Chapter 1 :Real Estate Licensing and Endorsement
The DRE was formally known as the _________________
California Bureau of Real Estate (CalBRE)
The government agency responsible for the registration of mobilehomes is called the ________________
California Department of Housing and Community Development (HCD)
Who created the Department of Real Estate (DRE)?
California Legislature
The arranging of a sale or purchase of a business opportunity is governed by the ________.
DRE
To engage in the business of real estate as a real estate broker or agent, a person first obtains a real estate license issued by the _________
DRE
The DRE requires verification of the agent's employment using the ____________________ issued by the DRE.
Employment Verification Form
Can an real estate agent prepare listings, sales documents, disclosure sheets on their OWN behalf?
NO! Only on behalf of the broker
The chief officer of the DRE is the _____________________
Real Estate Commissioner
Funds available to individuals who have obtained a final-court judgment against a licensee and are unable to recover the judgment from the licensee. Also known as the Consumer Recovery Account.
Real Estate Recovery Fund
The _____________________ aka _______________, is available to individuals who have obtained a final-court judgment against a real estate licensee for losses caused while acting as an agent and are unable to recover the judgment from the licensee.
Real Estate Recovery Fund; the Consumer Recovery Account
What is a designated officer (DO)?
The individual who is the licensed officer qualifying a corporation for a corporate broker license.
What is fictitious business name? Aka?
The name under which a business or operation is conducted also known as a d.b.a. ("doing business as...").
The regulations are part of the California Code of Regulations known as ____________
Title 10
True of false? The DO is liable to the corporation for any failure to supervise agents. However, the DO is not liable to corporate clients for breaching their duty to supervise agents - this supervision is a duty owed to their employer, the corporation and the DRE who entrusted them as a designated officer.
True
True of false? The individual broker, when acting as the DO, acts on behalf of the corporation in the capacity of a corporate officer only. The individual who is the DO may also become an employee of the corporation and act as an agent of the corporation rendering services to the corporation's clients
True
True or False? If more than one place of business is maintained, the broker applies for and obtains an additional license for each office branch
True
True or False? A real estate broker and agent may solicit and negotiate for the purchase, lease or exchange of mineral, oil and gas property. The licensee may also arrange or negotiate and service loans on mineral, oil and gas property
True
True or False? Mobile homes have a unique legal status, being either real estate OR personal property.
True
True or False? The DRE commissioner will not issue a license or reinstate a suspended license until the $95 fee is paid
True
True or false? A licensee may use a fictitious business name in any activity for which a real estate license is required if the license is issued under the fictitious name
True
True or false? The broker handling the sale of a mobilehome that is considered real estate conducts themselves as though they are handling the sale of real estate. The rules for buying, selling, registering and encumbering mobilehomes that are not considered real property differ from the rules for real estate sales.
True
True or false? An applicant who fails the agent exam may apply for reexamination. No restriction exists on the number of times the applicant may take the test within the two-year period following the application.
True
True or false? An applicant who fails to take the exam and pass within two years from the date of filing the application will have to file a new application to take the exam
True
True or false? No limit is placed on the number of times the applicant may take the exam.
True
When is a mobilehome no longer considered personal property but is considered real estate? Why?
When it meets the requirements and is attached to a permanent foundation since it is a permanent fixture or an improvement to real estate
Can licensee rent mineral, oil and gas property and collect the rents or royalties from the mineral, oil and gas property?
Yes
All statutory course requirements for both the agent and the broker license may be waived if the applicant is _____________________
a member of the state bar.
A sales agent employed by a broker is the _________of the broker, not a __________. In turn, the broker is the ___________ of the client.
agent ; client agent
Real estate agents are legally classified as ________________, since they need to be employed by a __________________ to render real estate-related services to the public. Agents render all services on behalf of the ________ that employs them.
agents of the agent; real estate broker; broker
What is a real estate agent?
an individual who, for compensation or in expectation of compensation, is employed by licensed broker to do one or more of the acts of a licensed broker
On the sale of a business opportunity, the inventory of the business is transferred to the buyer by a ________________
bill of sale
A fictitious business name license will only be granted to a_________who has complied with the filing requirements for a fictitious business name, also known as a d.b.a. ("doing business as...").
