FL REAL ESTATE CHAPTER 6
9. In which of the following circumstances may a citation be issued to a licensee? (a) When no substantial threat to the public health, safety and welfare exists (b) The hearing officer recommends one (c) A final order was served on the licensee (d) A formal complaint has been received by the Department
Your answer: A A citation can be issued for specified violations by the DRE when no substantial threat to the public health, safety, and welfare exists or if a violation is in the process of being corrected. Specified violations can be handled by the issuance of a citation which requires payment of a fine as a penalty. Citations can be issued only for an initial, single violation. Multiple or repeat violations require a formal complaint to be entered. Reference: Chapter 6, Citation Authority
22. How would a licensee attempt to compel testimony from a witness in a formal hearing? (a) Ask the Administrative Law Judge to subpoena the witness to testify. (b) Provide proof to the court that the witness has some valid information. (c) Send the witness a valid notice of appearance. (d) Have his or her lawyer issue a writ of mandamus.
Your answer: A If a licensee (the respondent) does not dispute the facts, the case is brought to the Commission for an informal hearing. The respondent is entitled to present testimony to explain mitigating circumstances that could reduce the punishment, if taken into consideration by the Commission. The Commission will then impose discipline based upon the specific statutes or rules that have been violated. If the respondent disputes the material facts, the case will be scheduled for a formal hearing before an administrative law judge from the DOAH. The administrative law judge conducts a hearing similar to a trial at which testimony and witnesses can be presented. Administrative law judges must be attorneys that have been members of the Florida Bar for at least 5 years prior to their appointment. The respondent has the right to respond to or answer the complaint, the right to present evidence and cross-examine witnesses, and the right to be represented by legal counsel. The administrative law judge can issue subpoenas for witnesses and compel attendance of a witness. A respondent may request an administrative law judge to subpoena a witness. Reference: Chapter 6, The Disciplinary Process, Step 5: Formal/Informal Hearing
19. A licensee defrauded two customers in a single real estate transaction. The court rendered a single judgment against the licensee in the amount of $65,000. The licensee could not satisfy any portion of the judgment from personal assets. What amount will the former customers be able to recover from the Real Estate Recovery Fund? (a) $50,000 (b) $65,000 (c) $85,000 (d) $150,000
Your answer: A Reimbursement from the recovery fund for a single judgment is limited to a maximum of $50,000 or the unsatisfied portion of the judgment, whichever is less. Only actual or compensatory damages awarded by a court can be reimbursed from the recovery fund. Punitive damages cannot be paid from the fund. If multiple judgments are awarded against a licensee, the maximum reimbursement from the recovery fund is limited to $150,000. Reference: Chapter 6, Florida Real Estate Recovery Fund
4. The range of penalties that may be imposed on a licensee by the Commission for violation of law or rules includes which of the following? (a) Denial, reprimand, fine, probation, suspension and revocation (b) Imprisonment only (c) A fine and imprisonment only (d) A fine, reprimand, denial, suspension, revocation and imprisonment
Your answer: A The purpose of the disciplinary guidelines is to give notice to licensees of the range of penalties that normally will be imposed for each count during a formal or informal hearing. For purposes of this rule, the order of penalties ranging from lowest to highest is reprimand, fine, probation, suspension, and revocation or denial. Reference: Chapter 6, Administrative Penalties, Range of Penalties
29. 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? (a) This practice is a violation of F.S. 475. (b) This promotional program is permissible since no purchase was required. (c) By using a lottery to promote sales, the developer is guilty of fraud. (d) The developer must escrow the value of the most expensive model prior to offering the contest to the public.
