Chapter 492 (B) A type of concurrent ownership that provides an undivided interest in the property with no right of survivorship: (D) 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 (D) Which condo document is required to be given to prospective buyers only for new residential construction of more than 20 units? A. FAQs B. Bylaws C. Articles of incorporation D. Prospectus (D) A concise summary of all income and expenses of a business for a stated period of time is the A. balance sheet B. income statement C. cash flow statement D. asset sheet (B) 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 in entirety B. in severalty C. in absolute ownership under the law of descent D. subject to the terms of the deceased owner's will (B) A mortgage clause (in title theory states) that provides for the transfer of title to real property to the borrower once the mortgage debt has been repaid is the A. hold harmless clause. B. novation. C. defeasance clause. D. exculpatory clause (C) An easement created by court order to allow the right of ingress and egress over another person's property to landlocked property is which type of easement? A. Easement by prescription B. Easement by necessity C. Easement by condemnation D. Easement by adverse possession (B) 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. quiet enjoyment. B. habendum et tinendum. C. warranty forever. D. further assurance (D) 13. How is the Real Estate Recovery Fund funded? (a) Property tax dollars (b) The Florida State Treasury (c) State intangible taxes (d) Fees and fines paid by real estate licensees (D) Two cousins would like to purchase and take a title to an investment property. Gary will own 3/4 share and Larry will have 1/4 share. To do so, they must take title under which one of the following methods? a) Tenants by the entirety b) Severalty c) Joint tenants d) tenants is common (D) Three unrelated owner took title to a warehouse building as joint tenants. One of the owners died testate. The remaining two owners now own the building: a) Under the state's laws of descent b) As joint tenants c) In severalty d) Subject to the term of the deceased person's will (B) The duty of confidentiality applies only to which agency representation? a) single agent b) Dual agent c) transaction broker d) no brokerage relationship (A) Which of the following types of property ownership (title) is limited to husbands and wives? a) Joint tenancy b) Tenancy by the entirety c) Tenancy at will d) Tenancy in common (B) Easement in gross: Right to use land for a specific, limited purpose unrelated to any adjacent parcel Easement by Prescription Use another's property for a period of 20 years 17. A prospective tenant pays a licensee for a rental information list. What percentage of the fee paid may the prospective tenant receive if the licensee provides inaccurate information? C. Frequently asked questions (FAQ) and answers D. Master deed (A) The rights of an owner of land that abuts flowing water are referred to as A. subsurface rights B. littoral rights C. riparian rights D. reliction rights (C) The MOST comprehensive interest in real property that an individual may possess is a. an estate for years. b. a life estate c. a remainder estate. d. a fee simple estate. (D) The bundle of legal rights associated with real property does NOT include a. control b. possession. c. disposition .d. utility. (D) Heather has been using a roadway at the back of the 22 acres Pam owns. She has been driving down the roadway almost every day without permission for over 20 years. This is called what? 1) easement appurtenant. 2) easement by prescription. 3) easement in gross .4) easement by necessity. (2) You sell Jessica a current up-to-date rental list and provide all the proper disclosures and paperwork. Jessica contacts you 15 days later and asks for a refund of the amount she paid for the list because she could not find a rental on the list. She is entitled to how much of a refund? 1) 100% 2) 75% 3) 25% 4) 0% 75% A Landlord has how many days to return a tenants security deposit if not making a claim on the deposit? 1) 10 2) 15 3) 30 4) 45 (2) Which brokerage relationship duty applies to all three types of brokerage relationships? 1) Accounting for all funds 2) Loyalty 3) Using skill, care, and diligence 4) Confidentiality (1) A deal failed to close because the buyer was unable to secure financing. The broker received conflicting demands regarding the earnest money. How long does the broker have to notify FREC? 1) 10 days 2) 15 days 3) 20 days 4) 30 days (2) Bruce has a survey that is a commercially-zoned parcel. It is 101 feet on the front, 219 feet on the north side, 130 feet on the back and 180 feet on the south side. It is not in a recorded subdivision. Which survey method would be likely used for the parcel? 1) lot and block 2) rectangular 3) government survey 4) metes and bounds (4) Which statement is unique to the transaction broker relationship? 1) The customer is not responsible for the acts of the licensee. 2) The agent is obligated to a duty of obedience. 3) The licensee must disclose all known facts that materially affect the value of the real property. 4) The buyer or seller must give written consent to enter into the brokerage relationship. (1) In general business dealings, which type of agent is authorized by the principal to perform acts related to a certain business or to the employment of a particular nature? 1) General 2) Special 3) Universal 4) Subagent 1) General agent What is homestead protection? 1) The tax deduction everyone gets against property taxes on their primary residence 2) The estimated value that an asset will have at the end of its useful life 3) Net cash remaining to investor after sale of investment property 4) A status provided for a homeowner's principal residence which protects the home against judgment up to a specific amount. (4) No later than ___ business days must the broker request a written verification of receipt of the deposit a) 10 b) 15 c) 20 d) 30 (A) Within how many business days must the broker provide a copy of verification of receipt of the deposit to the seller/seller's broker? a) 10 b) 15 c) 20 d) 30 (A) Can Death make a contract void ? b) every prospective buyer and prospective seller in all cases c) a for-sale-by-owner (FSBO) seller before showing the FSBO home to a buyer customer of ABC Realty d) every prospective buyer who walks through an open house listed by ABC Realty (C) Sales associates who receive a binder deposit must deliver it to their broker no later than the a) end of the next business