Unit 9 - Employment Issues

You have just placed your license with ABC Realty. On the first day, you are handed a schedule of "floor duty" times and told to write down when you are available to do this work. The expectation is that you will do this for two hours on the weekend and four hours during the week. You are then told about the Thursday morning meetings. These meetings are to update the broker on the week's production, to listen to guest speakers, and to participate in training sessions. While not mandatory, attendance is "strongly encouraged." Finally, there is a picture of the "perfect agent" hanging on the wall—a white male professionally dressed standing next to a luxury car. You've signed an independent contractor agreement with ABC Realty, but you are not feeling very independent right now. What should the broker do to align the practices of his brokerage with sales agents who must be treated as independent contractors? A) Take down the sign because it contains a not-so-subtle hint of the appearance expected (and may also violate fair housing laws) B) Make "floor duty" a voluntary "opportunity time" C) All of these D) Make the weekly meetings optional and interesting and valuable enough so that salespeople will come without being pressured

All of these

A broker assists his friend in purchasing real estate from a seller. The broker does not disclose his friend's identity at his friend's request. Which of the following is a consequence for his failure to disclose such information if he also represents the seller in the transaction? A) He can be considered to be the principal. B) All of these. C) He can be accused of unlawful dual agency. D) He could lose his license for acting as an undisclosed principal.

All of these.

Which of the following acts supports a case that a person is an independent contractor rather than an employee? A) The person is reimbursed for his own business expenses. B) Federal income taxes are not withheld for the person. C) The person gets health insurance, vacation, and sick pay. D) The person is paid a wage or salary.

Federal income taxes are not withheld for the person.

Which of the following acts supports a case that a person is an employee rather than an independent contractor? A) The person obtains his own training for the work. B) The person is not reimbursed for his own business expenses. C) The person is paid a flat fee for their work. D) Federal income taxes are withheld for the person.

Federal income taxes are withheld for the person.

For a broker to bring suit against a consumer to recover compensation, TRELA requires the broker to show proof A) that the broker's license was active at the time services began. B) of all of these. C) that a buyer was advised to check title prior to signing the sales contract. D) that the consumer signed a written agreement to compensate.

of all of these.

The broker may NOT share commissions with other brokers who are acting as buyer-brokers. True False

False

The broker must deduct Social Security taxes and federal income tax from the commission proceeds before paying the independent contractor. True False

False

Lena is a broker associated with Yokohama Realty. She holds which license? A) Broker associate license B) Sales agent license C) Broker's license D) Associated broker's license

Broker's license

Sam works at a brokerage firm. She is paid an hourly wage and must work from nine to five. Which of the following would Sam be considered? A) An employee B) An aide C) An assistant D) An independent contractor

An employee

A broker of one company representing a principal and a broker of another company acting as a subagent in the same transaction have what type of relationship? A) Arm's-length B) Neutral C) Arm around D) Intermediary

Arm around

Sales agents sponsored by one company function in what type of relationship with sales agents sponsored by another company if the sales agents are each acting on behalf of their own broker? A) Arm's up B) Arm's-length C) Arms together D) Arm around

Arm's-length

When is a person obligated to pay the broker's fee under the terms of the TAR buyer/tenant agreement? A) After the buyer/tenant agreement is signed by both the broker and the buyer B) Three days after the buyer and seller execute the TREC-promulgated sales contract C) When the broker's fee is earned and payable D) At the closing of the contract where the buyer purchases the property

At the closing of the contract where the buyer purchases the property

Selma is a broker associated with Best Realty. She leads a team called Selma's Team. What is required of Selma or Best before she starts using the team name on her website? A) Selma must file the team name with TREC. B) Selma must submit the team name to TREC for preapproval. C) Best must submit the team name to TREC for preapproval. D) Best must file the team name with TREC.

Best must file the team name with TREC.

