Real Estate Licensing Exam Questions and Answers: Florida, Exams of Real Estate Management

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Broker

Acts as an agent or intermediary between two or more parties for the purpose of negotiating the sale, purchase, or rental of real estate

Sales associate

An individual employed by the broker to provide services to buyers and sellers on behalf of the broker

Farming

The concentration of attention on one type or style of property or on one particular neighborhood

Farm area target market

Territory or area in which a real estate licencee focuses their business efforts

Transfer Components

Deeds, mortgages, surveys, appraisals, contracts, title insurance, floodplains, zoning and building codes

Comparative Market Analysis

An estimate of value based on recent sales of comparable properties within a specific neighbourhood. (Cannot be called an appraisal)

Broker Price Opinion

includes a neighborhood analysis of comparable properties w/ local and regional market information (less comprehensive than an appraisal but require more analysis)

A real estate licensee who desires to prepare an appraisal must do so under the.

development and reporting requirements of the Uniform Standards of Professional Appraisal Practice (USPAP)

expert knowledge areas required for real estate licensees

property transfer, valuation and marketing conditions, marketing

Residential Transaction

1. Sale of any improved residential property of four units or fewer

2. Unimproved property intended for four units or fewer

3. agricultural properties of ten acres or less

Real Estate licensees must be able to analyze.

The past and future potential income derived from an investment company

Commercial real estate brokers must also have a basic knowledge of.

Tax laws affecting income produced from commercial property and the tax implications of buying and selling investment property

Industrial properties include what?

Warehouses and manufacturing plants

Industrial sales

Normally are users/owners instead of investors

Industrial real estate brokers attempt to.

Locate properties that will meet the needs of the future owner. (Knowledge regarding government regulations of land use, environmental concerns, transportation, labor costs, and utility charges are crucial)

Business broker

specialises in listing and sale of businesses (business opportunities)

Must be capable of evaluating the value of a business being offered for sale or purchase

List

Absentee owners

Owners that purchase rental property as investments and rely on pros. to manage

Property manager's duties

finding tenants, collecting rent, paying all taxes, insurance and other expenses, keeping records, and scheduling repairs

Community Association Manager's licence is required CAM

Required when the community association employs a property manager who receives compensation for certain management services and the community association served contains more than 10 units or has an annual budget in excess of $100,

Appraisal fees are based upon

The time, effort and expense involved for completion of the assignment, not on the value of the property

Contract building

is when a developer acquires a large tract of land, records a subdivision plat map, and uses a model center from which sales may be made.

local level regulation

planning and zoning, property taxation, building and health code regulations. Local government can also impose a Moratorium or temporary delay for a building project

Commission

Florida Real Estate Commission (FREC)

Department

Department of Business and Professional Regulation (DBPR)

Division

Division of Real Estate (DRE)

Requirements for a licensed sales associate seeking broker

Must have been employed with no more, and no less than one actively licensed broker for at least 24 months during the five years immediately preceding qualification for the state broker examination

Broker associate

An applicant for a broker license may choose to remain employed in a sales associate capacity with the current employer following the passing of the state broker examination

Broker Associate A person qualified to receive a broker license, but who chooses to be employed subject to the direction, control, and management of an actively licensed

broker or owner-developer. Broker acts as sales associate

Applicant Requirements for real estate license

1. shall have social security number

2. shall be at least 18

3. shall have high school diploma or equivalent

Applicant Requirements for licensure

An applicant for Florida real estate license is not required to be a resident of the state of Florida, or to be a citizen of the United States

Answer background questions

Must disclose ANY criminal convictions, including felony or misdemeanor convictions or pleas (other than minor traffic offenses) regardless of adjudication. DUI is not a minor traffic offense and must be disclosed

If application to state exam is denied:

1 Declined by Department

2. Applicant shall be provided written notice
3. Applicant shall be advised that applicant must, within 21 days from date received,
4. Request a formal hearing before an administrative law judge

Sales associate may only be employed or compensated by.

their employing broker or owner-developer not by member of public

Employment by broker

A sales associate or broker associate may only be employed by one broker at a time

Employment by an owner-developer

An owner - developer is an individual or entity who is in the business of buying, owning, and/or developing real estate. The owner- developer must register with the Department but does not receive a real estate license.

Licensure and registration

Individual brokers, broker associates and sales associates are licensed and registered automatically when they pass the state exam, while brokerage corporations, partnerships, branch offices and owner developers are only registered

Sales associate first renewal

Sales associate must complete a 45 hour post license course.