broker
The transfer of more than one-half the inventory of a business' materials or goods to a person other than the business' customers is called a _____________
bulk sale
__________________ is the sale or lease of the operations and goodwill of an existing business enterprise or opportunity
business opportunity
The DRE cannot issue or renew a real estate license if the applicant is on a list of persons not in compliance with __________ provided by the State Department of Social Services
child support orders
Acts for which a real estate license is required may be performed in the name of a ____________ if a licensed officer of the corporation qualifies the corporation for a license issued by the _________
corporation; DRE
The corporation holds its brokerage license through the ______________
designated officer (DO)
The officer qualifying the corporation for a corporate broker license is called the ___________________
designated officer (DO)
________________ is the name under which a business or operation is conducted, also known as a d.b.a. ("doing business as...").
fictitious business name
To qualify for the employment exemption based on experience, the broker applicant needs to:
file a written petition with the DRE setting forth the applicant's qualifications.
What are unlicensed employees?
individuals acting on behalf of others, such as real estate brokers, who arrange, accept reservations or money for transient occupancy
As an agent representing the broker, what is real estate sales agent authorized to prepare on behalf of the broker?
listings, sales documents, disclosure sheets, etc.,
A mobile home is also called a _____________
manufactured home
________________ is a property designed to be used as a dwelling, classified as either personal or real property, depending on the method of attachment to a parcel of real estate. Also known as a manufactured home.
mobilehome
A Department of Real Estate (DRE) licensee who receives fees to arrange a consumer mortgage other than a carryback.
mortgage loan originator (MLO)
Licensees who make or arrange residential mortgages are required to obtain a DRE ______________________
mortgage loan originator (MLO) license endorsement
Every real estate broker maintains a definite place of business which serves as an ____________
office
When a new mobile home is first purchased it is registered on a form provided by the HCD, referred to as the _______________ of the mobile home.
original registration
At the time of the original registration of the mobile home, the HCD creates a _______________ for the mobilehome.
permanent title record
An individual acting without a real estate license, either as a broker or agent, is guilty of public offense punishable 1.) _______ for an individual OR 2.) ___________ for a corporation 3.) __________ (time) in jail OR 4.) ____________
public offense 1.) $20,000 MAX fine 2.) 60,000 MAX fine 3.) 6 months 4.) both a fine AND imprisonment
Mobilehomes are registered with the HCD, unless the mobilehome is considered ______________
real estate
An individual who, for compensation or in expectation of compensation, is employed by a licensed broker to do one or more of the acts of a licensed broker is a _________________
real estate agent
To receive a fee for the sale of a business opportunity, it is necessary to hold a _____________, unless the person receiving the fee is licensed as a ______________ or____________ or the United States.
real estate license; securities broker; dealer by California
The broker employing agents is required under the DRE's supervisory scheme to _______________ sales agents' activities.
reasonably supervise
A licensee's license will be suspended and will not be reinstated until the licensee:
repays any amounts paid from the Real Estate Recovery Fund to satisfy a judgment against them
A ____________is any loan primarily for personal, family or household use, known as a _____________________, secured by a deed of trust on a dwelling.
residential mortgage ; consumer purpose mortgage
What is a business opportunity?
sale or lease of the operations & goodwill of an existing business enterprise or opportunity
Who issues the Employment Verification Form?
the DRE
What is an office?
the place where the broker displays their license and where consultations with clients are held.
What is the purpose of Department of Real Estate (DRE)?
to oversee, regulate, administer and enforce the real estate law
What are the 2 exceptions to the agent employment requirements?
will be given to an applicant who has: 1.) ≥ 2 years of general real estate experience; or 2.) graduated with a real estate-specific degree from a four-year college or university.
For causes of action which occurred on or after January 1, 2009, the threshold is $_____________ for one transaction AND $_____________ for any one licensee
$50,000; $250,000
Once the DRE notifies the applicant of passing, the applicant may apply for an agent license. The application for the license and the fee are to be submitted to the DRE within __________ of the examination date.
1 year
Once the applicant has been notified by the DRE of their passing, the applicant may apply for a broker license and pay the appropriate licensing fee within _________ year
1 year
What are the qualifications for a broker's license?