day b) the day it was received c) end of the second day d) end of the third day (A) The broker must implement one of the four settlement procedures when receiving conflicting demands within ___ days. a) 10 b) 15 c) 20 d) 30 (D) An individual does not intend to engage in real estate activity. However he does intend to be an officer of a real estate brokerage. Which status BEST describes this situation? A. Active sales associate license B. Active broker license C. Registered with the DBPR D. Inactive sales associate (C) 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 an examination on Florida real estate .C. Mutual recognition applicants may be Florida residents or nonresidents. D. Mutual agreements allow Florida real estate licensees to have equal opportunity for licensure in jurisdictions with which agreements are concluded. (C) A license applicant has completed the 63-hour sales associate prelicense course. Within what period of time after being issued a course completion slip for the prelicense course MUST the applicant pass the state license? A. Indefinitely B. Two years C. One year D. Six months (B) The Commission is obligated to report any criminal violations of Chapter 475, 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 (A) A sales associate's license expired 20 months ago. What MUST he 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) 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 (B) The broker and the seller agree to 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 (D) State and federal telemarketing law restricts telephone solicitation calls to what hours? A. 8AM - 5PM B. 8AM - 6PM C. 8AM - 9PM D. 9AM - 8PM (C) 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. FL Real Estate Law prohibits all kickbacks and rebates D. The broker is in violation of Chapter 475 because he has promised to compensate an unlicensed person for the referral of real estate business (D) A tree growing near the corner of a lot is ordinarily considered to be A. real property B. personal property C. fixture D. chattel (A) An estate or interest in real property that can be measured by the lifetime of an individual is a type of: A. fee simple estate B. estate by the entireties C. freehold estate D. estate for years (C) A woman and her sister, who are both married, want to go into business together and are purchasing a parcel on which to build a restaurant. To protect each of their families, how should they take title? 45 A cooperative is a(n) _____. a. limited partnership b. LLC c. not-for-profit corporationd. sole proprietorship (c) A cooperative is a joint venture with its shareholders, formed for their benefit and governed by them. It's a not-for-profit corporation. Which method best describes the foreclosure process in Florida? Judicial The continuing education requirement consists of ______ hours 14 Hours The agreement the state of Florida has w/ some other states that recognises the similarity in education and experience required of licencees is called: a. reciprocity b. mutual recognition c. cooperative licensure d. intrastate licensing Mutual Recognition The Commission's ability to impose disciplinary actions against licensees is known as ______ _________ power quasi - judicial The rule-making authority of the FREC is called ______ _________ power quasi - legislative Which information supplied by an applicant is Public Record? a. financial Information b. test scores c. name and address d. medical information (C) The maximum amount that can be paid from the Real Estate Recovery Fund based on the actions of a licensee is ___________ $150,000 Roberta receives $5,000 a month from court ordered alimony. However, she does not have other income. Which of the following laws forces the lender to count the alimony as income for determining whether Roberta qualifies for a mortgage? Equal Credit Opportunity Act The start of a Land Survey Principle median 1. What is the purpose of the FREC disciplinary guidelines? (a) To extend the meaning of the law (b) To specify and implement the law (c) To give new meaning to the law (d) To give licensees notice of the range of penalties that normally will be imposed for violation of a law or rule (d) To give licensees notice of the range of penalties that normally will be imposed for violation of a law or rule 2. Who reports findings of fact to the Commission at the conclusion of an administrative hearing? (a) An attorney (b) The Division of Real Estate investigator (c) The Division of Real Estate prosecutors (d) The administrative law judge (d) The administrative law judge 3. What happens if a respondent fails to answer an administrative complaint? (a) The defendant will be issued a subpoena. (b) The Commission will dismiss charges against the licensee. (c) The Commission will proceed with the hearing. (d) The Department of Business and Professional Regulation will send investigators to arrest the licensee. (c) The Commission will proceed with the hearing. 4. The range of penalties that may be imposed on a licensee by the Commission for violation of law or rules includes which of the following? (a) Denial, reprimand, fine, probation, suspension and revocation (b) Imprisonment only (c) A fine and imprisonment only (d) A fine, reprimand, denial, suspension, revocation and imprisonment (a) Denial, reprimand, fine, probation, suspension and revocation 5. An appeal of a Commission final order is filed with which of the following? (a) Florida Supreme Court (b) District Court of Appeals (c) County court (d) Department of Administrative Hearings b) District Court of Appeals 6. Which of the following statements best describes the Probable Cause Panel? (a) The Probable Cause Panel is composed of three Florida Real Estate Commission members, no more than one of which may be a lay member. (b) The Probable Cause Panel is an exercise of the quasi-judicial powers of the Florida Real Estate Commission. (c) The Probable Cause Panel determines guilt or innocence and submits a recommended order to the Florida Real Estate Commission. (d) The Probable Cause Panel has 30 days from receipt of a complete report to recommend dismissal or issuance of a formal complaint. (d) The Probable Cause Panel has 30 days from receipt of a complete report to recommend dismissal or issuance of a formal complaint. 