Your answer: B A broker who uses lotteries or trading schemes involving selling of certificates or chances to induce any person to buy real estate is guilty of fraud. Contests where no purchase is required may be permissible. Reference: Chapter 6, Administrative Penalties, Fraudulent Activities, Using Lotteries
7. What is the charge for anyone found guilty of using false or misleading advertising? (a) Third-degree misdemeanor (b) Second-degree misdemeanor (c) First-degree misdemeanor (d) Third-degree felony
Your answer: B A criminal violation of F.S. 475 by a licensee typically would be classified as a second-degree misdemeanor. Second-degree misdemeanors include false and misleading advertising and may be punished by a fine of up to $500 and/or imprisoned for up to 60 days. Reference: Criminal Penalties, Second Degree Misdemeanors
15. Which activity would be classified as a first-degree misdemeanor under F.S. 475? (a) Placing false or misleading advertising (b) Violation of rental information rules (c) Submitting false information in an application (d) An unlicensed person operating as a broker
Your answer: B Any person who violates the rental information requirements concerning rental lists, information and contracts is guilty of a first-degree misdemeanor. A first-degree misdemeanor is punishable by a fine of up to $1,000 and/or imprisonment not to exceed 1 year. Reference: Chapter 6, Criminal Penalties, First-degree Misdemeanors
11. What action might the Secretary of the Department of Business and Professional Regulation take against a broker whose actions pose an immediate serious danger to the safety and welfare of the public? (a) Suspend the licensee's license for ten years (b) Issue a summary suspension (c) Issue a cease-and-desist order (d) Place the licensee on probation
Your answer: B During an investigation, if a complaint is found to be of an extremely serious nature that poses an immediate and serious danger to the safety and welfare of the public, the Secretary of the DBPR can request a summary suspension. This order immediately suspends the license, which is followed by a full disciplinary hearing. Reference: Chapter 6, The Disciplinary process, Step 2: Investigation
5. An appeal of a Commission final order is filed with which of the following? (a) Florida Supreme Court (b) District Court of Appeals (c) County court (d) Department of Administrative Hearings
Your answer: B If the licensee does not agree with the final order of the Commission, a petition for review may be filed with the Florida District Court of Appeals within 30 days of the final order. Reference: Chapter 6, The Disciplinary Process, Step 7: Appeal
28. 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 which fraudulent activity? (a) Exaggeration (b) Misrepresentation (c) Failure to account (d) Concealment
Your answer: B Misrepresentation is the misstatement or omission of facts. Misrepresentation can lead to fraud if statements are intentional and relied upon. Reference: Chapter 6, Administrative Penalties, Fraudulent Activities, Misrepresentation
8. What is the maximum amount of money that can be paid from the Real Estate Recovery Fund to three persons who suffered monetary loss as the result of a fraudulent act committed by a real estate licensee and have been awarded a single judgment? (a) $150,000 (b) $50,000 (c) $25,000 (d) $10,000
Your answer: B The Florida Real Estate Recovery Fund was established for the purpose of reimbursing those persons or entities that have suffered monetary damages as the result of fraudulent acts committed by real estate licensees. Reimbursement from the recovery fund for a single judgment is limited to a maximum of $50,000 or the unsatisfied portion of the judgment, whichever is less. Only actual or compensatory damages awarded by a court can be reimbursed from the recovery fund. Punitive damages cannot be paid from the fund. Reference: Chapter 6, Florida Real Estate Recovery Fund
20. Which of the following best describes a DBPR investigator's roles and responsibilities? (a) The investigator can issue subpoenas and final orders. (b) The investigator will make a recommendation as to the penalty that should be imposed against a licensee. (c) Upon conclusion of the investigation, the investigator files an investigative report. (d) The investigator offers his or her opinions based upon information obtained during the course of the investigation.
Your answer: C Investigators cannot issue a subpoena or offer an opinion concerning the case. The Department, however, can issue a subpoena to anyone if requested by the investigator and if it is necessary to obtain information not otherwise available. At the conclusion of the investigation, the investigator submits a report to the Division that cannot contain any personal opinions or recommendations of the investigator. Reference: Chapter 6, The Disciplinary Process, Step 2: Investigation
27. A licensee from Miami decided to purchase a home in Orlando. Because the licensee was unfamiliar with the Orlando market, while acting as a buyer the Miami licensee engaged the services of an Orlando broker. The Orlando broker neglected his duties, resulting in a financial loss to the Miami licensee. Which statement is correct regarding this situation? (a) The Miami licensee should have been more careful, and cannot collect from the Florida Real Estate Recovery Fund. (b) After winning a court judgment, the Miami licensee may file a claim against the Florida Real Estate Recovery Fund since he/she was acting as a buyer, not as a licensee when the damage was incurred. (c) The Orlando broker is immune from FREC disciplinary action because he was working with a Florida real estate licensee. (d) The Real Estate Recovery Fund only protects individuals that are not licensed.