If not completed licensee will be considered out of business and license will be voided

What happens when Continued education is not met within the renewal deadline (CE)

If CE requirement is not met within the renewal deadline, Licensee license status is changed to involuntary inactive.

Individuals exempt from licensure

attorney's in fact, attorneys at law, salaried employees of an owner of an apartment community who work in an onsite rental office of the apartment community in a leasing capacity

attorney's in fact

People who are appointed, under a power of attorney, to act for others in some capacity, such as signing a document.

Attorney's-at-law

May perform legal services on behalf of their clients they may prepare documents handle closings and give legal advice. May not perform services of real estate for

compensation, receive sales commissions, or referral fees without a real estate license

Void and ineffective licenses; Who can cancel a license?

Where a broker's license is suspended, revoked or otherwise void or ineffective, the licenses of all persons who are employed under such broker become automatically inactive.

If a licensee chooses not to practice real estate anymore, they may return the license to the department and it shall be cancelled

Who has the licensing and regulation of the real estate profession

The Department (DBPR)

Who has the authority to issue injunctions?

The Department has no injunctive relief authority regarding unlicensed persons, but may request an injunction from the courts for failure to comply with a Department order

Executive powers

The executive powers can be exercised by the chairperson acting alone or can be delegated, by quorum vote, to any other commission member.

Disciplinary authority of the Commision

Licensee found guilty of a violation may be subjected to one of the following disciplinary actions: censure - least severe penalty, administrative fine of up to $5,000 for each violation - 2 violations = $10,000, probation, or suspension of license up to ten years or revocation of license - most severe penalty

Prima Facie Evidence

rebuttable presumption that facts presented are true and correct

A license may remain in an involuntary inactive status for no more than?

Two years

group license

A single real estate license that can be issued if the sales associate or broker associate works for one owner-developer with affiliated organizations, which provides real estate services in different geographic areas.

Who and when can be issued multiple licenses

By seeking more than one license, a broker might be issued multiple licenses in two or more capacities. The broker is required to prove that additional licenses are needed for valid business purposes

Administrative law

The Department of Business and Professional Regulation, "the Department, created by F.S. 455" and the Florida Real Estate Commission, "the Commission, created by F.S. 475" are among agencies established through by statutes

Special Agent (single agency relationship)

Authorized under agency law by the principal to perform one act only. The employment contract between the principal and agent establishes the extent of authority delegated

Subagent-sales associate

Under agency law, a subagent has the same duties to the principal as the agent who was empowered by the principal. A sales associate is a general agent of the broker and automatically becomes a subagent of all the broker's principals. As an agent of the broker, a sales associate has the same duties to the broker's principals, as does the broker

Single agent (single agency relationship)

A broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction

Principal single agency relationship The party with whom the real estate licensee has

entered into a single agent relationship

Transaction broker A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.

Written disclosure

Sets forth the nature of the relationship a broker has with a member of the public and the duties inherent in the relationship-mandatory in single agency and nonrepresentation

Making offers available

A broker has a duty to disclose all offers to the principal including verbal offers or offers without a binder deposit. Failing to present an offer is considered concealment or a conflict of trust and can result in disciplinary action against the broker

Single Agency relationship

-An agency relationship is established when a broker enters into an employment under single agency agreement

a broker may represent a seller or a buyer

any attempt to represent both parties in a transaction would create dual agency which is ILLEGAL

in this relationship the employer becomes the principal, who authorizes the broker as agent to perform certain services on his behalf

Deal honestly and fairly

Account for all funds

Disclose all known facts that affect the value of residential property -

What 3 things may result from an agent's breach of fiduciary duties owed to their principal?

1. The principal can sue the agent for damages in civil court 2) Such breach can be construed as a criminal breach of F.S. 475 and lead to an action by state's attorney general 3) The licensee can be subjected to possible disciplinary action by the Commission

Single Agent Notice

Written disclosure that must be completed prior to or at the time of entering into a listing agreement, agreement for representation, or prior to showing property, whichever occurs first

arm's-length relationship

Parties act in their own best interest in an adversarial relationship opposites of fiduciary interest. Buyers and sellers customarily act at arm's length

What is a principal office and what are requirements

Its a broker's office and it must consist of at least one enclosed room in a building of stationary construction (can NOT be a motor home or a trailer)

Transferring principal office rules

Principal office registration is transferable to new location for remainder of the current registration period

Branch office

What is a branch office and what are the rules

When a broker opens more than one office. Each additional office must be registered individually with the appropriate fee paid

Branch office reopening rules

If a branch office is closed and then later reopened in the same location during the same two-year license period, a reissue of the license may be requested, without the need to pay and additional fee