7. What is the charge for anyone found guilty of using false or misleading advertising? (a) Third-degree misdemeanor (b) Second-degree misdemeanor (c) First-degree misdemeanor (d) Third-degree felony (b) Second-degree misdemeanor What is example of a First Degree Misdemeanors and possible penalty? Violation of rental listing, information and contracts Fine up to $1k, imprisonment for up to one year. What is example of a Third Degree Felonies and possible penalty? Acting as a broker or sales associate with no valid license, false information on license, or stealing exam. 8. What is the maximum amount of money that can be paid from the Real Estate Recovery Fund to three persons who suffered monetary loss as the result of a fraudulent act committed by a real estate licensee and have been awarded a single judgment? (a) $150,000 (b) $50,000 (c) $25,000 (d) $10,000 (b) Appear (c) File an appeal (d) Bring an attorney (b) Appear 15. Which activity would be classified as a first-degree misdemeanor under F.S. 475? (a) Placing false or misleading advertising (b) Violation of rental information rules (c) Submitting false information in an application (d) An unlicensed person operating as a broker (b) Violation of rental information rules 16. What is the maximum penalty that may be imposed upon an individual who is found guilty of unlicensed real estate activity? (a) $500 fine and imprisonment for up to 90 days (b) $1,000 fine and imprisonment for up to 1 year. (c) $5,000 fine and imprisonment for up to 5 years. (d) $10,000 fine and imprisonment for up to 10 years. c) $5,000 fine and imprisonment for up to 5 years. Third degree Felonies How many and what are types of License Law Violations? 3: 1) Criminal penalties 2) civil 3)administrative penalties 17. George received a final order from the Florida Real Estate Commission, ordering his license revoked. If George wishes to appeal this order, what would be his next step? (a) Seek an injunction from the Florida Real Estate Commission. (b) Seek a writ of mandamus from the Circuit Court. (c) Request an injunction from the Department of Business and Professional Regulation. (d) File an appeal with the District Court of Appeal. (d) File an appeal with the District Court of Appeal. 18. A licensee defrauded two customers in a single real estate transaction. The court rendered a single judgment against the licensee in the amount of $65,000. The licensee could not satisfy any portion of the judgment from personal assets. What amount will the former customers be able to recover from the Real Estate Recovery Fund? (a) $50,000 (b) $65,000 (c) $85,000 (d) $150,000 (a) $50,000 is up to $50k only on a single judgement 19. Which of the following best describes a DBPR investigator's roles and responsibilities? (a) The investigator can issue subpoenas and final orders. (b) The investigator will make a recommendation as to the penalty that should be imposed against a licensee. (c) Upon conclusion of the investigation, the investigator files an investigative report. (d) The investigator offers his or her opinions based upon information obtained during the course of the investigation. (c) Upon conclusion of the investigation, the investigator files an investigative report. They can NOT subpoena, recommend or offer their opinion. ONLY file their report. 20. What term is used to refer to the individual who files a complaint? (a) Accused (b) Defendant (c) Complainant (d) Respondent (c) Complainant or formal complaint 21. How would a licensee attempt to compel testimony from a witness in a formal hearing? (a) Ask the Administrative Law Judge to subpoena the witness to testify. (b) Provide proof to the court that the witness has some valid information. (c) Send the witness a valid notice of appearance. (d) Have his or her lawyer issue a writ of mandamus. (a) Ask the Administrative Law Judge to subpoena the witness to testify. What does Writ of mandamus mean? restoring privileges 22. If an investigator from the DBPR found a minor infraction of F.S. 475 or F.A.C. 61J2, what would be the likely result? (a) The investigator would attempt to obtain a summary suspension. (b) The investigator would notify the Chairperson of the FREC. (c) The investigator would issue a cease and desist order. (d) The investigator would issue a Notice of Noncompliance or citation. (d) The investigator would issue a Notice of Noncompliance or citation. 23. A sales contract specifies that the buyer will pay a secondary deposit by March 15th. The sales associate neglected to collect the deposit on time. Which of the following statements is correct? (a) The sales associate is not responsible for collecting the deposit, this is the broker's responsibility. (b) The broker should notify the FREC of an escrow dispute. (c) By forgetting to collect the deposit, the sales associate may cause harm to the seller, and could be charged with culpable negligence. (d) The sales associate may be charged with conversion. (c) By forgetting to collect the deposit, the sales associate may cause harm to the seller, and could be charged with culpable negligence. Culpable negligence example is forgetting to collect escrow. 24. Occasionally FREC may receive a complaint from a member of the public that is not considered a "legally sufficient" complaint. Which of the following scenarios would be considered legally sufficient? (a) An assistant forgets to give a message to the broker, so the broker did not call the seller in a timely manner. (b) A sales agent in single agent relationship representing the seller discloses to the purchaser that the house the buyer is considering is located near a waste treatment facility. (c) A sales associate charges a fee to write a lease for a prospective tenant. (d) A sales associate in a No Brokerage Relationship does not present a verbal offer. (c) A sales associate charges a fee to write a lease for a prospective tenant. 