John and Miranda both work for Liverpool Realty. John is told to make copies of files, file the records in the records room, and answer the phone for the office, in that specific order. Miranda's job is to be an assistant to two brokers from 10 -2, open homes for home inspections, and deliver records to title companies and other brokerage firms. Which of the following is TRUE regarding their status as employees or independent contractors? A) John would probably be considered an independent contractor and Miranda an employee. B) Both would probably be considered employees. C) Both would probably be considered independent contractors. D) John would probably be considered an employee and Miranda an independent contractor.

Both would probably be considered employees.

TREC regulates the broker's contractual arrangements with other brokers. True False

False

Of the following, which acts can a licensed sales agent engage in without the supervision of a broker? A) Opening her own offices without a designated broker B) Buying or selling her own property C) Move her listings to a new sponsoring broker's office D) Listing property in her own name

Buying or selling her own property

Texas brokers may NOT pay a commission to a broker who is licensed in another state. True False

False

Irma, a nonlicense holder, inherits a large sum of money. Her husband, Danny, is an associate broker with Honshu Realty. Irma agrees to finance her husband's dream of opening his own brokerage office under the condition that she be a co-owner of the business and that 75% of the monthly net income be deposited to her separate checking account. Which statement is TRUE? A) TRELA would prohibit Danny from paying a fee to Irma because she is not licensed. B) Danny could pay the fee but only if no single deposit exceeded $50 in value. C) Danny could pay the fee as long as Irma does not perform any brokerage activities. D) Danny could pay the fee but only if it was deposited to the joint checking account to avoid the perception that he was paying a nonlicense holder.

Danny could pay the fee as long as Irma does not perform any brokerage activities.

A personal assistant must hold a real estate license. True False

False

A sales agent may engage in real estate activities while holding a license in inactive status. True False

False

An unlicensed person who owns all or part of a real estate company may NOT share in income earned by the company that resulted from commissions. True False

False

It is illegal in Texas for a broker to represent a buyer or a seller on the basis of an oral agreement. True False

False

Multiple listing service (MLS) listings all carry a mandatory offer of subagency. True False

False

A broker wishes to purchase property for his own account from a seller. What should the broker do? A) He should purchase the property under an assumed name. B) He is required to disclose that he is a license holder acting on his own behalf. C) He should purchase the property using a shell company. D) He must provide a BPO to the seller in all cases.

He is required to disclose that he is a license holder acting on his own behalf.

Harry Chambers helped buyers Hugh and Betty Flint find their dream home. At closing, Harry and the Flints learned how antagonistic the relationship between the seller and his broker had become. The seller, who attended the closing with his attorney, declared that his broker "did little to market this property. I should have made $100,000 more." Then he turned to his attorney and said, "I want you to do everything you can to make sure he does not get a dollar in commission." If the owner refuses to pay commission to his broker, what will happen to the other broker's commission? A) He will receive his commission from buyers. B) He will automatically be paid by the sellers. C) He can be paid. D) He may not receive a share of the commission.

He may not receive a share of the commission.

Broker Nelson Forbes wants to sue a seller-client because he was not paid his commission. Which of the following must Forbes prove to bring suit? A) He was a licensed broker at the time the brokerage services began. B) He has financial obligations to share the commission that has been withheld. C) All parties that would be charged the commission signed the written agreement. D) He reviewed the legal aspects of the sales contract with the seller.

He was a licensed broker at the time the brokerage services began.

George is a broker for company A representing a seller under a listing agreement. Sam is a broker for company B. If George and Sam have an arm around relationship in the same transaction, what type of agency relationship do they have? A) Dual agency relationship B) Nonagency relationship C) Subagency relationship D) Intermediary agency relationship

Subagency relationship

Jamison works as a Goliath Realty licensed assistant. Jamison does many things for the brokerage firm, including showing properties, meeting with clients on behalf of brokers, and a variety of other things depending on the work that gets assigned to him on a weekly basis. Jamison is paid by each of the license holders for whom he does work, and sometimes Goliath pays him on the books. Is Jamison an employee or an independent contractor? A) He is an independent contractor because his work is assigned. B) He is an employee because Goliath and other license holders pay him for his work. C) He is an independent contractor because he has a real estate license. D) It cannot be determined from the facts presented.