Your answer: B The Florida Real Estate Recovery Fund was established for the purpose of reimbursing those persons or entities that have suffered monetary damages as the result of fraudulent acts committed by real estate licensees. To be eligible for reimbursement from the Recovery Fund, a suit for damages must first be brought in a civil action against a broker, broker associate or sales associate. After a judgment has been obtained, the personal assets of the licensee must first be used to satisfy the judgment. If the assets of the licensee are insufficient to satisfy the judgment, the party award the judgment may request reimbursement from the fund. In this case, the Miami licensee was acting as a buyer and may file a claim for the damage that incurred. Reference: Chapter 6, Florida Real Estate Recovery Fund
14. What must an unlicensed individual do when ordered to appear before the DBPR? (a) Nothing; the DBPR has no jurisdiction over unlicensed persons. (b) Appear (c) File an appeal (d) Bring an attorney
Your answer: B The defendant in a hearing has the right to present evidence and cross-examine witnesses. The administrative law judge can issue subpoenas for witnesses and compel attendance of a witness. A respondent may request an administrative law judge subpoena a witness. The Commission may discipline a licensee who fails to respond to a subpoena. If an unlicensed person fails to comply with a subpoena, a court order may be obtained. Violation of the court order may result in a $500 fine. Reference: Chapter 6, The Disciplinary Process, Step 5: Formal/Informal Hearing
21. What term is used to refer to the individual who files a complaint? (a) Accused (b) Defendant (c) Complainant (d) Respondent
Your answer: C A complaint is an allegation by a complainant that a violation of the law or a rule has occurred. If a complainant withdraws a complaint, the Department may also elect to continue to investigate if the original complaint seemed sufficient. A legally sufficient complaint is one that alleges a violation of law or rule has occurred and contains sufficient supporting evidence. The DRE must investigate legally sufficient complaints. Reference: Chapter 6, The Disciplinary Process, Step 1: Complaint
25. Which penalty would apply to a licensee who is guilty of false advertising? (a) Minor offense requiring reprimand (b) First-degree misdemeanor (c) Second-degree misdemeanor (d) Third-degree felony
Your answer: C A criminal violation of F.S. 475 by a licensee typically would be classified as a second-degree misdemeanor. Second-degree misdemeanors include false and misleading advertising and may be punishable by a criminal fine of up to $500 and/or imprisonment for up to 60 days. Reference: Chapter 6, Criminal Penalties, Second-Degree Misdemeanors
17. What is the maximum penalty that may be imposed upon an individual who is found guilty of unlicensed real estate activity? (a) $500 fine and imprisonment for up to 90 days (b) $1,000 fine and imprisonment for up to 1 year. (c) $5,000 fine and imprisonment for up to 5 years. (d) $10,000 fine and imprisonment for up to 10 years.
Your answer: C Anyone that acts as a broker or sales associate without beIng the holder of a valid and current active license is guilty of a third-degree felony punishable by a criminal fine of up to $5,000 and/or imprisonment of up to 5 years. Reference: Chapter 6, Criminal Penalties, Third-Degree Felonies
30. 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? (a) Nothing. It is the broker's responsibility to maintain the escrow account (b) Misrepresentation (c) Culpable negligence (d) Failure to account and deliver
Your answer: C Culpable negligence occurs if a broker operates in a reckless, careless and excessively negligent manner. Culpable negligence is negligence for which one can be held legally accountable. A sales associate who forgets to collect an escrow deposit, as specified in a sales contract, may be charged with culpable negligence. Reference: Chapter 6, Administrative Penalties, Fraudulent Activities, Culpable Negligence
16. 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? (a) The sales associate is not responsible for collecting the deposit, this is the broker's responsibility. (b) The broker should notify the FREC of an escrow dispute. (c) By forgetting to collect the deposit, the sales associate may cause harm to the seller, and could be charged with culpable negligence. (d) The sales associate may be charged with conversion.