25. Which penalty would apply to a licensee who is guilty of false advertising? (a) Minor offense requiring reprimand (b) First-degree misdemeanor (c) Second-degree misdemeanor (d) Third-degree felony (c) Second-degree misdemeanor 26. What may a real estate sales associate or broker who does not pay attention to detail and causes harm to another be charged with? (a) Misrepresentation (b) Conspiracy (c) Intentional deception (d) Culpable negligence d) Culpable negligence because is says causes harm forgets to collect escrow 27. A licensee from Miami decided to purchase a home in Orlando. Because the licensee was unfamiliar with the Orlando market, while acting as a buyer the Miami licensee engaged the services of an Orlando broker. The Orlando broker neglected his duties, resulting in a financial loss to the Miami licensee. Which statement is correct regarding this situation? either directly or indirectly must hold an active broker's license. Reference: Chapter 5, Types of Business Formations, Real Estate Brokerage Partnership 3. Which of the following statements is correct regarding a licensed broker associate who is with a real estate brokerage partnership? (a) The broker associate may be a member of the partnership. (b) The broker associate may make earnest money deposits with the broker's permission. (c) The broker associate must hold an active broker's license. (d) The broker associate may not provide real estate brokerage services to others. Your answer: B Sales associates or broker associates cannot be partners in real estate brokerage partnerships. A broker associate is an applicant for a broker's license that chooses to continue employment in a sales associate's capacity with a current employer subsequent to passing the state examination. A broker associate may perform the duties of a licensed sales associate, such as depositing escrow funds and providing real estate brokerage services, with permission from the broker. Reference: Chapter 5, Types of Business Formations, Real estate Brokerage Partnership 4. All of the following business formations can register to conduct real estate transactions, EXCEPT: (a) Corporation for profit (b) Not-for-profit corporation (c) Corporation sole (d) Limited partnership Your answer: C A corporation sole is formed under common law principles for religious purposes. It can buy and sell real estate for its own use, but title is not taken in the corporate name. A corporation sole cannot be registered as a real estate brokerage corporation. Reference: Chapter 5, Types of Business Formations, Corporation Sole 5. If a broker has conflicting demands on money held in escrow, what is the first thing the broker should do? (a) Consult with a real estate attorney who is experienced in handling escrow problems (b) Refer the parties to FREC (c) Notify the Florida Real Estate Commission in writing (d) Give the escrow money to the closing agent Your answer: C Conflicting demands from the buyer and seller demanding that the broker release escrowed funds is termed an escrow dispute. If a broker receives conflicting demands for escrowed funds, or if the broker has good faith doubt as to which person is entitled to escrowed property, the broker must give written notification to the FREC within 15 business days from the date of the last party's demand. The broker is required to institute an authorized settlement procedure to resolve the dispute within 30 business days from the first party's demand. Authorized settlement procedures include: mediation, arbitration, court action, or an escrow disbursement order. Reference: Chapter 5, Escrow Funds, Escrow Disputes 6. If a sales associate receives a post-dated check, which of the following is the most appropriate action? (a) The sales associate should immediately give the check to her employing broker. (b) The sales associate should refuse to submit the offer without a cashier's check. (c) The sales associate should hold the check and give the check to her broker when it becomes valid. (d) The sales associate should cash the check and deposit the funds into her broker's escrow account. Your answer: A A sales associate or broker associate who receives an earnest money deposit on behalf of his or her employer must deliver the deposit to the employer no later than the end of the next business day following receipt. This includes post-dated checks. Reference: Chapter 5, Escrow Funds, Depositing Escrow Funds 7. Which of the following statements regarding an ostensible partnership is correct? (a) An ostensible partnership is required to file documents with the Secretary of State. (b) An ostensible partnership is not a true partnership. (c) An ostensible partnership cannot be created by real estate brokers. (d) An ostensible partnership will not be treated as though the participants were partners. Your answer: B An ostensible or quasi-partnership is not a true partnership. It is created when two or more parties act or operate in a manner that deceives or misleads someone into believing a partnership does exist. If two or more brokers operate in such a manner that a partnership appears to exist, an ostensible partnership has been created. A court can judge a broker liable for the actions of all the brokers as if a true partnership did exist. Furthermore, the commission can take disciplinary action against all of the brokers. Reference: Chapter 5,Types of Business Formations, Ostensible Partnership 8. Who has the right to inspect a broker's escrow account records? (a) The parties to a real estate transaction (b) The Department of Business and Professional Regulation or its authorized representatives (c) The state Attorney General (d) A public defender Your answer: B A broker who receives a deposit must keep an accurate account of each escrow deposit transaction. The broker must make available to the DBPR, or an authorized representative, all deposit slips and bank account statements together with all agreements between the parties to the transaction. Reference: Chapter 5, Escrow Funds, Record Keeping 9. All of the following businesses are required to file documents with the state, EXCEPT: (a) Corporation for profit (b) Not-for-profit corporation (c) Corporation sole (d) Cooperative association Your answer: C A corporation sole is formed under common law principles for religious purposes. A corporation sole is not required to file any documents with the state. Reference: Chapter 5, Types of Business Formations, Corporation Sole; See also Summary of Business Formations 10. Which condition would require a location to be registered as a brokerage branch office? (a) Tables and chairs are provided for sales associates and customers (b) The location is used as a shelter to get out of the sun or rain (c) Literature which contains the broker's office address is handed out (d) Sales associates are permanently assigned to the location Your answer: D Unless transactions are closed or sales associates permanently assigned, a temporary shelter used by a broker as protection for sales associates and customers is not considered to be a branch office. The permanence and use of a location and the character of activities conducted there determine whether registration is required. Reference: Chapter 5, Brokerage Office Requirements, Branch Office Requirements 11. Which statement best describes the office sign requirements for a brokerage office? (a) Only one sign per firm is required regardless of the number of offices. (b) Each sales associate associated with the