NY Broker Exam Prep - Ch. 7 - Agency Relationships

Which of the following statements about a broker's agent in New York is TRUE? A broker's agent does not have a direct relationship with the client of the broker who engages him or her. A broker's agent works for the same firm as the broker he or she is assisting. A buyer, seller, or tenant who engages a broker has vicarious liability for the actions of any broker's agent engaged by that broker. The client of a broker who engages a broker's agent is also the broker's agent's client.

A broker's agent does not have a direct relationship with the client of the broker who engages him or her. According to the definition supplied by the New York license law, a broker's agent is an agent that cooperates or is engaged by a listing agent, a buyer's agent or a tenant's agent. The broker's agent does not have a direct relationship with the buyer, seller or tenant and the buyer, seller or tenant cannot provide instructions or direction directly to the broker's agent.

According to the concept of level of service, which of the following is something an agent can offer to a client but not to a customer? Advice and counsel Factual information Fairness and honesty Proper disclosure

Advice and counsel

An agency agreement is between: An agent and a seller Two real estate agencies A buyer and a seller A broker and an agent

An agent and a seller

Which of the following is not a fiduciary duty that an agent owes to his or her principal? Loyalty Confidentiality Accountability Blind obedience

Blind obedience

Which of the following is NOT a cause of termination of an agency relationship? Bankruptcy of either party Death of either party Change of the agent's place of business Revocation of the agent's license

Change of the agent's place of business

Which of the following is a duty the agent does NOT owe a customer? Honesty Reasonable care Confidentiality Disclosure

Confidentiality

Which of the following duties best describes what an agent owes customers? Fairness, care, and honesty Obedience, confidentiality, and accounting Diligence, care, and loyalty Honesty, diligence, and skill

Fairness, care, and honesty An agent has a duty to deal fairly and honestly with a customer and with care and skill.

What is required for legal dual agency in New York? Substantive contact Designated agents Written commission agreement Informed consent

Informed consent

When does the agent's duty of confidentiality to his client end? At the expiration of the agency relationship At the transaction closing 1 year after contract expiration Never

NEVER

A property seller empowers an agent to market and sell a property on his behalf. This an example of.. General agency Universal agency No agency Special agency

Special agency

A property seller empowers an agent to market and sell a property on his behalf. This an example of... General agency Universal agency No agency Special agency

Special agency

An intentional nondisclosure of a material fact is called: Active fraud Passive fraud Misrepresentation Dishonest advantage

Passive fraud Passive fraud is an intentional nondisclosure of a material fact that can happen if a person intentionally fails to disclose a fact or actively attempts to hide a material fact.

Which of the following terminations of an agency relationship could result in legal or financial ramifications? Contract performance Contract expiration Mutual agreement between broker and client Renunciation by the client

Renunciation by the client

Which of the following terminations of an agency relationship could result in legal or financial ramifications? Contract performance Contract expiration Mutual agreement between broker and client Renunciation by the client

Renunciation by the client If the agency relationship is involuntarily terminated by renunciation by the client, there may be legal and financial ramifications for the party who defaulted or canceled.

Which of the following is NOT a likely consequence of an agent's misrepresentation of facts to a customer who signs a purchase contract based on the misrepresentation? The contract is voided. The agent loses his or her commission. The agent is held liable for violating the license law. The agent is excused for making an honest mistake.

The agent is excused for making an honest mistake.

An agent owes fiduciary duties to: All customers The client The cooperating broker The MLS

The client

Agent Paul is bound to inform his client of all facts that might affect the client's interests - both what Paul knows and what he "should have known." Which of these situations would not be something Paul "should know?" There is a crack in the basement wall. The air conditioner does not work. The owner of the property is HIV positive. The casement windows have broken seals.

The owner of the property is HIV positive.

Intentional misrepresentation of a material fact to get an unfair advantage is an example of... active fraud. passive fraud. false disclosure. breach of confidentiality.

active fraud.

An ostensible agency relationship is one that... allows the agent to repudiate the relationship by obtaining an estoppel order. appears to be an exclusive agency but is actually a subagency. arises from the actions of the parties involved rather than from a written agreement. is invalid unless backed by a written agreement.

arises from the actions of the parties involved rather than from a written agreement.