Office signs

A broker must have a sign on or about the entrance to the office and all branch offices, where it can be easily observed and ad by persons entering the office

Legal advertising rules

1. Must be done in the name and under the supervision of the broker

2. All advertising must be done in a way such that a reasonable person would be aware that they are dealing with a real estate licensee

3. All real estate advertisements including yard signs, must indicate the registered name or trade name of the brokerage firm

violation of rules of advertising

If the licensee's personal name appears, the licensee's last name shall be printed in a type style no larger than that used and in the same or similar color as, and shall appear exactly as registered with the Commission. A sales associate or broker associate who advertises listed property in their own name when it should be advertised under the broker's name has committed a violation for which the only disciplinary action possible is for acting as a broker

Blind ads

an advertisement in a form that is in violation of the laws and regulations regarding real estate advertising, does not include the registered or trade name of the broker or for which there is reasonable doubt that the advertisement is that of a real estate broker

Licensees selling their own property

Licensees should disclose their status as licensees to members of the public but this only needs to occur before substantive negotiations

Escrow funds

Escrow Funds held by a third party on behalf of two parties in a transaction. Generally held by third party escrow service until it receives appropriate instructions for disbursement or until contract obligations have been fulfilled

Postdated checks Considered to be promissory notes and can be accepted as earnest money with the seller's approval

deposit rules with title company or attorney

when a deposit is placed or going to be placed with a title company or an attorney, the licensee who prepared or presented the sales contract must indicate on that contract the name, address, and telephone number of the title company or attorney with whom deposit was placed

Escrow account rules

account may be held in a commercial bank, title company which has trust powers, credit union, or savings and loan association located in Florida. Account can NOT be held in a stock or bond brokerage house and broker is NOT allowed to commingle or deposit the personal funds of any person with any funds being held in escrow or trust

How much of the broker's own or company funds can be deposited and held in a sales escrow account, and in a property management escrow account to open the account, maintain the account, and defray the cost of ordinary service charges?

Cabrillo $1,000 or less in a sales escrow account; $5,000 or less in a property management escrow account

When must an employer receive deposit from the associate or broker associate who received the earnest money deposit on their employer's behalf?

No later than the next business day after receipt

Broker's Liability - Deposit in Escrow

Within what period of time must a broker deposit in escrow?

Broker must "immediately" (within 3 business days) place deposit in an escrow

What should a broker do if he receives conflicting demands for escrowed funds or if they have good faith doubt as to which person is entitled to the escrowed property?

The broker shall give written notification to the Commission within 15 business days from the date of the last party's demand

When does a broker file a bill of interpleader?

In instances where they do not claim any rights to the deposit under dispute

Under what conditions may a broker return deposit to buyer without notice to the Commission?

If a broker is acting as escrow agent; and a sales contract is contingent on financing, but the buyer is unable to obtain financing

Under what circumstances may a broker return the escrow deposit during rescission period on receipt of buyer's written notice of intent to withdraw a contract?

In the ressale of a residential condo where a prospective buyer is allowed a three day rescission period

If a purchaser agrees to buy a property from HUD, what can the broker do?

The broker can disburse the earnest money deposit to the buyer as instructed in the HUD contract

For what do brokers have the right to receive compensation for services rendered?

When they have done that which they were hired to do

Failure to account

When one broker collects the entire commission and refuses to share with the other broker as agreed form of fraud

The fee a broker charges is always by law.

A matter of negotiation between broker and buyer or seller and finalized with a signed agreement

Overageunjust commission

When a broker illegally receives more than the agreed upon or customary commission without the knowledge of the employer

When a broker is employed to find a purchaser, when may he or she take commission?

Whenever an able buyer has met all of the seller's demands

Out of state or foreign broker laws

1. Out of state/foreign broker may accompany customer but CANNOT participate in transaction

2. If they do so then no referral fee or payment can be made.

3. A Florida broker cannot pay or divide a commission with unlicensed individuals (publix manager example)

Can a sales associate who is not paid as contracted by their employer sue anyone other than the employer

NO

When must a sales associate or broker associate notify the Commission of any change of employer?