firm must have a separate sign. (c) Every active broker must maintain a sign at each brokerage office or branch office. (d) Office signs are permitted but not required by law. Your answer: C A broker is required to have a sign on or about the entrance to the office, and all branch offices, where it can be easily observed and read by persons entering the office. It may be placed either on the exterior or interior of the office. Reference: Chapter 5, Brokerage Office Requirements, Office Signs 12. All of the following are authorized alternatives for a broker to use in order to resolve an escrow dispute, EXCEPT: (a) Seek an escrow disbursement order from the Commission (b) Submit the escrow dispute to mediation or arbitration (c) Seek a court decision to resolve the escrow dispute (d) Obtain an attorney's opinion Your answer: D The following authorized procedures are available to settle an escrow dispute: mediation, (a) The following Monday (b) Wednesday (c) Thursday (d) Friday Your answer: D Sales associates and broker associates that receive earnest money must deliver the deposit to the broker no later than the end of the next business day following receipt. A broker must immediately place earnest money deposits in an escrow or trust account. "Immediately" is defined by the FREC as no later than then end of the third business day following receipt. Saturdays, Sundays, and legal holidays are not considered business days. Reference: Chapter 5, Escrow Funds, Depositing Escrow Funds 20. When two or more parties participate together in one transaction where no formal paperwork or registration is completed, which type of business relationship has typically been formed? (a) Joint venture (b) Corporation (c) General partnership (d) Limited partnership Your answer: A A joint venture, or joint adventure, is similar to a partnership in some respects. The participants in a joint venture have joint and several liability. However, a joint venture is a temporary business involving a single transaction or a predetermined number of transactions. Since their relationship is temporary, they cannot bind one another to any new transactions. A joint venture can be formed either orally or in writing. No documents must be filed with the Secretary of State to create a joint venture. A joint venture can provide real estate brokerage services if composed of separate real estate brokers. In this situation, the joint venture is not required to register with the DBPR as the brokers are already licensed and permitted to perform services of real estate. Reference: Chapter 5, Types of Business Formations, Joint Venture 21. Which statement regarding the registration of real estate branch offices is true? (a) A broker may conduct business from more than one unregistered office as long as the principal office is registered with the DBPR. (b) A brokerage branch office may be closed and reopened at the same location during the same license period by requesting a reissue. (c) When a registered branch office is moved, a fee must be paid, but a new application for registration is not required. (d) A temporary shelter must always be registered as a branch office. Your answer: B If a broker desires to conduct business from more than one office, each additional office must be registered individually as a branch office with the appropriate fee paid. If a broker closes a branch office, the registration of the branch office cannot be transferred. Each new branch office location must be registered with the DBPR, and the appropriate fee must be paid. If a branch office is closed and later reopened in the same location during the same 2-year license period, a reissue of the license may be requested, without additional fee. If a branch office is moved, a new application for registration with proper fee paid is required for the new location. Unless transactions are closed or sales associates permanently assigned, a temporary shelter used by a broker as protection for sales associates and customers is not considered to be a branch office. The permanence and use of a location and the character of activities conducted there determine whether registration is required. Reference: Chapter 5, Brokerage Office Requirements, Branch Office Requirements 22. Where may a real estate brokerage office be located? (a) In a residential neighborhood which prohibits commercial properties (b) In a motorhome (c) In at least one room in a fixed location wherein books and records may be retained and negotiations may be conducted (d) In a broker's car Your answer: C Each active broker is required to open and maintain an office, which must be registered with the DBPR. The office must consist of at least one enclosed room in a building of stationary construction where negotiations and the closing of real estate transactions can be conducted with privacy. The law does not require a broker to have a telephone, desk or checking account. A broker must maintain books, records and files pertaining to transactions of others in the broker's office for a period of at least 5 years. A broker can have an office or branch office in his or her home, if not in conflict with local zoning ordinances. Reference: Chapter 5, Brokerage Office Requirements, Principal Office Requirements 23. In which of the following institutions may a broker place escrow deposits? (a) Title companies, banks, savings and loan associations, and credit unions (b) Mortgage companies, savings and loan associations, finance companies, and credit unions (c) Insurance companies, savings and loan associations, credit unions, and title companies (d) Stock brokers, finance companies, banks, savings and loan associations, and mortgage companies Your answer: A An escrow account or trust account may be in a commercial bank, title company having trust powers, credit union or savings association located in the state of Florida, and not in a stock of bond brokerage house. Reference: Chapter 5, Escrow Funds, Escrow Account 24. Four individuals wish to form a real estate brokerage partnership. All partners will work with buyers and sellers, showing properties and taking listings. Which statement best describes the necessary legal requirements? (a) All partners must be licensed as active brokers. (b) The partners are not required to have real estate licenses, but the profits must be distributed equally amongst all four partners. (c) The partnership must be registered with the Department of Business & Professional Regulation and at least one partner must be licensed as an active broker. (d) At least one partner must