Real Estate Units 23 and 24
A salesperson or broker can represent more than one party to a transaction if he has the oral consent of all parties. True or False
False (Under section R4-28-1101(F), "a salesperson or broker shall not accept compensation from or represent more than one party to a transaction without the prior written consent of all parties.")
A "blind ad" is one where the advertiser is anonymous to the reader. True or False?
True
An employing broker is responsible for the acts of all associate brokers, salespersons, and other employees acting within the scope of their employment. True or False?
True
If a licensee chooses to sever from the current employing broker without associating to a new broker, the license will become inactive. True or False?
True (If a licensee chooses to sever from the current employing broker without associating to a new broker, the license will become inactive.)
Commission payment to a departing licensee by the broker is a standardized procedure that is the same no matter where the licensee is employed. True or False?
False (Commission payment to a departing licensee by the broker will be made according to the independent contractor agreement entered into by the licensee and the employing broker or the agreement in effect at the time of the licensee's departure.)
Designated brokers are responsible for conducting declarative audits, as well as normal and routine audits. True or False?
False (Designated brokers are responsible for conducting declarative audits, but the Department of Real Estate conducts a normal and routine audit of the employing broker, periodically.)
Arizona requires employing brokers to carry E&O insurance. True or False?
False (Errors and omissions insurance is professional liability insurance that protects companies against claims by past clients or individuals who assert they have been wronged or damaged by the company or one of the company's independent contractors.)
The Arizona Department of Real Estate keeps an employing broker's audit for at least seven years. True or False?
False (The Department keeps an employing broker's audit for at least five years.)
It is the salesperson who is the agent in dual agency True or False?
False (The employing broker owns the employment agreements even though the sales associates of the company list the properties.)
A real estate employment agreement is required for a licensee to represent a party in a transaction. True or False?
False
Teams may advertise as entities separate from their brokerage and are not required to include the brokerage name in their ads. True or False?
False
A normal and routine audit is triggered by a complaint. True or False?
False (A normal and routine audit is performed on a random basis.)
An employing broker can always make a payment directly to the licensee of another employing broker. True or False?
False (An employing broker cannot make a payment directly to the licensee of another employing broker unless the commission was earned while the licensee was with the employing broker who wants to make the payment.)
Arizona takes its direction from specific statutory decrees for MOST issues. True or False?
False (Arizona is a common law state that takes its direction from court decisions.)
The Arizona real estate employment agreement statute requires four things. Which of the following is NOT a requirement of the statute? A) Commission spelled out B) Unambiguous words C) Commencement and expiration dates D) Cancellation clause
D
Designated brokers complete the Declarative Audit upon each license renewal on behalf of the employing broker. True or False?
True
The Arizona REALTORS® Buyer-Broker Exclusive Employment Agreement is an example of a real estate employment agreement True or False?
True
There are two ways to set up a limited liability company for an employing brokerage: as a member-managed LLC or as a manager-managed LLC True or False?
True
When a designated broker renews his license, the employing broker's license will be renewed at the same time. True or False?
True
Arizona law requires sellers to disclose known facts that materially affect a property's value, even if those facts are not easily observable by the buyer. True or False?
True (Arizona courts have held that a seller of real property must disclose all known facts that materially affect the value of the property and that are not readily observable or known to the buyer.)
A licensee wishes to protect his personal assets in the event of a lawsuit arising from a business transaction can form which of these entities? A) Corporation B) Partnership C) Professional corporation D) Incorporation
C
A buyer broker emailed the client a buyer broker agreement before the two began working together. The client downloaded the form, wet-signed the agreement, scanned the agreement, uploaded it, and emailed it to the buyer broker. What must the buyer broker employment have in order to meet the Arizona Revised Statutes for real estate employment agreements? A) A cancellation clause B) Specific terms for showing of properties C) The client's attorney's name D) Signatures of all parties
D (Refer to Young v. Rose case law. While the statute of frauds only requires the signature of "the party to be charged," ARS 32-2151.02 is a later statute that is specifically for real estate employment agreements and requires all signatures.)