It cannot be determined from the facts presented.

What is an independent contractor agreement used for in the real estate profession? A) It is an employment agreement between a sales agent and a buyer. B) It is generally an employment contract between a broker and a sales agent. C) It is a professional services agreement between a landlord and tenant. D) It is an employment agreement between a sales agent and a seller.

It is generally an employment contract between a broker and a sales agent.

Tom Smith, a sales agent who is an independent contractor with ABC Realty, has been told that his "floor time" is between 9 am and 10 am on Saturday mornings. Should Tom comply with this directive? A) Yes, Tom should comply because he wants to pick up a few more buyers and he is really good at converting inquiries about listings into buyers. B) No, he should refuse to comply because he does not want to jeopardize his independent contractor status. C) No, he should refuse to comply because he doesn't like being told what to do. D) Yes, Tom should comply because he doesn't want to make his broker angry.

No, he should refuse to comply because he does not want to jeopardize his independent contractor status.

Angela has decided to move to a different sponsoring broker. She has indicated to her current sponsoring broker that she has every right to take her listings with her; after all, she is the one who solicited the listings. Is Angela's understanding of the law correct? A) Yes, as long as a TAR professional standards panel agrees with her conclusion. B) Yes, she solicited and negotiated the listings. C) No, the listings belong to the broker. D) No, the listings must be interplead into a court registry to determine who they belong to.

No, the listings belong to the broker.

Which of the following forms is a broker required to use when entering into a contract with a sales agent? A) The TREC independent contractor agreement B) An independent contractor agreement created by the broker's attorney C) The TAR independent contractor agreement D) None of these

None of these

Sebastian is an unlicensed assistant who works at AAA Realty. He provides assistance to a team of sales associates at the firm, including unlocking doors for prospective buyers. Which of the following is TRUE regarding this activity? A) Opening a door is considered administrative or support work that does not require a real estate license. B) An unlicensed assistant can only engage in clerical work, otherwise, the activity would require a license. C) Opening a property for any reason is considered brokerage activity that requires a real estate license. D) Opening a door for a prospective buyer is considered showing a property, which requires a real estate license.

Opening a door for a prospective buyer is considered showing a property, which requires a real estate license.

MLS systems offer which of the following types of agency to participants? A) Nonexclusive seller agency B) Mandatory buyer agency C) Mandatory subagency D) Optional subagency

Optional subagency

Attorney Eric Page received compensation from the sale of the White Ridge Ranch. In which of the following ways would the compensation to Page have been permissible? A) Paid directly by the seller. B) Paid from the listing agent's commission. C) Paid by the listing agent's subagent. D) Paid from the seller's agent's commission.

Paid directly by the seller.

Which of the following sets of words are used to describe the buyer that a broker must produce in order to earn a fee under a listing agreement? A) Qualified, solvent, and financed B) Interested, invested and moveable C) Ready, rich, and reliable D) Ready, willing, and able

Ready, willing, and able

An agent spends his own money to pay the monthly internet bill for the broker's office while the broker is out of the country. The broker pays the agent for the cost of the bill when he returns. This is an example of which of the following? A) Indemnification B) Reimbursement C) Performance D) Compensation

Reimbursement

Which of the following acts requires a real estate license? A) Accompanying a home inspector B) Setting appointments to show a house C) Placing for sale signs at a property D) Showing property

Showing property

George Lender is the broker operating a real estate office. George employs three associate brokers and two sales agents, and one assistant. Who in Lender's office can hold a listing? A) George Lender, the three associate brokers, and the two sales agents B) George Lender and the three associate brokers C) Anyone in the office D) George Lender

The answer is George Lender. Listings are made in the name of the broker, not the sales agent or the broker associate. An unlicensed assistant cannot have a listing.

