Chapter 5 Quiz

52. Which type of corporation is formed under common law principles for religious purposes? a. Cooperative Association b. Business trust c. Non-profit corporation d. Corporation Sole

d. Corporation Sole

17. A prospective tenant pays a licensee to find a rental. What percentage of the fee paid may the prospective tenant receive if the licensee provides inaccurate information? (a) 100% (b) 75% (c) 25% (d) 0%

(a) 100%

14. Which of the following is an approved depository for earnest money? (a) A bank within the state of Florida (b) A stock brokerage firm (c) A broker's personal checking account (d) A safe located in a real estate office

(a) A bank within the state of Florida

24. Four individuals 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? (a) All partners must be licensed as active brokers. (b) The partners are not required to have real estate licenses, but the profits must be distributed equally amongst all four partners. (c) The partnership must be registered with the Department of Business & Professional Regulation and at least one partner must be licensed as an active broker. (d) At least one partner must be licensed as an active broker and the others may be licensed as sales associates, or brokers.

(a) All partners must be licensed as active brokers.

33. Bob is a licensed sales associate, employed by broker Jerry. Jerry fails to pay Bob a commission, so Bob resigns and is hired by broker Sam. Bob decides to sue for his lost commission. Which of the following is accurate regarding this scenario? (a) Bob cannot bring a legal action for the claimed commission against anyone other than broker Jerry. (b) Broker Sam must sue broker Jerry for the commission due to Bob, since Bob is now employed by Sam. (c) Sam assumed responsibility for the unpaid commission when he employed Bob. (d) Bob may file a lis pendens against either Sam or Jerry for the commission due him.

(a) Bob cannot bring a legal action for the claimed commission against anyone other than broker Jerry.

20. 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? (a) Joint venture (b) Corporation (c) General partnership (d) Limited partnership

(a) Joint venture

27. What should a sales associate do if a purchaser wishes to present a post dated check? (a) Obtain approval from the seller and then turn the check over to the broker by close of business on the next business day. (b) Check with the broker to make sure the broker agrees with the payment. (c) Turn the check over to the broker by close of business the next business day. (d) Return the check to the purchaser and ask them for a new one with the correct date.

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

29. 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? (a) The broker may return the escrow money without notifying the FREC since the contract was subject to financing. (b) The agent should check with FREC before disbursing any money. (c) The Broker may return the money provided there was a rescission period also documented in the Sales Contract. (d) Escrow money is always nonrefundable.

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

2. Six individuals decide to form a real estate brokerage partnership. All six individuals are planning to be active in real estate sales. Which statement best applies? (a) The partnership must be registered with the Commission, and all six partners must be active real estate brokers. (b) At least one partner must be licensed as an active broker. (c) Only two partners must have a real estate license. (d) A partnership cannot be formed as a brokerage business.

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

6. If a sales associate receives a post-dated check, which of the following actions is the most appropriate? (a) The sales associate should deliver the check to her employing broker by the end of then next business day. (b) The sales associate should refuse to submit the offer without a cashier's check. (c) The sales associate should hold the check, and give the check to her employing broker when it becomes valid. (d) The sales associate should cash the check, and deposit the funds into her broker's escrow account.

(a) The sales associate should deliver the check to her employing broker by the end of then next business day.

23. In which of the following institutions may a broker place escrow deposits? (a) Title companies, banks, savings and loan associations, and credit unions (b) Mortgage companies, savings and loan associations, finance companies, and credit unions (c) Insurance companies, savings and loan associations, credit unions, and title companies (d) Stock brokers, finance companies, banks, savings and loan associations, and mortgage companies

(a) Title companies, banks, savings and loan associations, and credit unions

21. Which statement regarding the registration of real estate branch offices is true? (a) A broker may conduct business from more than one unregistered office as long as the principal office is registered with the DBPR. (b) A brokerage branch office may be closed and reopened at the same location during the same license period by requesting a reissue. (c) When a registered branch office is moved, a fee must be paid, but a new application for registration is not required. (d) A temporary shelter must always be registered as a branch office.

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

1. A sales associate licensed with a real estate brokerage corporation can be which of the following? (a) An officer (b) A stockholder (c) A director (d) An officer and a director

(b) A stockholder

7. Which of the following statements regarding an ostensible partnership is correct? (a) An ostensible partnership is required to file documents with the Secretary of State. (b) An ostensible partnership is not a true partnership. (c) An ostensible partnership cannot be created by real estate brokers. (d) An ostensible partnership will not be treated as though the participants were partners.

(b) An ostensible partnership is not a true partnership.

31. 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? (a) Mediation (b) Arbitration (c) Interpleader (d) Escrow Disbursement Order

(b) Arbitration

15. What must a real estate sales associate do upon receiving an earnest money deposit? (a) Deposit the funds in an insured bank account. (b) Deliver the funds to his or her broker or owner-developer. (c) Deposit the funds in an escrow account. (d) Deposit the funds with the Florida Real Estate Commission.