be licensed as an active broker and the others may be licensed as sales associates, or brokers. Your answer: A Real estate brokerage partnerships must be registered with the DBPR in the name of the partnership, and have at least one partner licensed as an active broker. Inactively licensed brokers and unlicensed persons can be partners but cannot perform real estate services; however, they must be registered with the DBPR. All partners who provide real estate services to the public either directly or indirectly must hold an active broker's license. Sales associates or broker associates cannot be partners in real estate brokerage partnerships. Reference: Chapter 5, Types of Business Formations, Real Estate Brokerage Partnership 25. A business legally formed and registered as Rich Real Estate, Inc. is considered to be what type of organization? (a) Joint venture (b) Limited partnership (c) General partnership (d) Corporation Your answer: D A corporation for profit is an artificial person created by law. The corporate name must include the word "corporation," "company," "incorporated," or the abbreviation "Corp.," "Inc.," or "Co.". No business is allowed to use the word "company" in its name unless it is formed legally as a corporation or unless the words "not inc." are added. Reference: Chapter 5, Types of Business Formations, Corporation for Profit 26. Which business structure may be registered to broker real estate? (a) Trust (b) Joint venture (c) Limited partnership (d) Unincorporated association Your answer: C A real estate brokerage limited partnership must be registered with the DBPR. A joint venture is a temporary business involving a single transaction or a predetermined number of transactions. A joint venture can provide real estate brokerage services if composed of separate real estate brokers. In this situation, the joint venture does not register with the DBPR as the brokers are already licensed and permitted to perform services of real estate. A business trust cannot be registered with the Commission as a real estate brokerage corporation. decision. After a hearing where both parties have an opportunity to be heard, the arbitrator decides how the funds should be disbursed and issues an "award." The award is binding and can be enforced in a civil law suit if the responsible party fails to abide by the decision. In contrast, if the parties submit the dispute to mediation, they appoint a third party to assist in reaching an agreement. The mediator has no power to impose a decision on the parties. Reference: Chapter 5, Escrow Funds, Dispute Settlement Procedures, Arbitration 32. If a real estate licensee is involved in a personal real estate transaction, which of the following would be correct? (a) The licensee must disclose his or her license status in any advertising. (b) The licensee must disclose the license status on any yard sign using terminology such as "owner agent." (c) The licensee is not required to disclose his or her license status in a personal transaction. (d) The licensee should disclose his or her license status prior to entering into any serious negotiations. Your answer: D Brokers, sales associates and broker associates are entitled to deal in real property for personal benefit. Licensees should make clear that they are dealing on their own account and not acting on behalf of others. Licensees must make known their status as licensees to members of the public. This disclosure must take place prior to entering into serious negotiations, but is not required to take place in the preliminary stages of a transaction such as newspaper advertising. The licensee should also ensure that this disclosure is in writing in the Purchase and Sale Contract. Reference: Chapter 5, Brokerage Office Requirements, Personal Transactions 33. Bob is a licensed sales associate, employed by broker Jerry. Jerry fails to pay Bob a commission, so Bob resigns and is hired by broker Sam. Bob decides to sue for his lost commission. Which of the following is accurate regarding this scenario? (a) Bob cannot bring a legal action for the claimed commission against anyone other than broker Jerry. (b) Broker Sam must sue broker Jerry for the commission due to Bob, since Bob is now employed by Sam. (c) Sam assumed responsibility for the unpaid commission when he employed Bob. (d) Bob may file a lis pendens against either Sam or Jerry for the commission due him. Your answer: A A sales associate who is not compensated as agreed upon by his or her employer may not file suit against anyone other than the employer. Reference: Chapter 5, Sales Associate's Duties, Compensation Who owes fiduciary duties in a single agency relationship? The broker only Which activity is NOT exempt from the requirement to provide disclosures under the Brokerage Relationship Disclosure Act? Showing property to a party that is not being represented As an agent, a broker is employed by and acts on behalf of whom? A principal In which of the following situations does a general agency relationship exist? Whan a sales associate is employed by a broker Broker Joan just received an oral offer to purchase listed property. No earnest money accompanied the oral offer. Which of the following statements is correct? Joan must present the offer. Which of the following statements best describes a transaction broker? A transaction broker provides limited representation to both parties. A broker failed to advise a principal regarding the value of the owner's property prior to accepting a listing. Which fiduciary duty did the broker breach? Disclosure Broker Tom sold a property which was listed with broker Alice. Tom was unable to attend the closing, so Alice collected the entire commission. Alice refused to pay Tom his share of the commission. What could Alice be charged with? Failure to account Mary, an Ohio broker, accompanied a customer to Florida and met with broker Stan in his office in Miami. While Stan showed the customer property and obtained a binding contract for the purchase of a condominium, Mary took some time off and went to the beach. When Mary returned to Stan's office, she discovered that Stan had written a contract and demanded a share of the commission. Which statement is correct? Stan may share the commission with Mary. What is an agent required to do in an agency relationship? Attempt to obtain the most favorable price and terms on behalf of the principal When can an agent disclose confidential or harmful information about a principal? Never Which transaction is NOT included in the definition of a residential