1.) An agent who has held a real estate agent license for at least two years within the last five years may apply for a broker license. 2.) agent is required to have worked on a full-time basis (at least 40 hours per week) as an agent during the two-year time requirement.
What are major categories of persons and activities which are exempt from real estate licensing requirements?
1.) a person dealing with their own property, called a principal 2.) an officer of a corporation, or a general partner of a partnership or a manager of a limited liability company (LLC), collectively called entities, with respect to property owned or leased by the entity. To be exempt, the acts may not be performed in expectation of a fee 3.) an individual with power-of-attorney authority 4.) an attorney rendering legal services for a client 5.) a receiver, trustee in bankruptcy or any person acting under order of a court 6.) a trustee of a trust deed lien who is acting under a power-of-sale provision in the trust deed 7.) a resident manager of an apartment complex, hotel, motel or trailer park 8.) individuals acting on behalf of others, such as unlicensed employees of real estate brokers
To be eligible for a broker or agent license, the applicant needs to (6):
1.) be ≥18 years old 2.) be honest and truthful 3.) make the application on the proper form prescribed by the DRE 4.) complete the mandatory education 5.) pass the qualifying exam 6.) need to be fingerprinted
The documents used in the sale of a business include (3):
1.) bill of sale 2.) Uniform Commercial Code (UCC)-1 Financing Statement for the personal property 3.) a deed (or assignment of the leasehold and a trust deed) for the transfer of the real property.
Chapter 1 Key Terms (9):
1.) bulk sale 2.) business opportunity 3.) Department of Real Estate (DRE) 4.) designated officer (DO) 5.) fictitious business name 6.) mobile home 7.) mortgage loan originator (MLO) 8.) principal 9.) Real Estate Recovery Fund
What is the The Real Estate Commissioner's principal responsibility?
1.) enforce ALL real estate laws pertaining to real estate licensing & the Subdivided Lands Act 2.) ensure real estate licensees & members of public dealing w/ licensees receive maximum protection 3.) issue regulations addressing conduct of persons falling w/in real estate law activities
The DRE considers the following activities, conducted within the fiveyear period immediately prior to the date of application for the broker examination, as qualification in lieu of employment as a sales agent
1.) experience as an escrow or title officer 2.) experience as a mortgage officer directly related to the financing or conveying of property 3.) experience as a subdivider, contractor or speculative builder, if the agent performed substantial duties relating to the purchase, finance, development and sale or lease of real property 4.) Other types of direct real estate-related experience will be considered by the DRE if it satisfies the intent of the law
The judgment needs to be based on (3):
1.) fraud, misrepresentation or deceit 2.) conversion of trust funds OR 3.) criminal restitution
Common types of business opportunities include (3):
1.) liquor stores 2.) gas stations 3.) restaurants
The DRE will refuse to issue a license under a fictitious business name when (5):
1.) name is misleading or constitutes false advertisement 2.) implies a partnership or corporation exists when one does not 2.) includes the name of a real estate agent 4.) violates California's Business and Professions Code on fictitious business name requirements 5.) is the name formerly used by a licensee whose license has been revoked
A real estate broker is a person who, for compensation or in expectation of compensation, engages in:
1.) negotiate sale, purchase or exchange of real estate, leases or business opportunities 2.) solicit listings, buyers or sellers 3.) lease or rent, or offer to lease or rent, property on behalf of owner or tenant 4.) collect rent from real estate or business opportunities 5.) assist in the purchase or lease of property owned by state or federal government 6.) negotiate real property sales contracts or mortgages to be secured directly or collaterally by real estate or business opportunities on behalf of lenders or borrowers; and 7.) negotiate sale or purchase of a mobile home
What do dwellings include (3)?
1.) one-to-four unit residential properties 2.) mobile homes 3.) trailers or houseboats, if they are used as residences
The sale of a business opportunity consists of 2 transactions (2):
1.) sale of the business, including inventory, trade fixtures & goodwill 2.) sale of the real property itself, whether a fee or leasehold interest, including the building & land
Failure of the DO to supervise may result in (2):
1.) suspension OR 2.) revocation of the DO's real estate license.