An ostensible agency relationship is one that... allows the agent to repudiate the relationship by obtaining an estoppel order. appears to be an exclusive agency but is actually a subagency. arises from the actions of the parties involved rather than from a written agreement. is invalid unless backed by a written agreement.

arises from the actions of the parties involved rather than from a written agreement. An ostensible agency exists by the actions of the parties involved rather than by a written agreement because, on the surface, an agency relationship appears to exist.

Dual agency is a violation of the New York license law unless.... buyer and seller agree that the agent has no fiduciary duty to either party. the agent's sponsoring broker agrees to take no commission split. either the buyer or the seller has an open listing agreement with the agent. buyer and seller consent in writing.

buyer and seller consent in writing.

The fiduciary duties of exercising care skill and diligence for an agent representing a seller would include conducting a home inspection. discovering and disclosing facts that affect the seller. writing an appraisal report. applying for a change in zoning.

discovering and disclosing facts that affect the seller.

The fiduciary duties of exercising care skill and diligence for an agent representing a seller would include... conducting a home inspection. discovering and disclosing facts that affect the seller. writing an appraisal report. applying for a change in zoning.

discovering and disclosing facts that affect the seller.

An agent who gives out information about a property without verifying it may be guilty of... intentional misrepresentation. negligent misrepresentation. passive fraud. advertising excess.

negligent misrepresentation.

The type of agency on which real estate brokerage is usually based is universal agency. general agency. special agency. exclusive agency.

special agency.

The type of agency on which real estate brokerage is usually based is.... universal agency. general agency. special agency. exclusive agency.

special agency.

An agent appointed by a listing broker with the seller's permission to work on behalf of the seller is a(n)... associate agent. dual agent. subagent. broker's agent.

subagent.

An agent for a seller has a duty to disclose to the client all of the following EXCEPT... the ability of a purchaser to complete the transaction. the ability of a purchaser to offer a higher price. any relationship the agent has with a purchaser. the ability of the agent to purchase the client's house for himself.

the ability of the agent to purchase the client's house for himself.

An agent for a seller has a duty to disclose to the client all of the following EXCEPT.... the ability of a purchaser to complete the transaction. the ability of a purchaser to offer a higher price. any relationship the agent has with a purchaser. the ability of the agent to purchase the client's house for himself.

the ability of the agent to purchase the client's house for himself. An agent for a seller has a duty to disclose such things as purchase offers, who the prospective purchasers are and if the agent has a relationship with them in any way, ability of the purchaser to complete the transaction, ability of the purchaser to offer a higher price, and purchaser's intention to resell the property for a profit.

In compliance with the duty of maintaining client confidentiality, a seller's agent must never reveal... the client's rock bottom accepting price. the property's hidden defects. the client's willingness to sell. the buyer's financial situation.

the client's rock bottom accepting price.

If a transaction does not complete, the seller's broker is still entitled to receive a commission provided that... the failure is not due to an "Act of God". the failure is due to a seller default on the purchase contract. the failure was unavoidable. the buyer is no longer willing to complete the transaction.

the failure is due to a seller default on the purchase contract.

With designated agency,.... there is no dual agency because an agent is designated to represent the buyer or seller exclusively; no single agent represents both. the interests of the principals are protected by the designation of different agents to work exclusively and separately with each principal. the transaction parties are guaranteed of receiving the full level of fiduciary duties from their agents, as each has a separate agent. a licensee is designated to act as the subagent of a licensee who represents a buyer or seller.

the interests of the principals are protected by the designation of different agents to work exclusively and separately with each principal. In designated agency, the broker designated separate brokers to represent the interests of the buyer and the seller. The broker is still the dual agent but has protected the individual clients' interests by designating separate agents for each principal.

In a cooperative sale, the commission splits are handled by... the broker who is procuring cause of the sale. the broker who first receives the commission check. the selling broker. the listing broker.

the listing broker.

A person empowered by another to perform all actions that can be legally delegated is a(n)... special agent. universal agent. general agent. designated agent.

universal agent.

A person empowered by another to perform all actions that can be legally delegated is a(n)... special agent. universal agent. general agent. designated agent.

universal agent. In a universal agency relationship, the principal uses a power of attorney to empower the agent to perform any and all actions that may be legally delegated to an agency representative.

The doctrine that holds a broker liable for the wrongful actions of his or her salesperson if the broker knew of the wrongful actions is called... implied agency. fiduciary responsibility. vicarious liability. indirect subagency.

vicarious liability.