(b) Deliver the funds to his or her broker or owner-developer.

30. Which business organization can legally register as a real estate brokerage? (a) Corporation Sole (b) General Partnership (c) Ostensible Partnership (d) Joint Venture

(b) General Partnership

8. Who has the right to inspect a broker's escrow account records? (a) The parties to a real estate transaction (b) The Department of Business and Professional Regulation or its authorized representatives (c) The state Attorney General (d) A public defender

(b) The Department of Business and Professional

3. Which of the following statements is correct regarding a licensed broker associate who is with a real estate brokerage partnership? (a) The broker associate may be a member of the partnership. (b) The broker associate may make earnest money deposits with the broker's permission. (c) The broker associate must hold an active broker's license. (d) The broker associate may not provide real estate brokerage services to others.

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

13. A real estate brokerage firm advertises a listed property. Which requirement is correct? (a) The name of at least one sales associate must be included in the ad. (b) The name of the brokerage must be included in the ad. (c) The ad may not be prepared by sales associate. (d) The names of sales associates may not be included in the ad.

(b) The name of the brokerage must be included in the ad.

4. All of the following business formations can register to conduct real estate transactions, EXCEPT: (a) Corporation for profit (b) Not-for-profit corporation (c) Corporation sole (d) Limited partnership

(c) Corporation sole

9. All of the following businesses are required to file documents with the state, EXCEPT: (a) Corporation for profit (b) Not-for-profit corporation (c) Corporation sole (d) Cooperative association

(c) Corporation sole

11. Which statement best describes the office sign requirements for a brokerage office? (a) Only one sign per firm is required regardless of the number of offices. (b) Each sales associate associated with the firm must have a separate sign. (c) Every active broker must maintain a sign at each brokerage office or branch office. (d) Office signs are permitted but not required by law.

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

22. Where may a real estate brokerage office be located? (a) A residential neighborhood which prohibits commercial properties (b) In a motorhome (c) In at least one room in a fixed location wherein books and records may be retained and negotiations may be conducted (d) In a broker's car

(c) In at least one room in a fixed location wherein books and records may be retained and negotiations may be conducted

26. Which business structure may be registered to broker real estate? (a) Trust (b) Joint venture (c) Limited partnership (d) Unincorporated association

(c) Limited partnership

28. Which of the following escrow dispute settlement procedures involves the use of Interpleader? (a) Broker asks FREC for an Escrow Disbursement Order (b) Mediation (c) Litigation (d) Arbitration

(c) Litigation

16. What action should a broker take if a commission dispute arises prior to closing? (a) Return the deposit to the buyer or seller based on which party asks for it first. (b) Withdraw the amount of the commission from the escrow account. (c) Retain the exact amount of the disputed commission in the escrow account until the dispute is settled. (d) Distribute the escrow funds according to the directions of the company attorney.

(c) Retain the exact amount of the disputed commission in the escrow account until the dispute is settled.

18. Three individuals decide to open a real estate brokerage office. Which statement best describes the legal requirements? (a) Sales associates are not permitted to own stock in the entity. (b) All sales associates, broker associates, and brokers who are registered with the firm must be either officers or directors. (c) If a sales associate wishes to be an officer or director, his or her license must be placed on inactive status. (d) At least one officer must be an active broker.

(d) At least one officer must be an active broker.

25. A business legally formed and registered as Rich Real Estate, Inc. is considered to be what type of organization? (a) Joint venture (b) Limited partnership (c) General partnership (d) Corporation

(d) Corporation

19. 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? (a) The following Monday. (b) Wednesday. (c) Thursday. (d) Friday.

(d) Friday.

34. Which of the following does a broker need to have by law? (a) Telephone (b) Desk (c) Checking account (d) None of the above

(d) None of the above

5. If a broker has conflicting demands on money held in escrow, what is the first thing the broker should do? (a) Consult with a real estate attorney who is experienced in handling escrow problems. (b) Refer the parties to FREC. (c) Give the escrow money to the closing agent. (d) Notify the Florida Real Estate Commission in writing.

(d) Notify the Florida Real Estate Commission in writing.

12. All of the following are authorized alternatives for a broker to use in order to resolve an escrow dispute, EXCEPT: (a) Seek an escrow disbursement order from the Commission. (b) Submit the escrow dispute to mediation or arbitration. (c) Seek a court decision to resolve the escrow dispute. (d) Obtain an attorney's opinion.

(d) Obtain an attorney's opinion.

10. Which condition would require a location to be registered as a brokerage branch office? (a) Tables and chairs are provided for sales associates and customers. (b) The location is used as a shelter to get out of the sun or rain. (c) Literature which contains the broker's office address is handed out. (d) Sales associates are permanently assigned to the location.