Fingerprints are not required if (2)?
1.) the applicant is currently licensed by the DRE OR 2.) holds a real estate license that expired less than two years ago
Reasonable supervision includes? establishing policies, rules, procedures and statements to review and manage:
1.) transactions requiring a real estate license 2.) documents having a material effect upon the rights or obligations of a party to the transaction 3.) the filing, storage and maintenance of documents 4.) the handling of trust funds 5.) advertisement of services that require a license 6.) sales agents' knowledge of anti-discrimination laws 7.) reports of the activities of the sales agents
Chapter 1 Learning Objectives (5):
1.) understand the function of the Department of Real Estate (DRE): to oversee, regulate, administer and enforce the real estate law as practiced by licensees 2.) identify the activities requiring a real estate license 3.) determine the eligibility and education requirements for broker and agent licensing and renewal 4.) understand the function of the Real Estate Recovery Fund 5.) comprehend when a mortgage loan originator (MLO) license endorsement is required of licensees who originate mortgages.
What can unlicensed employees of real estate brokers, who arrange, accept reservations or money for transient occupancy in (3)?
1.) vacation rentals (i.e. hotels, motels or residence clubs 2.) common interest developments (CIDs) (i.e such as condominium projects, planned urban developments (PUDs), community apartment projects and stock cooperatives 3.) an apartment unit or single family residence (SFR)
A licensee is exempt from CE requirements if, on the actual renewal date of the real estate license, the licensee (2):
1.) ≥ 70 y/o AND 2.) has been a real estate licensee in California for at least 30 consecutive years
A mobile home, also called a manufactured home, is a structure (3):
1.) ≥ 8 ft in width, 40 ft in length or > 320 sq. ft when transported in ≥1 sections 2.) built on a permanent chassis 3.) designed to be used as a dwelling w/ or w/o a permanent foundation
What are the roles/responsibilities of the designated officer (DO) (2)?
1.)supervise & control activities of officers & employees of the corporation 2.)supervise activities of agents & brokers employed to act as agents for the corporate broker.
The buyer of the inventory gives public notice of the transfer _____ days before the transfer takes place to perfect their interest in the acquisition of the inventory on closing
12
the DRE may issue a _____________________ to an otherwise qualified applicant who is on the list of persons neglecting child support.
150-day temporary license
The DRE has the authority to suspend the license of any licensee placed on the supplemental four-month delinquency list. However, before a license can be suspended, the DRE gives the licensee notice that the license will be suspended __________ days after the notice is served, unless the licensee ________________
150; receives a release from the district attorney.
If the broker applicant fails the exam, they may apply for reexamination within _____________ after filing the examination application
2 years
The applicant has ________ from the date the exam application is filed with the DRE to take the exam.
2 years
The applicant has ___________from the DRE receipt of the examination application to meet the license qualification requirements and take the exam
2 years
To qualify to take the real estate agent license DRE exam, an applicant completes a_______________ semester unit course, or the quarter equivalent, in:
3
The State Department of Social Services also provides the DRE with a supplemental list of real estate licensees who are delinquent in child support payments for more than ______________. If the licensee does not renew their license with the DRE within ____________ of the DRE's receipt of the supplemental list, the license will be subject to suspension.
4 months; 6 months
How long is real estate broker and real estate agent license valid for?
4 years from the date of issuance noted on the license certificate
All real estate brokers and sales agents need to complete at least _______ hours of continuing education (CE) to renew a license issued by the DRE
45
Thus, a licensed agent only needs to take _____ additional courses to qualify to take the broker exam.
5
All broker applicants need to complete _______ statutory courses of three semester units or the quarter equivalent, unless exempt.
8
Also, any real estate licensee whose name appears on the certified list or supplemental list provided by the State Department of Social Services for noncompliance with an order for child support is liable to the DRE for a special handling fee of $_______ for each time their name is on the list.
95
What is the Department of Real Estate (DRE)?
A government entity which oversees, regulates, administers and enforces California real estate law as practiced by licensees.
What is a principal?
A person, an individual or an entity, acting as a buyer or seller, represented by a broker and their agents.