Which of the following is not an example of performance in a contract between a broker and a sales agent? A) The broker paying the agent for the agent's acts on behalf of the broker B) The broker providing information to the broker's agent C) The broker being available to the broker's agent D) The broker providing business guidance to the broker's agent

The broker paying the agent for the agent's acts on behalf of the broker

A broker may NOT share a commission with nonlicensed parties. True False

True

For a broker to bring a suit for a commission, the compensation agreement must be in writing and signed by the party being charged the commission. True False

True

Licensed sales agents may NOT lawfully sell their services directly to the public. True False

True

Licensed sales agents may NOT legally hold a license under more than one broker at the same time. True False

True

The broker is responsible for the acts and conduct of all sponsored sales agents during the ordinary course of employment. True False

True

To preserve an independent contractor status for a real estate license holder, there must be a written contract. True False

True

You are a new license holder who is offered two choices by your broker—you may select either a commission schedule with a 50/50 split of every commission dollar you generate, with the amount retained by the broker to be used for profit and for all your office and administrative expense and fees; or a commission schedule with an 80/20 split of every commission dollar you generate, with you paying $500 per month to cover your office and administrative expense. You decide to take the first option because you believe it is the best one at this point in your career. This is the best choice at this point in your career. True False

True

Which of the following must a broker provide to associate brokers who work as independent contractors? A) Workers' compensation coverage B) Regular salary C) Written contract D) Medical benefits

Written contract

You are a licensed sales agent and are approached by your friend who owns several single-family rental homes. The day-to-day management and maintenance of the properties, the screening and selection of tenants, and the collection of rents is interfering with his regular job and he needs help fast. He approaches you about managing these properties. He will pay you $50 per home per month (he has six homes) to perform these management functions. The $300 extra income per month sounds great to you! What will need to be done to make this arrangement work? A) You will need to contact your attorney to draft a property management agreement between you and your friend because these services should not be performed based on an oral contract. B) You are being asked to do too much work for too little money; you should negotiate for a higher fee. C) You will need to open a trust account to handle the security deposits and rents because you cannot commingle these amounts with the income you earn. D) You cannot do this in your name; it is a real estate service that must be done in your broker's name. You should contact your broker in order to proceed.

You cannot do this in your name; it is a real estate service that must be done in your broker's name. You should contact your broker in order to proceed.

Broker Carlos has a problem agent—Sam. Sam is Carlos's highest producer, breaking all sales records and generating a large commission income every month for Carlos's business. But Carlos is very concerned about Sam's behavior. Carlos has evidence that Sam is sharing Carlos's trade secrets with Carlos's competitors and is not informing Carlos of all the issues that arise in the transactions he closes. He is particularly concerned about the amount of business that Sam places with lender Lori and some of the creative financing that Lori and Sam suggest for some of the brokerage's clients who have difficulty qualifying for a conventional or FHA loan. If Carlos's suspicions are correct, Sam is violating all of the following fiduciary duties to his broker-principal EXCEPT A) loyalty. B) disclosure. C) accounting. D) confidentiality.

accounting.

Susan is a broker associate with Highland Realty, where she specializes in residential property management. Jerry is the principal broker. Unless prohibited by her contract with Jerry, Susan could A) open a trust account in her own name for rental monies. B) do all of these. C) pay a referral fee directly to another broker. D) place an ad without mentioning Jerry's name.

do all of these.

Debbie is the designated broker for Shetland Realty. She counsels Jenny, a sales associate, that Jenny must stop wearing miniskirts to work, start attending all sales meetings, be at her desk Monday through Friday by 9:00 am, and sign up for two Saturday duties every month. Debbie is jeopardizing Jenny's A) independent contractor status. B) sales agent's license. C) REALTOR® Code of Ethics. D) civil rights.

independent contractor status.