Real Estate Licensing and Regulations in New York, Exams of Real Estate Management

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How often must you renew your real estate salesperson/broker license? ✔✔Every 2 years What is the purpose of license laws in the real estate industry? ✔✔To minimize fraudulent practice and protect the general public The New York regulatory agency that oversees real estate licensure is the: ✔✔Department of State Most of the law about salespersons and brokers is in which article of the Real Property Law? ✔✔Article 12 - A What are the age requirements for a broker applicant and a salesperson applicant, respectively? ✔✔Broker must be at least 20 years old; a salesperson must be at least 18 years old.

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Attorneys admitted to practice in the NY courts may act as brokers (help you sell, buy and get commission) without obtaining a broker license. However, under what circumstance must they obtain a real estate license? ✔✔If they employ salespersons to work under their supervision Do building superintendents and maintenance workers (who perform tasks such as rent collection) for one owner or company require licensure? ✔✔No How long does a licensee have from the license expiration date to renew? ✔✔Two years If a DOS officer appears and asks a licensee (you) for a photo ID, what should the licensee (you) do? ✔✔The licensee must carry photo ID cards at all times when doing business and show it on demand Under the Real Property Law in New York, a branch office manager may be a(n): ✔✔associate broker What must brokers' business sign contain? ✔✔Broker's name and the words "licensed real estate broker"

The listing salesperson must accept compensation directly from: ✔✔Sponsoring broker When brokers improperly pay any part of their compensation to anyone who is not license or who is not exempt from the license law, they violate the license law. This payment is called a: ✔✔kickback If licensees terminate their association with a broker, they must turn over all obtained during their association with the broker. ✔✔listing agreements and contracts What is the mixing of the funds of others with business or personal funds called, and what is the charge for it? ✔✔Commingling; misdemeanor. What is the apportionment of other people's money from one use to another called? (if a broker uses deposit money that does not yet belong to the broker, places it in the operating account, and spends it) What is the charge for it? ✔✔Conversion; felony (more severe than misdemeanor). An illegal type of commission arrangement in which all monies above a net amount are the broker's commission is called what? ✔✔Net listing

Violators of Article 12 - A may be guilty of a misdemeanor. What is the penalty for a misdemeanor? ✔✔A fine of up to $1,000 and/or imprisonment for up to one year. The revocation (cancelled/revoked) or suspension (temporarily cancelled) of a broker's license also... ✔✔suspends the licenses of the salespersons and associate brokers affiliated with the broker. When should we show the Property Condition Disclosure Act form to the purchaser? ✔✔before the seller accepts the purchase offer If the seller refuses to disclose the Property Condition Disclosure Form in the sale of 1-4 unit residential property, which of the following must happen? ✔✔The seller must credit $500 to the buyer at closing. The person hired on another's behalf is the: ✔✔agent Upon creation of the relationship (agency), the agent is a: ✔✔Trustee (fiduciary) The agent's fiduciary duties include: ✔✔Obedience

Loyalty Disclosure Confidentiality Accountability Reasonable Care, Skill, and Diligence What are the broker's responsibilities to the client? ✔✔Fiduciary duties Who must pay for the financial loss of a principle due to the agent's negligence and failure to meet the standards of skill, care and diligence? ✔✔Agent What is an example of a general agent? ✔✔Property manager (more than 1 job) What is an example of a special agent? ✔✔A real estate broker who has a property listing (only 1 job) What are the duties of the principal to the agent? ✔✔Cooperation, compensation and idemnification (principals pay for loss if it is their fault)

If an agent exaggerates his experience in order to get a listing, this agent may be guilty of: ✔✔misrepresentation When one person is responsible or liable for the actions of another person, this is called ✔✔vicarious liability Contract signed by action is called ✔✔implied contract An agency by estoppel exists when ✔✔a principal does not stop an individual from representing his interests, thus creating an agency relationship between the two. Compensation is determined through ✔✔negotiation When the property is sold and the commission is not paid yet, the salesperson should seek recovery directly from ✔✔the sponsoring broker When competitors conspire to charge the same or similar prices for services, this is called ✔✔Price fixing