transaction? Dispositions of business interests involving property of five or more residential units When can both parties in a transaction pay a broker a commission? When both parties agree to the dual commission Which of the following does NOT control agency relationships in real estate? The Department of Financial Services Which of the following statements best describes policy and procedure manuals? Policy and procedure manuals are useful in maintaining good relations. A broker has appointed two sales associates to act as agents in a nonresidential transaction, one for the seller and one for the buyer. Which statement is correct? The sales associates are referred to as designated sales associates. Which relationship is NOT adversarial? Fiduciary Fairness and honesty are required of all licensees in which relationship? Any real estate transaction According to the Brokerage Relationship Disclosure Act, which is the only brokerage relationship form that must be signed or initialed? Consent to Transition to Transaction Broker Which of the following statements regarding a broker is correct? A broker must follow all legal instructions of the principal or withdraw. In many brokerage relationship situations, the broker gives permission for the sales associate to work directly with a principal. Which of the following is true in this situation? The sales associate has a fiduciary relationship with both the broker and the principal. In regards to agency relationships, which statement is most correct? A special agent is only authorized to perform a single act on behalf of the principal. Sal, a properly licensed Arizona broker, forms a relationship with Betty, a properly licensed Florida broker. Sal agrees to refer potential buyers to Betty, and in return, Betty agrees to pay Sal 25% of her commission as a referral fee. Jorge, a competitor of Betty's, discovers the relationship and files a complaint with DBPR. After investigating the complaint, it will be determined that: the Florida real estate license law was not violated Which of the following best describes the practice of dual agency in Florida? Dual agency is a violation of Florida Statute 475. is exempt from continuing education requirements to maintain a real estate license. What is a broker associate? A broker who is employed as a sales associate What is the agreement called that the state of Florida has with some other states which recognizes the similarity in education and experience required of licensees? Mutual recognition Which of the following statements is true regarding a plumber who has been appointed by a court to appraise a small business? The plumber may do so and be paid a fee. Which of the following is NOT exempted from the real estate license law? Funeral directors. A Georgia broker with extensive experience in conducting auctions was asked by a local real estate broker to auction a small motel in Jacksonville. The auction did not result in a sale. The Florida broker paid the Georgia broker for out-of-pocket expenses, but did not pay a commission. Which of the following statements is correct? The Georgia broker violated the license law. Complete the statement. If a real estate sales associate is employed by an owner or developer, the owner or developer must be: registered, but not licensed. Blake received her initial sales associate's license on August 23rd, 2011 with an expiration date of March 31st, 2013. If Blake does not complete her 45-hour post-license course by the expiration date, what will the status of her license be? Void Which of the following describes an attorney in fact? Someone who has been granted power of attorney. Which of the following is correct concerning an applicant who has been denied by the Department of Business and Professional Regulation? The applicant must be notified in writing of the reason for the denial and advised of the right to request a formal hearing. An individual who has obtained a Florida broker license, but chooses to work under another broker in the capacity of a sales associate, is referred to as: a broker associate. What must an applicant for a real estate license do if they have been convicted of a crime? The applicant must disclose all convictions on the application. A sales associate did not complete their post-licensing requirement by the expiration of the initial license. What grace period will the state grant for the licensee to reinstate the license? There is no grace period. The license is void. An applicant for a real estate license had his/her application denied. All of the following are valid reasons for a denial, EXCEPT? The applicant was not a US Citizen. An active Florida licensee decides to move to North Carolina, but wishes to keep her Florida license active and continue to practice real estate in Florida. Which of the following best describes this situation? The licensee must notify the Real Estate Commission of her change of address, and continue to comply with all Florida regulations. A licensed sales associate wishes to work for Broker A during the week, and works in a different town with Broker B on the weekend. This arrangement is: a violation of FS 475. 1. The Department of Business and Professional Regulation has the authority to issue all of the following, EXCEPT: (a) A cease-and-desist order (b) A subpoena (c) An injunction (d) A notice of noncompliance (c) An injunction 2. What is the maximum number of years a member may serve on the Florida Real Estate Commission? (a) 4 (b) 8 (c) 12 (d) No maximum (d) No maximum 3. Which statement is true regarding the Secretary of the Department of Business and Professional Regulation? (a) The Secretary is a member of the Florida Real Estate Commission. (b) The Secretary is appointed by the Governor. (c) The Secretary must be an attorney. (d) The Secretary answers to the state legislature in the performance of duties. (b) The Secretary is appointed by the Governor. 4. The Division of Real Estate is an administrative part of which of the following? (a) The state of Florida (b) The Department of Commerce (c) The Department of Banking (d) The Department of Business and Professional Regulation (d) The Department of Business and Professional Regulation 5. Which statement is true regarding examination questions and answers? (a) They are published in the Administrative Weekly before appearing in an examination. (b) They may not be challenged. (c) They may be reviewed by any member of the public upon request. (d) They are confidential. (d) They are confidential. 