Your answer: C Culpable negligence occurs if a licensee operates in a reckless, careless and excessively negligent manner. Culpable negligence is negligence for which one can be held legally accountable. A sales associate who forgets to collect an escrow deposit, as specified in a sales contract, may be charged with culpable negligence. Reference: Chapter 6, Administrative Penalties, Fraudulent Activities, Culpable Negligence
12. What action may be taken if either the Florida Real Estate Commission or the licensee disagrees with a recommended order submitted by the administrative law judge? (a) Seek adjudication (b) Submit the matter to mediation (c) File exceptions (d) Request novation
Your answer: C Following the conclusion of a hearing, all parties are served copies of the recommended order submitted by the administrative law judge. A period of 15 days is allowed for the parties to file exceptions to the recommended order. After the 15-day period has expired, the recommended order, together with any exceptions, is delivered to the FREC for review. Reference: Chapter 6, The Disciplinary Process, Step 5: Formal/Informal Hearing
24. Occasionally FREC may receive a complaint from a member of the public that is not considered a "legally sufficient" complaint. Which of the following scenarios would be considered legally sufficient? (a) An assistant forgets to give a message to the broker, so the broker did not call the seller in a timely manner. (b) A sales agent in single agent relationship representing the seller discloses to the purchaser that the house the buyer is considering is located near a waste treatment facility. (c) A sales associate charges a fee to write a lease for a prospective tenant. (d) A sales associate in a No Brokerage Relationship does not present a verbal offer.
Your answer: C The Division handles real estate related complaints made against both licensed and unlicensed individuals. A complaint analyst reviews the complaint form or letter that describes the alleged violation to determine if the complaint is legally sufficient. A legally sufficient complaint is one that alleges a violation of law or rule has occurred and contains sufficient supporting evidence. The Division must investigate legally sufficient complaints. Reference: Chapter 6, The Disciplinary Process, Step 1: Complaint
3. What happens if a respondent fails to answer an administrative complaint? (a) The defendant will be issued a subpoena. (b) The Commission will dismiss charges against the licensee. (c) The Commission will proceed with the hearing. (d) The Department of Business and Professional Regulation will send investigators to arrest the licensee.
Your answer: C The administrative complaint constitutes the formal administrative charges made by the DBPR against the licensee. The administrative complaint is served upon the licensee, who is called the respondent. The Commission, by rule, allows 21 days for the respondent to file an Election of Rights form. If the respondent fails to file an answer to an administrative complaint, the Commission will proceed with a hearing. The Election of Rights form requires the respondent to state whether or not he or she disputes the allegations in the complaint. Reference: Chapter 6, The Disciplinary Process, Step 4: Administrative Complaint
1. What is the purpose of the FREC disciplinary guidelines? (a) To extend the meaning of the law (b) To specify and implement the law (c) To give new meaning to the law (d) To give licensees notice of the range of penalties that normally will be imposed for violation of a law or rule
Your answer: D The purpose of the disciplinary guidelines is to give notice to licensees of the range of penalties that normally will be imposed for each count during a formal or informal hearing. Disciplinary guidelines are based on a single violation. Reference: Chapter 6, Administrative Penalties, Range of Penalties
2. Who reports findings of fact to the Commission at the conclusion of an administrative hearing? (a) An attorney (b) The Division of Real Estate investigator (c) The Division of Real Estate prosecutors (d) The administrative law judge
Your answer: D Within 90 days following conclusion of the hearing, the administrative law judge submits a recommended order based on findings of fact and conclusion of law. The findings of fact and conclusions of the administrative law judge must be based on clear and convincing evidence. Administrative law judges must be attorneys that have been members of the Florida Bar for at least 5 years prior to their appointment. Reference: Chapter 6, The Disciplinary Process, Step 5: Formal/Informal Hearing
10. What is the maximum fine FREC can impose against a licensee who was found guilty of two violations of F.S. 475? (a) $1,000 (b) $5,000 (c) $7,500 (d) $10,000
Your answer: D Administrative fines may be imposed by the Commission for violations of law or rules in amounts up to $5,000 per offense. A licensee guilty of two violations could receive a maximum fine of $10,000 ($5,000 for each offense). Reference: Chapter 6, Administrative Penalties, Range of Penalties, Administrative
6. Which of the following statements best describes the Probable Cause Panel? (a) The Probable Cause Panel is composed of three Florida Real Estate Commission members, no more than one of which may be a lay member. (b) The Probable Cause Panel is an exercise of the quasi-judicial powers of the Florida Real Estate Commission. (c) The Probable Cause Panel determines guilt or innocence and submits a recommended order to the Florida Real Estate Commission. (d) The Probable Cause Panel has 30 days from receipt of a complete report to recommend dismissal or issuance of a formal complaint.