Within 10 days

What must any resident licensee do if they become a nonresident

Must notify Commission of change of residency within 60 days and meet nonresident requirments

Within what time frame must a licensee who changes their current mailing address notify the Commission of such change and what is the penalty if they fail to do so

Within 10 days. Failure to do so may constitute a $500 fine

At what time can a sole proprietor register and operate as a real estate broker

when they have a valid, active broker's license

gun

Documents must be filed with the State to form a partnership

NO

may a sales associate or broker associate be a partner in a real estate brokerage partnership

NO

each partner who is acting as an agent for the public must have

an active broker's license

Limited partnership

has at least one general partner and at least one limited partner

Joint venture

All parties are liable, but joint venture is a temporary business involving but one transaction or a stipulated number of transactions

Real Estate Corporation Vs Real Estate Brokerage Corporation

1. Real estate corporation may buy and sell real estate for its own purposes but may not provide real estate brokerage services

2. Real estate brokerage corporations are registered with the Department to perform real estate services for others

Ostensible partnership -quasi partnership

Created when two or more properties such as brokers act or operate in a manner that deceives or misleads someone into believing that a partnership exists (not a true partnership)

Which businesses may register with the Department to perform brokerage services?

Corporation for profit, limited partnership, sole proprietorship

Which businesses may not register with the Department to perform brokerage services?

Business trust, cooperative association, corporation sole

Permissible activities of unlicensed personal assistants

1. fill out contract forms

2. check licenses and records

3. calculate commission checks

4. put up signs on property

5. create flyers and promotional information for broker to approve

Livingston Chapter 9 Practice Questions

What is the penalty for disclosure violations on rental listings, information or contracts

First degree misdemeanor punishable up to $1,000 or one year imprisonment

What degree misdemeanor is false advertising

Second degree

What is the penalty for operating as a Broker or Sales Associate without a valid and active license

third degree felony punishable up to $5,000 or 5 years in prison

Civil penalties

Fines or other financial payments imposed by a state or federal agency for violation of laws or regulations

concealment

occurs when broker fails to disclose information to a party-to whom the broker has such a duty-and that is material to their decsion

Culpable negligence

Occurs if a broker operates in a reckless, careless, and excessively negligent manner

Misrepresentation

Omission or misstatement of facts

Rendering an opinion of title

A broker cannot render an oral or written opinion that a title to the property being sold is good or merchantable. Rendering an opinion of title could be considered as practicing law, which is beyond the scope of a real estate license

Using lotteries

A broker who uses lotteries or trading schemes which involve the offering for sale of certificates or chances in order to influence any person to purchase real estate is guilty of fraud: contests where no purchase is required may be permissible

Notice of noncompliance

Adopted by Commission to handle first time minor violations by licensees. A violation is minor if it does not result in economic or physical harm to persons or affect public health

Complaint

an allegation by a complainant that a violation of the law or a rule has occured

Complaint analyst

reviews the complaint form or letter that describes the alleged violation to determine if the complaint is legally sufficient

Stipulation

A way to dispose of a charge when a respondent does not desire that the matter be heard at a formal hearing. The respondent and attorneys for the department enter into a settlement agreement in which the respondent generally does not admit guilt nor deny the allegations in the complaint (much like a plea bargain)

What may an administrative law judge do with respect to witnesses?

Issue subpoenas for witnesses and compel attendance of a witness. A respondent may request that a an administrative law judge subpoena a witness

Where and when can you appeal final order of the Commission

Florida District Court of Appeals within 30 days of the final order

Stay of Enforcement

Prevents a licensee from being out of business during appeal process. Will be granted unless a threat of probable danger to the welfare of the public is shown

Writ of Supersedeas

Supersedes the action of the Commission and allows the licensee to continue to practice until the case can be heard on appeal

Writ of Mandamus

An order by the court to the Commission to restore licensee's privileges

Recovery Fund - what must be done to be eligible to get reimbursement

1. A suit for damages must first be brought in a civil action against a broker or sales associate

2. After a judgment has been obtained, the personal assets of the licensee must first be utilized to satisfy the judgment

3. If the licensee's assets are not sufficient to satisfy the judgment, the party awarded the judgment may receive payment from the recovery fund

If a licensee was simply acting as a buyer or seller only.

.The licensee may recover on a basis and in the same manner as any member of the public

Blockbusting

Illegal practice of convincing homeowners to sell their properties by leading them to believe that a neighborhood is declining due to an increase in the number of minorities

Steering

Directing prospective buyers or renters to view homes in a particular neighborhood because of their race, religion, national origin, or ancestry

Redlining

A lender's decision not to grant a mortgage loan due to the geographical location of a property, age of the property, income level of the residents, or racial composition of the area

Deniz Aktas Real Estate Module 4 Flashcards 68

Does agent/broker have to disclose there was a homicide, suicide, or death

NO

Options and landlord handling for security deposit and advance rent

1. maintain the full security deposit or advance rent in a noninterest-bearing escrow account in a Florida banking institution for the benefit of the tenant;