A conspiracy where a person or group is persuaded or coerced into not doing business with another person or group is called ✔✔Group boycotts Agreement between competitors who are dividing or assigning a certain area is called ✔✔Market allocation agreements A condition of sale where the buyer must buy another product from the seller is called ✔✔tie-in arrangements An agent hired by both the seller and buyer is called a ✔✔dual agent NY law permits consensual dual agency with ✔✔disclosure and informed consent An agent who works for one part is called the ✔✔single agent An agent who works for the buyer is called the ✔✔buyer agent

The termination of an agency relationship is accomplished by ✔✔Expiration of listing contract, selling of the house before allotted time, your sponsoring broker lost (revoke/suspend) his license (answer: all of the above) Under the exclusive-right-to-sell listing contract, ✔✔only one broker lists the property. if ANYONE ELSE sells the property during the contract term, the broker is legally entitled to the commission. The exclusive-right-to-sell listing contract provides a commission to ✔✔the listing broker no matter who sold the property Under the exclusive agency agreement, ✔✔only one broker lists the property. if the owner sells the property, the broker EARNS NO commission. An agreement in which the seller allows a property to be shown by one or more brokers is called ✔✔Open listing The NYS Agency Disclosure Form must be used in the sale or lease of ✔✔Residential 1 - 4 unit properties and condominiums and cooperatives to the customers in any size buildings.

Section 443 requires licensees to present a written agency disclosure form (residential properties only) to customers at what moment? ✔✔At the first substantive contact When is the first substantive contact with a prospective seller or buyer? ✔✔When the parties share some information about the property, the moment they hire you If a buyer or seller refuses to sign the disclosure form, what steps must you take? ✔✔First, explain that the form is only a notice of consumer rights and not a binding contract. Then, upon returning to the office or as soon as possible after this substantive contact, the agent must complete a declaration form (and have it notarized with a copy for your broker and for yourself). The declaration licensees must fill out explaining the circumstances surrounding the refusal of the consumer to sign or read the NYS Agency Disclosure Form is called ✔✔declaration form The most important aspect of an independent contractor relationship is that ✔✔the employer does not have the right to control the details of a worker's performance (nonemployee)

Sales associates should pay their own ✔✔social security and income blind ad ✔✔an ad that does not contain the full address/telephone number of the broker or brokerage firm a real estate salesperson who works as an employee should not file ✔✔schedule C to the federal income tax from 1040 consists of land and everything permanently attached to the land, as well as the rights of ownership, ownership in land that includes the earth's surface, the area below the surface to the earth's center, and the area above the surface to outer space, immobile ✔✔real property everything that is not real property and is mobile is ✔✔personal property another name for personal property is ✔✔chattel real estate (before you get the deed) + a bundle of legal rights = ✔✔real property (when you have a deed)

riparian rights ✔✔belong to the owner of property bordering a flowing body of river when personal property attaches to real property ✔✔fixture a fixture that can make money for the owner (blackboard in a private school, shelves in a supermarket, display cabinets in a department store) ✔✔trade fixture the highest type of ownership to a parcel of land is the ✔✔fee simple (absolute) ownership, possession, and control for someone's LIFEITME ✔✔life estate Mr. A (the grantor) gives all his properties to his cat (life tenant) and upon the death of the cat everything goes to his girlfriend, Lina (grantee). This is called ✔✔life estate When title to real property is in the name of only one person or entity (one sole owner), it is ✔✔estate (ownership) in severalty (b/c interest is "severed" from all others) tenancy by the entirety, which contains the right of survivorship, is limited to the ✔✔spouse

if 3 or more people hold title to a parcel of one property, they only have unity of possession. Shares are not always the same amount. They have the right of inheritance (their portion goes to their heir). They may hold ✔✔tenancy in common Always equal shares and there is right of survivorship. The 4 unities must be shown to the attorney if they want to be under: ✔✔Joint tendency Property tax is considered as a ✔✔specific lien Claims against a specific and readily identifiable property (such as a mortgage, real property tax, mechanic's, materialmen's, and lis pendens) ✔✔specific liens Claims against all assets of a person (a person and all of his or her property) (judgment, writ of attachment, income tax, estate and inheritance tax) ✔✔general liens a nonpossessory interest in land owned by another. someone who owns this right does not own or have possession to the land where it lies, rather he can use or have access to the land. a