Your answer: D At the conclusion of an investigation, the investigator submits a report to the DRE. Prosecutors from the legal section review the investigative report and make a recommendation regarding prosecution of the case to the Probable Cause Panel. The panel consists of two current members of the Commission or past Commission members, no more than one of which can be a lay member. The panel has 15 days in which to make a request for any additional information. Once a complete report has been received, the panel has 30 days to recommend dismissal of the case or the issuance of a formal complaint. Reference: Chapter 6, The Disciplinary Process, Step 3: Probable Cause Panel
26. What may a real estate sales associate or broker who does not pay attention to detail and causes harm to another be charged with? (a) Misrepresentation (b) Conspiracy (c) Intentional deception (d) Culpable negligence
Your answer: D Culpable negligence occurs if a licensee operates in a reckless, careless and excessively negligent manner. Culpable negligence is negligence for which one can be held legally accountable. Conspiracy occurs when a licensee forms a scheme with another or designs with another intending to defraud a third party. Misrepresentation is the misstatement or omission of facts. Misrepresentation can lead to fraud if statements are intentional and relied upon. Reference: Chapter 6, Administrative Penalties, Fraudulent Activities, Culpable Negligence
23. If an investigator from the DBPR found a minor infraction of F.S. 475 or F.A.C. 61J2, what would be the likely result? (a) The investigator would attempt to obtain a summary suspension. (b) The investigator would notify the Chairperson of the FREC. (c) The investigator would issue a cease and desist order. (d) The investigator would issue a Notice of Noncompliance or citation.
Your answer: D If an investigator finds that a complaint involves a minor violation of a Commission rule, a Notice of Noncompliance or citation can be issued to handle the matter without forwarding an investigative report to the legal section. If the complaint is found to be of a serious nature, but not an immediate threat to the public, the investigative report is forwarded to the legal section of the DRE for further action. If the complaint is found to be of an extremely serious nature that poses an immediate and serious danger to the safety and welfare of the public, the Secretary of the DBPR can request a summary (or emergency) suspension. This order immediately suspends the license, which is followed by a full disciplinary hearing. Reference: Chapter 6, The Disciplinary Process, Step 2: Investigation
18. George received a final order from the Florida Real Estate Commission, ordering his license revoked. If George wishes to appeal this order, what would be his next step? (a) Seek an injunction from the Florida Real Estate Commission. (b) Seek a writ of mandamus from the Circuit Court. (c) Request an injunction from the Department of Business and Professional Regulation. (d) File an appeal with the District Court of Appeal.
Your answer: D If the licensee does not agree with the final order of the Commission, a petition for review may be filed with the Florida District court of Appeals within 30 days of the final order. During the appeal process, the licensee is out of business unless a stay is granted. A stay will be granted unless a threat of probable danger to the welfare of the public is shown. The District Court of Appeals issues the stay and grants supersedeas, which supersedes the action of the Commission and allows the licensee to continue to practice until the case can be heard on appeal. The review of the case by the district court can either affirm or reverse the final order of the Commission. Reference: Chapter 6, The Disciplinary Process, Step 7: Appeal
13. How is the Real Estate Recovery Fund funded? (a) Property tax dollars (b) The Florida State Treasury (c) State intangible taxes (d) Fees and fines paid by real estate licensees
Your answer: D The Florida Real Estate Recovery Fund is maintained by fees and fines paid by licensees. A fee of $3.50 per year is added to the license fee for both new and renewal licenses for brokers. A fee of $1.50 per year is added for new and renewal licenses for sales associates. If the total amount in the fund reaches $1,000,000, collection of these fees is discontinues until the amount in the recovery fund falls below $500,000. Reference: Chapter 6, Florida Real Estate Recovery Fund