chapter 17 records

respa

Real Estate Settlement Procedures Act- Required for mortgages on purchase of real estate. Prohibits kickbacks or unearned fees. Ensures consumers get important, accurate, and timely information about actual costs of settlement or closing transaction

For each transaction, the designated broker must have a transaction folder. The folder should contain ?

all of the documents that are relevant to the transaction, such as correspondence, a listing agreement, a purchase and sale agreement, a lease or rental agreement, any contract modifications, and settlement statements.

All records must be made available to _________ must and the designated broker provide copies to the _______.

auditors from the Department of Licensing, Director upon request.

A summary statement in a property management agreement is a ?

brief report on the property's financial status during a certain period of time, such as one month or one quarter. The brokerage must keep a copy of each statement in its files.

In transactions involving more than one brokerage firm, responsibility for handling the earnest money in compliance with the license law falls on the ?

brokerage firm of the licensee who first receives the check from the buyer.

earnest money checks should be made payable to the ?

brokerage firm, as licensed, not the individual broker.

The records for recent transactions must be kept at the ?

brokerage's main office or a licensed branch office.

trust funds usually must be placed in a brokerage firm's trust account by the end of the first banking day after a licensee receives the funds. However, the license law makes an exception to this rule for the ?

buyer's earnest money deposit.

Washington's Escrow Agent Registration Act allows a real estate licensee to act as the ?

closing agent for a transaction in which she is already representing one of the parties, if she is designated as the closing agent in the purchase and sale agreement. the agent can't charge an additional fee for closing the transaction (beyond the brokerage commission).

The license law includes a number of other rules for licensees involved in a sales transaction. A licensee must present all written _______......provide all parties with ______ copies......handle earnest ______......perform acts required by the purchase and sale agreement expeditiously......and make sure the _____. parties receive settlement _______.requirements.

communications (including offers and counteroffers), document, money appropriately, statements

A commission split between licensees working for the same brokerage firm must be handled by the ?

designated broker. The licensees can't just divide the money between themselves.

If the buyer's earnest money deposit is not in a form equivalent to cash, that fact must be ?

disclosed to the seller when the offer is presented, and it must also be expressly stated in the purchase and sale agreement. a promissory note is not considered the equivalent of cash, and neither is a post-dated check.

the designated broker must review the contracts of brokers with less than two years of experience, and the transaction folder should include ?

documentation of this review.

When clients or customers sign a document, it's the licensee's responsibility to provide ?

each signing party with a copy. Many document forms include multiple carbon copies, which makes this rule easy to comply with.

But in most transactions, the purchase and sale agreement directs someone other than the designated broker (usually the closing agent) to hold the check until closing. In this case, unless the agreement provides otherwise, the licensee must turn the buyer's check over to that other person by the ?

end of the first banking day after receiving it.

The licensee isn't required to prepare the statement; most statements are prepared by ?

escrow agents. However, it is a licensee's duty to make sure every party gets a statement.

This is usually the selling agent, who receives the earnest money check ?

from the buyer.

A licensee's intentional or negligent delay in performing duties may be ?

grounds for disciplinary action.

The license law specifies that a brokerage firm can't manage property unless it ?

has a written management agreement with the property owner. The property management agreement must be kept in the brokerage firm's records.

a brokerage may also pay compensation to its own affiliated licensees. On the other hand, a brokerage may not pay a licensee who's ?

licensed to work for another firm.

In order to sue for a commission, licensees must be able to prove they were ?

licensed when they performed or offered to perform any service for which a real estate license is required. This requirement applies to lawsuits filed by one licensee against another, as well as to lawsuits filed against a client.

A licensee or firm may also pay a referral fee to an unlicensed person in exchange for referring a potential customer or client. Payment of such a fee would violate ?

neither RESPA nor the license law.

Sometimes a purchase and sale agreement requires the real estate agent to perform certain acts, such as ?

opening escrow or ordering an inspection. The license law requires the licensee to perform any obligations imposed in the purchase and sale agreement as expeditiously as possible.

With the property owner's consent, the brokerage firm is allowed to provide ?

other services, such as maintenance services, for the property it's managing.

If someone submits an offer or counteroffer in writing, the licensee is required to ?

present it to her client, even if the licensee is certain that the client will or should reject it. It isn't up to the licensee to reject an offer that seems unacceptable.

Sometimes a licensee or firm pays another licensee or firm a fee for referring a potential customer or client. This sort of agent-to-agent referral fee does not violate the ?

prohibition of kickbacks and referral fees that is found in the federal Real Estate Settlement Procedures Act (RESPA).

Any written communication from one party to the other that a licensee receives must be passed along to the other party ?

promptly.

Each of the brokerage firms involved in a transaction (the listing brokerage and the selling brokerage) is required to keep a copy of the ?

purchase and sale agreement in its transaction folder.

A brokerage firm may share a commission with (or otherwise compensate) any ?

real estate brokerage licensed in the United States or Canada.

The designated broker also has to keep detailed trust account records. These should include ?

receipts, a check register, deposit slips, a ledger summarizing all receipts and disbursements for each transaction, reconciled bank statements, canceled checks, and so forth.

Records for transactions that have been closed for a year or more can be kept at a ?

remote storage facility in Washington.

The licensee is allowed to hold the earnest money check without depositing it for a ?

specific length of time or until a particular event occurs (for example, the seller accepts or rejects the offer) if that is what the purchase and sale agreement directs her to do.

The license law also requires a licensee to make sure that each party to a transaction receives a detailed settlement statement at closing—even if ?

the closing is being handled by someone else.

The firm must disclose to the owner in writing that the firm has an interest in the company that's providing this service, and must also disclose ?

the fees charged. Property managers should keep copies of these types of disclosures.

Under the license law, a designated broker is required to keep records concerning every transaction for at least ?

three years after closing (or if the transaction fails to close, for three years after it terminates).

License laws also regulate the payment of commissions. A brokerage firm can't collect a commission without a ? This requirement applies to lawsuits filed by one licensee against another, as well as to lawsuits filed against a client.

valid firm license.

When the property managed by a brokerage firm is rental property, the leases and rental agreements must be in ?

writing. Written leases and rental agreements should also be kept with the firm's records.

The law is very specific about what provisions must be included in the property management agreement, including: ?

• the firm's compensation, • the type of property to be managed, • the number of units or square footage, • the firm's authority to collect and disburse money, and • the dates when summary statements must be given to the property owner.