Contracts & Regulations 1 Test
What kind of license must be held to sell options in real estate? A: An Associate Broker's license B: An Options License C: A Securities License
A: An Associate Broker's license Under statute 12-61-101, the sale of options in real estate requires a real estate (Associate Broker) license. More about real estate options: A real estate purchase option is an agreement on a specific property that allows the buyer the exclusive right to purchase the property for a set period of time, without an obligation to buy. The buyer purchases the option from the seller for a fee. Regardless of whether the buyer purchases the property or allows the option to expire, the seller keeps the fee. The option usually includes a set purchase price and is valid for a short term, such as six months to a year.
From whom does the licensee receive a commission? A: Employing Broker B: Seller C: Buyer D: Either 2 or 3 may pay a commission to the licensee
A: Employing Broker § 12-61-117, C.R.S. Broker remuneration. It is unlawful for a real estate broker registered in the commission office as in the employ of another broker to accept a commission or valuable consideration for the performance of any of the acts specified in this part 1 from any person except the broker's employer, who shall be a licensed real estate broker. Reference§ 12-61-117, C.R.S. Broker remuneration
With regard to Colorado real estate licensees: A: If an associate broker uses her home as her office, her license should be in her home B: An associate broker's license should be in his/her broker's office C: It must be in the county in which they live D: Cannot sell property unless they have a county real estate license
B: An associate broker's license should be in his/her broker's office An associate broker's license must always be in his/her broker's office.
If an employing broker (AKA sponsoring broker) moves his place of business without advising the Real Estate Commission: A: His license is inactivated but not licensees working for him B: His license and all associate brokers working for him are inactivated C: The licenses of all associate brokers under him are inactivated
B: His license and all associate brokers working for him are inactivated We have various questions floating around related to what happens when a broker fails to notify the real estate commission of a business address change. Any licensee who does not notify the Commission of an address change will have their license inactivated. When the licensee is also the mama or poppa bear of the office (the employing or sponsoring broker) the penalty goes up. Since an employing broker with an inactive license cannot have licensees reporting to him/her AND a licensee who is not independent cannot have an active licensee without reporting to an employing broker - the effect is catastrophic. Everybody's license in the office is inactive. Here are the applicable statues: From chapter in real estate manual on License Law § 12-61-109, C.R.S. Change of license status - inactive - cancellation. (1) Immediate notice shall be given in a manner acceptable to the commission by each licensee of any change of business location or employment. A change of business address or employment without notification to the commission shall automatically inactivate the licensee's license. § 12-61-110, C.R.S (5) The suspension, expiration, or revocation of a real estate broker's license shall automatically inactivate every real estate broker's license where the holder of such license is shown in the commission records to be in the employ of the broker whose license has expired or has been suspended or revoked pending notification to the commission by the employed licensee of a change of employment.
Which of the following statement(s) is (are) true? A: New real estate licenses expire at midnight on December 31st of the year they are issued B: Licenses are renewed for three year periods C: Licenses renew one year after you pass the state exam D: Employing broker licenses are for five years
B: Licenses are renewed for three year periods Licenses are renewable three years from your date of acquiring your license.
Which of the following would normally be a reason for suspension or revocation of a real estate license? A: Charging more than a regular commission B: Offering a property for sale on terms or at a price other than stipulated by the owner C: Holding only one open house during a six month listing period D: Not selling the property within the listing time period
B: Offering a property for sale on terms or at a price other than stipulated by the owner Anti-trust laws prohibit "standard," "average," "regular," or "going rate" commissions. Offering a property for more or less than the seller wants is a violation of license law.
Which of the following is required to have a real estate license? A: Resident manager of an apartment building B: Property manager specializing in handling buildings in commercial districts C: A salesperson working in a builder's office
B: Property manager specializing in handling buildings in commercial districts A licensee is someone who offers real estate services to the public. A resident manager of an apartment building, who is employed by the owner and does not negotiate leases, does not need a real estate license as he/she is considered to be an extension of the owner and is not offering his/her services to the public. Salespersons working for a home builder or any developer, although they are often not salaried and work for commission, are specifically excluded from needing a real estate license by State law. A property manager managing multiple properties, owned by different owners, is clearly offering his/her services to the public and requires a real estate license.