(d) Sales associates are permanently assigned to the location.

32. If a real estate licensee is involved in a personal real estate transaction, which of the following would be correct? (a) The licensee must disclose his or her license status in any advertising. (b) The licensee must disclose the license status on any yard sign using terminology such as "owner agent." (c) The licensee is not required to disclose his or her license status in a personal transaction. (d) The licensee should disclose his or her license status prior to entering into any serious negotiations.

(d) The licensee should disclose his or her license status prior to entering into any serious negotiations.

51. In a real estate brokerage corporation, in the event that a corporation has one active broker, and the broker dies, resigns, or is otherwise removed from the position, the vacancy must be filled within how many days? a. 14 calendar days b. 15 days c. 10 calendar days d. 30 days

a. 14 calendar days

46. The broker must return the escrow deposit to a potential buyer in the resale of a residential condominium? a. 3-day rescission period b. 5- day rescission period c. can keep the escrow deposit d. None of the above

a. 3-day rescission period

45. What are the four dispute settlement procedures called MEAL? a. Mediation, Escrow Distribution Order, Arbitration, and Litigation b. Mediation, Estimate Property Fees, Arbitration, and Litigation c. Mediation, Estimate Property Fees, Arbitration, and Legal d. Mediation, Escrow Distribution Order, Arbitration, and Legal

a. Mediation, Escrow Distribution Order, Arbitration, and Litigation

35. A broker is required to have a sign on or about the entrance to the office. a. True b. False

a. True

36. May a sales associate or broker associates appear in an ad in additional to the registered name of the brokerage. a. True b. False

a. True

47. In a rental written contract, if the rental information provided under this contract is not current or accurate in any material aspects, you may demand within how many days of this contact date a return of your full fee paid? a. 15 days b. 30 days c. 60 days d. 120 days

b. 30 days

43. A broker's book and records must be preserved: a. 1 year from the date escrow funds were received by the broker. b. 5 years from the date escrow funds were received by the broker c. 10 years from the date escrow fund were received by the broker d. None of the above

b. 5 years from the date escrow funds were received by the broker

50. Any resident licensee who becomes a non-resident must notify the commission of the change in residency within how many days and comply with non-residence requirements: a. 30 days b. 60 days c. 10 days d. 5 days

b. 60 days

44. How many years do the records have to be preserved by the broker if any transaction records have been the subject of, or has served as evidence in, litigation? a. At least 1 year after conclusion of the litigation. b. At least 2 years after conclusion of the litigation c. At least 5 years after conclusion of the litigation d. At least 10 years after conclusion of the litigation

b. At least 2 years after conclusion of the litigation

40. The misuse, commingling or intermingling of, or failure to account for funds or property entrusted to any licensee is known as: a. Earnest money b. Conversion c. Escrow account d. Conflict of interest

b. Conversion

38. How much personal money may a broker maintain in a sales escrow account? a. Up to $500 b. Up to $1,000 c. Up to $5,000 d. None

b. Up to $1,000

41. A sales associate or broker associate who receives an earnest money deposit on behalf of his or her employer must deliver the deposit to the employer no later than: a. no later than the end of the day b. no later than the end of the next business day c. no later than 5 days d. none of the above

b. no later than the end of the next business day

49. A sales associates or broker associate must report any change of employer or change of address within how many days of the change to the Department: a. 30 days b. 15 days c. 10 days d. 5 days

c. 10 days

37. What is a blind add? a. Is an add not referencing the advertiser b. An ad for blind services c. Any real estate advertiser that does not contain the registered or trade name of the broker d. All of the above

c. Any real estate advertiser that does not contain the registered or trade name of the broker

48. Rental information violations are considered to be___________________. a. Misdemeanor of the 3rd degree, punishable by up to 5 year of imprisonment and/or a fine up to $10,000. b. Misdemeanor of the 2nd degree, punishable by up to 5 year of imprisonment and/or a fine up to $5,000. c. Misdemeanor of the 1st degree, punishable by up to 1 year of imprisonment and/or a fine up to $1,000. d. Misdemeanor of the 1st degree, punishable by up to 1 year of imprisonment and/or a fine up to $5,000.

c. Misdemeanor of the 1st degree, punishable by up to 1 year of imprisonment and/or a fine up to $1,000.

39. How much personal money may a broker maintain in a property management escrow account? a. Up to $500 b. Up to $1,000 c. Up to $5,000 d. None

c. Up to $5,000

42. A broker must "immediately" place the earnest money deposit in an escrow or trust account. How is "immediately defined: a. no later than the end of the day b. no later than 5 days c. no later than the end of the next business day d. no later than the end of the third business day

d. no later than the end of the third business day