2. maintain the full amount of such security deposit or advance rent in an interest bearing escrow account in a Florida banking institution for the benefit of the tenant. The tenant shall receive seventy-five percent of the interest earned or five percent per year simple interest

What may happen once there is a surety bond posted by landlord

Security deposit and advance rents may be commingled with other funds of landlord

Return of the security deposit

Within 15 days after the tenants vacate the premises, landlord shall return the security deposit plus accrued interest, if any, upon notice that no claim for damages will be asserted against the security deposit

Telephone solicitation Federal Law

1. Calls must be between 8AM-9PM

2. individuals may request to be placed on do not call list

3. violators are subject to a $40,000 fine per call

Real Estate

1. Must be physical, tangible, and immobile and includes earth's surface, subsurface, and air above the surface

2. Includes anything growing on the land, anything permanently attached to the land, and all improvements on and to the land (improvements are anything man made

Real property

Means the physical land and improvements, along with legal rights to own or use the property. One's property rights are guaranteed and protected by government

Riparian rights

Rights of an owner whose property borders a flowing waterway such as a river or stream

Littoral rights

Rights of owners of property bordering non-flowing water, such as an ocean, sea, or lake

Accretion

opposite of erosion (water --> soil)

Fixture

Something that used to be personal property, but has been installed or attached to the land or building in a permanent manner such that it has become part of the real estate

Trade fixtures

Personal property items which have been attached to real estate that is rented or leased by a tenant and used in conducting a business

IRMA

Intent, relationship, method of annexation, adaptation

Possession right

An owner has a right to posses

Disposition right

An owner generally has the right to sell the property, to give it away or leave it in a will

Enjoyment right

An owner has the right to quiet use and enjoyment of the property without disturbance by hostile claimants

Exclusion right

Owners have the right to prevent owners from entering or using their property

Control right

An owner has the right to decide on the use of the property

Estate

The extent, amount, character, and quality of interests or rights that a person may have in real estate. The percentage or kind of the bundle of rights owned by an individual determines the quantum or form of estate owned

Freehold estate

Estate with ownership

Fee simple estate

1. Owner has full bundle of rights

2. Most simple but extensive estate in land

3. Most desirable and most common type of estate

Estate in sevaralty

1. sole ownership of entire bundle of rights

2. The owner may leave their interest in a will

3. If the owner dies without a will, the interest will descend to the owner's heirs

Tenancy in common

1. fee estate held by two or more persons with undivided interest in the whole property

2. Can be created by same or different deeds, at same time or different times, equal or unequal shares of ownership

3. All owners have equal rights to use and possession

4. Tenancy in common owner may bequeath their interest in a will

Joint tenancy

1. Fee estate shared by two or more persons who must have equal and undivided interests

2. Right of survivorship

3. Interest can NOT be devised in a will since the form of ownership controls the succession of ownership

4. Possession, interest, time, title (PITT)

Tenancy by the entireties

an interest for marital partners only. Upon death of one partner, the surviving partner will hold the property in fee simple as an estate in severalty

What happens to ownership in case of divorce

Ownership becomes a tenancy in common unless otherwise controlled by the court

Separate property

property held in one spouse's name prior to the marriage or acquired as a gift or by inheritance during the marriage

Life tenant

The party to whom ownership of a life estate is given

Grantor

The party creating the life estate

Reversion estate

The right to recover ownership of a life estate

Remainder estate

When other than the original owner is to take ownership

Non-freehold estates

estate where tenant has no percentage of ownership in the property

Tenancy at sufferance

non-freehold estate created when a tenant is in lawful possession of a landlord's real estate and there is no agreement between the landlord and the tenant

Tenancy for years

non-freehold estate where tenant is in lawful possession of property based upon agreement with landlord for specific period of time

Elective share

Provides for a surviving spouse to be entitled to 30% of the decedent's real and personal property owned at the time of death

Florida constitution exempts homestead property from what?

Exempts homestead property from execution and forced sale of property to satisfy personal judgment liens (such as personal loans or credit card debt) which are held against head of household

The amount of property protected by homestead rights is limited to.

one-half acre if the homestead is located within municipality or to 160 acres if located outside of a municipality

Cooperatives

A corporation that buys and owns a multiple-unit building

Proprietary lease

Allows shareholders to occupy specified space within the building

Is a real estate license required to sell units in cooperatives

yes

Actual Notice

provided by physical possession

Constructive notice

achieved by recording documents in public records

Marketable, Merchantable or clear title to real property