An associate broker terminates with a broker. The employing broker (AKA sponsoring broker) refuses to turn the license over to the Commission. Which of the following is true? A: Automatic fine for the Employing Broker B: The Employing Broker may be subject to disciplinary action C: Employing broker's license is immediately suspended D: Both associate and employing brokers may have their licenses canceled
B: The Employing Broker may be subject to disciplinary action There is never automatic fines or suspensions; there is always a hearing first. A broker who refuses to return an agent's license to the commission may be subject to disciplinary action.
What can the Real Estate Commission do with a broker's license after one of his licensees has had his license revoked or suspended? A: The brokers license is automatically suspended until a hearing can be held B: There must first be a hearing to determine if the broker had knowledge, or did not properly supervise the associate broker prior to suspension or revocation of his license C: The broker's license is immediately revoked D: Nothing can be done to the employing broker
B: There must first be a hearing to determine if the broker had knowledge, or did not properly supervise the associate broker prior to suspension or revocation of his license Should there be a question of improper supervision on the part of the employing broker then the real estate commission would have to hold a hearing before any disciplinary action could be taken.
The Colorado Real Estate Commission can investigate a licensee in all cases except: A: improper supervision by a managing broker B: not cooperating with a broker in the MLS C: when a valid complaint is received
B: not cooperating with a broker in the MLS Disputes between brokers, cooperating through the MLS a (Multiple Listing Service), are resolved through mediation at the Association of Realtors or in the courts.
An ad in the newspaper must appear under the name of: A: the branch office B: the brokerage firm C: the listing licensee D: none of the above
B: the brokerage firm All advertising must contain the name of the brokerage firm.
What is the purpose of the real estate commission in Colorado? A: to provide mediation in disputes between brokers and Colorado residents B: to protect the public C: to assure that licensees collect commissions in accordance with the law D: to provide legal assistance to the public regarding real estate transactions
B: to protect the public The function of the real estate commission is to protect the public. This is done chiefly by licensing brokers, enforcing the licensing law through rules, forms, and disciplinary proceedings. Licencee's are not considered "public" therefore the commission does not get involved in disputes between licensee's in matters such as commission disagreements.
In Colorado in the absence of a written agency agreement, a broker is considered to be a: A: free agent B: transaction broker C: sub agent D: general agent
B: transaction broker Agency agreements are established only by a written contractual agreement. If no contractual agreement has been signed then the default relationship is transaction broker. Transaction broker can also be established by a written contractual agreement.
How many credit hours of Continuing Education classes does an Associate Broker need to renew his/her license? A: 24 hours of elective class credit B: 24 hours of mandatory class credit C: 12 hours of elective class credit and 12 hours of mandatory class credit D: 4 hours of mandatory class credits and 20 hours of elective class credit
C: 12 hours of elective class credit and 12 hours of mandatory class credit Renewal requires twenty-four hours of education credit, twelve of which shall be the credits developed by the real estate commission. That is the 4 credit hour Annual Commission Update Class the the Associate Broker must take every year. A licensee can also satisfy all educational requirements by retaking the Colorado portion of the real estate exam. Reference Statute 12-61-110.5 Colorado Real Estate Manual
When a licensee misrepresents facts in property sales, they are subject to which action? A: Paying a fine to the county in which the misrepresentation occurred B: Immediately having their license suspended by the Real Estate Commission C: Having a hearing before the Real Estate Commission D: Immediately having their license revoked by the Real Estate Commission
C: Having a hearing before the Real Estate Commission A licensee is always under the jurisdiction of the real estate commission. Acts of fraud may also require a broker to appear in civil or criminal court.
If a licensee is in court, the following has (have) jurisdiction over him: A: the court B: the Real Estate Commission C: both the court and the Real Estate Commission D: NAR and the court
C: both the court and the Real Estate Commission Although a judge has jurisdiction inside of a courtroom, that the licensee is in a courtroom does not remove the real estate commissions jurisdiction over a licensee outside the courtroom.
