FL REAL ESTATE CHAPTER 5

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.

Where may a real estate brokerage office be located?

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

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?

100% If a licensee materially misrepresented what was offered, the tenant applicant can request a 100% refund of any fee paid. The request must be made within 30 days of the contract date.

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

A bank within the state of Florida

Which statement regarding the registration of real estate branch offices is true?

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

A sales associate licensed with a real estate brokerage corporation can be which of the following?

A stockholder A sales associate or broker associate cannot be an officer or director in a real estate brokerage corporation. Anyone can be a stockholder, licensed or not.

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?

All partners must be licensed as active brokers

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

An ostensible partnership is not a true partnership.

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

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?

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

A business legally formed and registered as Rich Real Estate, Inc. is considered to be what type of organization?

Corporation

All of the following business formations can register to conduct real estate transactions, EXCEPT:

Corporation sole

All of the following businesses are required to file documents with the state, EXCEPT:

Corporation sole

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

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

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.

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

Friday

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

General Partnership

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 A joint venture, or joint adventure, is similar to a partnership in some respects. The participants in a joint venture have joint and several liability. However, a joint venture is a temporary business involving a single transaction or a predetermined number of transactions. Since their relationship is temporary, they cannot bind one another to any new transactions. A joint venture can be formed either orally or in writing. No documents must be filed with the Secretary of State to create a joint venture. A joint venture can provide real estate brokerage services if composed of separate real estate brokers. In this situation, the joint venture is not required to register with the DBPR as the brokers are already licensed and permitted to perform services of real estate.

Which business structure may be registered to broker real estate?

Limited partnership A real estate brokerage limited partnership must be registered with the DBPR. A joint venture is a temporary business involving a single transaction or a predetermined number of transactions. A joint venture can provide real estate brokerage services if composed of separate real estate brokers. In this situation, the joint venture does not register with the DBPR as the brokers are already licensed and permitted to perform services of real estate. A business trust cannot be registered with the Commission as a real estate brokerage corporation. Anyone performing services of real estate on behalf of a trust must have an active real estate license. An unincorporated association results if individuals group together for some purpose without creating one of the other organizations. Frequently, homeowner associations or community improvement associations are unincorporated associations. An unincorporated association cannot be registered with the Commission as a real estate brokerage.

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

Litigation A suit in court can be used to resolve an escrow dispute. Two methods are available: Bill of Interpleader or Declaratory Decree. The method chosen depends on whether or not the broker feels that are entitled to some or all of the funds in dispute. In either method, the escrowed funds would be turned over to the registry of the court, pending settlement. The broker would file a Bill of Interpleader if he or she did not claim any rights in the deposit under dispute. If this method is selected, the broker may be awarded court costs and attorney's fees since the broker is making no claim for any of the funds in dispute. A Declaratory Decree would be requested when a broker felt he or she was entitled to some or all of the deposit in dispute. Since the broker is a claimant to some or all of the money in dispute, the broker must pay his or her own court costs and attorney's fees when this alternative is selected.

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

All of the following are authorized alternatives for a broker to use in order to resolve an escrow dispute, EXCEPT:

Obtain an attorney's opinion

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.

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

Retain the exact amount of the disputed commission in the escrow account until the dispute is settled

Which condition would require a location to be registered as a brokerage branch office?

Sales associates are permanently assigned to the location Unless transactions are closed or sales associates permanently assigned, a temporary shelter used by a broker as protection for sales associates and customers is not considered to be a branch office. The permanence and use of a location and the character of activities conducted there determine whether registration is required.

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

The Department of Business and Professional Regulation or its authorized representatives

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. Sales associates or broker associates cannot be partners in real estate brokerage partnerships. A broker associate is an applicant for a broker's license that chooses to continue employment in a sales associate's capacity with a current employer subsequent to passing the state examination. A broker associate may perform the duties of a licensed sales associate, such as depositing escrow funds and providing real estate brokerage services, with permission from the broker.

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.

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

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

A real estate brokerage firm advertises a listed property. Which requirement is correct?

The name of the brokerage must be included in the ad.

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?

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

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

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

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

Title companies, banks, savings and loan associations, and credit unions An escrow account or trust account may be in a commercial bank, title company having trust powers, credit union or savings association located in the state of Florida, and not in a stock of bond brokerage house.