Chapter 5

20. Three individuals decide to open a real estate brokerage office. Which statement best describes the legal requirements?

At least one officer must be an active broker.

9. Which statement best describes the office sign requirements for a brokerage office?

Every active broker must maintain a sign at each brokerage office or branch office.

24. Which business structure may be registered to broker real estate?

Limited partnership

30. Which of the following escrow dispute settlement procedures involves the use of Interpleader?

Litigation

21. A business legally formed and registered as Tropical Paradise Realty, Inc. is a:

corporation.

14. What action should a broker take if a commission dispute arises prior to closing?

...

15. What percentage of the fee paid may a prospective tenant receive as a refund when provided with inaccurate information?

100%

12. Which of the following is an approved depository for earnest money?

A bank within the state of Florida

17. Where may a real estate brokerage office be located?

A brokerage branch office may be closed and reopened at the same location during the same license period by requesting a reissue.

36. There is a dispute over an escrow deposit. The parties agree to have a 3rd party hear both sides and make the final decision. What settlement (escape) procedure is being used to settle the dispute?

Arbitration

22. 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?

By forgetting to collect the deposit, the sales associate may cause harm to the seller, and could be charged with culpable negligence.

4. Which of the following forms of business CANNOT register to conduct real estate transactions?

Corporation sole

7. Which business is NOT required to file documents with the state?

Corporation sole

27. What may a real estate sales associate or broker who does not pay attention to detail and causes harm to another be charged with?

Culpable negligence

34. A buyer has agreed to purchase the seller's home. The contract calls for a deposit of $10,000, to be placed in the broker's escrow account. The sales associate forgets to collect the deposit. The sale falls through and the seller is claiming the uncollected deposit as liquidated damages. What will the sales associate likely be charged with?

Culpable negligence.

13. What must a real estate sales associate do upon receiving an earnest money deposit?

Deliver the funds to his or her broker or owner-employer

28. A buyer drops off an escrow check on Tuesday. To avoid any trouble with FREC, the broker must deposit the check by close of business on which day?

Friday.

35. Which business organization can legally register as a real estate brokerage?

General Partnership

18. In which of the following institutions may a broker place escrow deposits?

Insurance companies, savings and loan associations, credit unions, and title companies

5. Which of the following statements regarding an ostensible partnership is correct?

It is not a true partnership.

25. 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?

Joint venture

26. If a broker has conflicting demands on money held in escrow, what is the first thing the broker should do?

Notify the Florida Real Estate Commission in writing.

10. Which method is NOT an authorized alternative for a broker to use in order to resolve an escrow dispute?

Obtain an attorney's opinion

29. What should a sales associate do if a purchaser wishes to present a post dated check?

Obtain approval from the seller and then turn the check over to the broker by close of business on the next business day.

6. Who has the right to inspect a broker's escrow account records?

The Department of Business and Professional Regulation or its authorized representatives

3. Which of the following statements is correct regarding a licensed broker associate who is with a real estate brokerage partnership?

The broker associate may make earnest money deposits with the broker's permission.

33. A Sales Contract contains a contingency which states "this contract is contingent upon the buyer receiving 80% financing with an interest rate not to exceed 6% and a 30 year term." The buyer applied for financing and was turned down by three different lenders, resulting in his/her inability to close on the transaction. The seller is claiming breach of contract. Which statement is correct concerning the escrow deposit?

The broker may return the escrow money without notifying the FREC since the contract was subject to financing.

37. If a real estate licensee is involved in a personal real estate transaction, which of the following would be correct?

The licensee must disclose his or her license status prior to entering into any serious negotiations.

2. Six individuals decide to form a real estate brokerage partnership. All six individuals are planning to be active in real estate sales. Which of the following statements best applies?

The partnership must be registered with the Commission, and all six partners must be active real estate brokers.

19. A, B, C, and D 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?

The partnership must be registered with the Department of Business & Professional Regulation and at least one partner must be licensed as an active broker.

23. If a sales associate receives a post-dated check, which of the following actions is the most appropriate?

The sales associate should immediately give the check to her employing broker.

32. A residential developer offers a contest whereby each individual who tours a model home receives a treasure box key. If the key opens the door to a model, the individual wins the home. Which of the following statements is correct?

This promotional program is permissible since no purchase was required.

1. Complete the statement. A sales associate licensed with a real estate brokerage corporation can be:

a stockholder.

31. When asked about the size of a home, the sales associate quoted the home as containing 5,300 square feet of living area. In reality the home was only 4,300 square feet. This is an example of:

misrepresentation.

8. Complete the statement. A location would be required to register as a brokerage branch office if:

sales associates are permanently assigned to the location.

11. Complete the statement. When a real estate brokerage firm advertises listed property, ________.

the name of the brokerage must be included.