6. Which of the following entities issues real estate licenses? (a) The state of Florida (b) The Department of Business and Professional Regulation (c) The Department of Revenue (d) The Florida Real Estate Commission (b) The Department of Business and Professional Regulation 7. After being active in the real estate business for over five years, a licensee's license expired on September 30. What is the status of the license on October 1? (a) Suspended (b) Revoked (c) Involuntary inactive (d) Voluntary inactive (c) Involuntary inactive 8. The Florida Real Estate Commission held a meeting for the purpose of passing a new rule. This is an exercise of which Commission power? (a) Executive (b) Quasi-legislative (c) Quasi-judicial (d) Ministerial (b) Quasi-legislative 9. Which of the following statements is true regarding the Director of the Division of Real Estate? (a) The Director is appointed by the Secretary of the Department of Business and Professional Regulation. (b) Multiple licenses are requried in this situation. (c) This arrangement violates the license law. (d) This is permissible if both employers agree to the arrangement. (c) This arrangement violates the license law. 21. What specific information does an applicant for a real estate license provide that is considered to be public record? (a) Financial information (b) Test scores (c) Name and address (d) Medical information (c) Name and address 22. A sales associate is licensed under an owner-developer that owns several affiliated organizations. If the employer wishes to have the sales associate provide real estate services for these various organizations, what type of license should the sales associate request? (a) Multiple (b) Group (c) Corporate (d) Branch office (b) Group 23. Sarah is an actively licensed broker for XYZ Realty, a registered real estate brokerage corporation. She has an opportunity to buy an existing real estate corporation, BBD Realty, Inc., in a town which is located 25 miles away. Sarah wants to become the only broker for both corporations; however, she does not wish to change the name or combine the two corporations. How may Sarah accomplish this? (a) Sarah cannot be a broker for two different corporations; The corporations must be merged into one entity. (b) Sarah may request a group license. (c) Sarah may request multiple licenses. (d) BBD should be registered as a branch office of XYZ Realty. (b) Sarah may request a group license. 24. The DBPR receives a complaint regarding unlicensed real estate activity. Which of the following would be an appropriate DBPR response? (a) A cease and desist order (b) Jail time (c) An injunction (d) Suspension or revocation (a) A cease and desist order 25. The Florida Real Estate Commission has many duties and powers. Which of the following is the category of power that can only be performed specifically by the Chairperson? (a) Executive powers (b) Quasi-judicial powers (c) Quasi-legislative powers (d) Injunctive relief (a) Executive powers 26. A licensee failed to renew his or her license prior to the expiration date, and reverted to involuntarily inactive status. How long may this individual's license remain in this status before the license becomes null and void? (a) 2 years (b) 3 years (c) 4 years (d) 5 years (a) 2 years 27. Which statement is true regarding a broker who wishes to operate two independent real estate brokerage corporations? (a) The broker cannot be an officer or director of more than one brokerage corporation. (b) The broker must register as a broker associate with one company, and can retain their broker status with the other company. (c) The broker can do this by requesting multiple licenses. (d) The broker should request a group license. (c) The broker can do this by requesting multiple licenses. 28. All of the following penalties could be imposed by the FREC, EXCEPT: (a) Probation (b) Administrative fine of up to $15,000 per offense (c) Suspension for up to 10 years (d) Revocation (b) Administrative fine of up to $15,000 per offense 29. The FREC issued a final order revoking the license of Too Much Fun Realty, Inc. Which of the following best describes the status of the licensees at this company? (a) Provided there is at least one actively licensed broker, the business may continue to operate. (b) Revocation of the corporation has no effect on the licenses of the active brokers or sales associates within the corporation. (c) All licensees within the corporation are automatically inactive. (d) The registration of the corporation can be reinstated after a 90 day waiting period by filing the appropriate paperwork and paying the appropriate fees. (c) All licensees within the corporation are automatically inactive. 30. A licensee failed to complete the required 14-hour continuing education for their second renewal and their license expired on September 30th. What is the status of the license on October 1st? (a) Voluntarily inactive (b) Involuntarily inactive (c) Suspended (d) Revoked (b) Involuntarily inactive 31. Which of the following statements accurately represent group and/or multiple licenses? (a) Sales associates and broker associates may be issued multiple licenses. (b) Brokers who have multiple offices are issued a group license. (c) Brokers are issued concurrent group and multiple licenses. (d) Sales associates and broker associates may be issued a group license. (d) Sales associates and broker associates may be issued a group license. 32. A licensee without any pending disciplinary issues decides she no longer wishes to practice real estate and simply gives the license back. What is the status of the license after it is returned to the Department? (a) Suspended (b) Expired (c) Cancelled (d) Surrendered (c) Cancelled 33. Which best describes the status of an applicant who has just passed the state examination for Sales Associate? (a) A license is issued at the testing facility. (b) The licensee must wait until the license is physically received before performing any service of real estate. (c) The licensee can automatically start to offer services of real estate since he or she has passed the exam. (d) The license is placed in inactive status until the licensee notifies the state that he/she has an active employer. (d) The license is placed in inactive status until the licensee notifies the state that he/she has an active employer. Which of the following statements is true regarding a mortgage loan originator? A mortgage loan originator must have a separate license. A real estate appraiser's fee for professional service is based on which of the following? The time and difficulty of the appraisal.