primary purpose of this is the right of entry and exit to and from places. the common term is "right-of-way". ✔✔easement created by the intrusion of some structure or object across a boundary line ✔✔enroachment Who must execute (notarize) the deed? ✔✔the grantor (seller) habendum clause ✔✔deed sometimes contains this, begins with the words "to have and to hold", describes the estate granted and must agree with the granting clause. full covenant and warranty deed ✔✔contains the strongest and broadest form of guarantee of title of any type of deed and provides the greatest protection to the grantee abstract of tite ✔✔a condensed history of the title, a summary of all links in the chain of title chain of title ✔✔the chain must be unbroken for the title to be good and therefore marketable mortgagor ✔✔borrower

mortagee ✔✔lender the buyer usually arranges for a final what on the day of or immediately before closing? ✔✔a final walk-through the division of expenses and income between buyer and seller, a closing usually involves this ✔✔proration in a sublease contract, who is still responsible to the landlord for the rent? ✔✔the original lessee when a landlord takes matters into his own hands, without the aid or control of the court system, and removes the tenant from the premises ✔✔actual eviction a contract that has no legal force or effect even though all of the essential elements for a contract exist ✔✔void contract institutions may charge this in making conventional mortgage loans. each one that the lender charges costs someone (the buyer or seller) 1 percent of the loan amount. ✔✔discount points

form of seller financing, paying purchase price in installments, deed is delivered among full payment over the contract term. parties involved are the vendor (seller) and vendee (buyer) ✔✔installment land contract the closing must take place on or before the exact date stipulated in the contract ✔✔time is of the essence who holds the down payment? ✔✔seller's attorney/ selling broker who signs the contract of sales first? ✔✔the purchaser (to verify buyer is serious about the offer) paying a debt through installment payments (i.e. monthly) ✔✔amortized mortgage mortgage where the monthly payments are lower in early years of the mortgage term ✔✔graduated payment mortgage financing that allows a buyer to obtain new property without having to sell the property ✔✔bridge loan

the lender participates in the profits generated by a commercial property used to secure payment of the debt in the mortgage loan ✔✔shared equity loan a form of interim, or temporary, short-term financing for creating improvements on land ✔✔construction mortgage regulation Z requires disclosure of buyer's ✔✔finance charge and include down payment protects people when they use consumer credit (i.e. mortgage loans, reverse mortgages, home equity lines of credit, open-end credit, certain student loans and installment loans), does not apply to commercial ✔✔regulation Z mortgage banker's and mortgage broker's licenses are registered by the ✔✔banking department (DFS --- Dept of Financial Services) if a loan does not meet the criteria of the Reserve Federal Board. does not meet government- sponsored entities (GSE) such as Fannie Mae or Freddie Mac guidelines for funding. ✔✔non- conforming loan

mortgage principal and interest payments on a debt ✔✔debt service the government's power or that of its agencies to take private property for public use WITH compensation ✔✔eminent domain the actual taking of private property under eminent domain is called ✔✔condemnation after a satisfactory final inspection, this is issued permitting the tenants or the owner to occupy the building ✔✔certificate of occupancy (C/O) obtained from the appropriate local government authority before constructing or renovating a commercial building or residential property ✔✔building permit if an owner dies intestate (without having a valid will), the decedent's property is distributed to heirs in accordance with NY laws. if there are no located heirs, the state uses this power and the property goes to the state. ✔✔escheat which of the following boards implements a comprehensive plan? ✔✔planning board

this board hears and decides and agrees upon or rejects the master plan ✔✔zoning board of appeals combining small parcels of land together to form a large piece of land for more value and more use is called ✔✔plottage the map that recites the boundaries of subdivisions is called ✔✔landmarks a special permission to use the land or house for a purpose prohibited by the current zoning restriction is called ✔✔variance property owners who need a variance must apply to ✔✔the local zoning board of appeals if the rezoning of a property is solely for the benefit of the property owner without a benefit to the entire neighborhood, this is called ✔✔spot zoning Spot zoning is (illegal/legal) in New York. ✔✔illegal

a local government official who estimates the value of real property within a city, town, or village's boundaries ✔✔tax assessor document with a rendering that al construction workers and the project manager must follow ✔✔blueprint the DOH reviews and approves this water system ✔✔wastewater treatment system