In Colorado, all of the following topics are regulated by Real Estate License Law or Real Estate Commission Rules except: A: qualifications of licensure B: record keeping C: ethical standards D: Commission-approved contracts
C: ethical standards The real estate commission enforces laws, approves contracts and approves license applications. The National Association of Realtors (NAR) regulates ethics.
If a Colorado real estate licensee's license is revoked, his employing broker's license, if implicated is: A: automatically revoked B: automatically suspended C: not suspended or revoked until a hearing is held
C: not suspended or revoked until a hearing is held Licenses are never automatically revoked or suspended without a hearing.
After successfully completing the educational classes and passing the state exam, within what time frame must an applicant make application to the Commission? A: 120 days after taking the test B: 120 days after passing educational classes C: 150 days after taking the test D: 365 days after passing the test
D: 365 days after passing the test Real estate examination test scores expire, after one year.
Which of the following actions on the part of a real estate broker could result in revocation of his license? A: Failing to submit to an owner all formal, written offers for property listed for sale B: Quoting to prospective buyers, of a property, a price other than the one stipulated by the owner C: Failure to report material facts D: All of the above could result in revocation
D: All of the above could result in revocation A licensee must submit all offers and represent each property under the terms stipulated by he owner.
In Colorado, commissions for real estate transactions are set by: A: The Colorado Real Estate Commission B: Law C: Local boards of realtors D: Each brokerage firm
D: Each brokerage firm Each brokerage firm sets its own commission structure parameters, or else it could be construed as price fixing and a violation of Sherman Antitrust Laws.
A broker's license may be suspended or revoked for which of the following causes? A: Over-charging sales commission B: Conviction of a motor vehicle violation C: Failure to pay a money judgement entered by a clerk of courts D: Failure to account for or remit funds belonging to others
D: Failure to account for or remit funds belonging to others Failing to account for funds of others, conversions and commingling are grounds for disciplinary action.
Those exempted from the obtaining a real estate license are: A: any person who purchases property or a business opportunity for his own account or in any way disposes of the same B: any authorized attorney in fact or attorney at law while acting in that capacity C: any escrow agent, receiver, trustee in bankruptcy, executor, administrator, guardian, or any person acting under a court order D: all of the above
D: all of the above A license is required when an individual receives compensation for the sale of property for others.
A licensee, who is guilty of an act that is grounds for disciplinary action, may: A: be subject to criminal prosecution B: have his/her license suspended or revoked C: be subject to civil prosecution D: all of the above
D: all of the above The real estate commission may suspend or revoke a license. Brokers may also be subjected to criminal prosecutions as a result of certain criminal acts.
A broker is required to disclose any psychologically stigmatizing factors, such as there was a death in/on the property, that is actually known by the broker when he is acting as: A: a seller's agent B: a buyer's agent C: a transaction broker D: never
D: never The real estate commission's position on psychologically stigmatized properties is that they are NOT TO BE disclosed and agents are protected from legal actions resulting from nondisclosure. Stigmatized property is a controversial term used in the real estate business for property which buyers or tenants may shun for reasons that are unrelated to its physical condition or features. These can include events invloving murder or suicide or AIDS, in addition to a belief that a house may be haunted. Material facts such as the foundation is bad or the house tested high for Radon ARE required to be disclosed.
An applicant for a real estate license can solicit buyers and sellers after (or upon): A: applying for a license B: taking the license examination C: notification of passing examination D: receipt by broker of individual's license
D: receipt by broker of individual's license After applying for a license and passing the exam, the real estate commission will mail a license to the broker. The licensee can then practice real estate.
When a licensee transfers from the employ of one broker to another, of the following who is responsible for surrendering the license to the Real Estate Commission: A: the licensee B: the former employing broker C: new employing broker D: the licensee and the now former employing broker are required to file the necessary paperwork
D: the licensee and the now former employing broker are required to file the necessary paperwork A licensee and his former employing broker are jointly responsible for returning real estate licenses to the commission.