A nonresident employing broker who has a trust account is not required to have the trust account maintained in Arizona. True or False?
False
A person with no real estate license may present themselves to the public as a real estate broker or salesperson. True or False?
False
Kerry's buyer was within the 10-day inspection period, doing due diligence. The buyer was unhappy with the inspection report and wanted to cancel the transaction. Kerry asked the buyer if Kerry could personally pay for some of the issues, because the seller had refused to do so, and let the transaction continue. If the buyer agrees, what disclosures are necessary in this situation? A) Kerry's financial input must be disclosed to all parties. B) Kerry must disclose this to his employing broker and to his client only. C) None. Because the buyer agrees to this, no other parties need to be notified. D) Kerry must disclose this to the Department of Real Estate.
A
Which of the following is NOT a true statement about a broker's recordkeeping duties? A) A broker must keep a canceled contract for one year. B) A broker must keep an employee agreement for five years. C) A broker must keep a rejected offer for one year. D) A broker must keep a buyer broker agreement for five years.
A (A canceled contract is the same requirement as any other transaction documents and must be kept for at least five years. ARS 32-2151.01(A) & (H).)
If a broker has to be away from the office for 24 hours to 30 days, what must the broker do? A) Select a delegated licensee, associate broker, or salesperson to perform all broker duties B) Broker must put a delegation letter in the broker's file C) Notify clients of his expected return date D) Broker can designate an associate broker or a salesperson
A (ARS 32-2127(D) governs the delegation of the person to step in for the broker, noting that there must be a delegation letter in file. Because the designated broker can delegate a salesperson for this temporary situation, Broker Management Clinics are not required.)
An unlicensed assistant may NOT A) meet a repair person at a property to let him in. B) assist a licensee at an open house. C) meet a salesperson showing a property in order to let them in. D) set an appointment for a plumber.
A (An unlicensed employee may not unlock a property for a repair person under substantive policy statement 2017.01.)
A real estate broker who wishes to start his own real estate brokerage should first decide on a name. Where does the broker go first to have the name of the brokerage approved? A) Arizona Department of Real Estate B) An attorney C) Arizona Corporation Commission D) IRS
A (the Department requires a licensee to submit the name to the Department before submitting to the Arizona Corporation Commission.)
Sheila had a new buyer who wanted to see properties in the price range of $300,000-325,000. She was already working with another buyer in the same price range. After showing her new buyer a number of homes the first day, the buyer decided she liked the yellow house but was going to think about it. Sheila took her old buyer out to see houses and decided not to show the yellow house to this buyer because she was sure her new buyer would make an offer on it later in the day and did not want both buyers to want the same house. What must Sheila do to adequately represent both buyers? A) Sheila should tell both buyers that she is unable to work them because it will be impossible to deal with them fairly. B) Sheila should show the yellow house to both clients and explain to each that she is showing both of them the property and if either or both make an offer on it, she must limit her conversations with both of them to avoid conflicts of interest. C) Sheila should choose the houses to show her clients to prevent them from making offers on the same property. D) Sheila should show greater loyalty to the buyer she has been working with the longest.
B
The buyer broker sends a buyer broker agreement to the buyer for signature. The buyer downloads the agreement, wet signs it, scans it, uploads it, and emails it back to the agent. The agent sends the buyer an email saying, "Thank you." Does the buyer broker have an enforceable agreement? Indicate the best answer. A) No B) Only if the buyer broker's signature is also on the agreement C) Under the statute of frauds, it is an enforceable agreement D) Yes
B (ARS 32-2151.02 requires four things for employment agreements to be enforceable: 1. Be written in clear and unambiguous language. 2. Fully set forth all material terms, including the terms of broker compensation. 3. Have a definite duration or expiration date, showing dates of inception and expiration. 4. Be signed by all parties to the agreement.)
Which of the following is NOT a required duty of a designated broker under the Commissioner's rules? A) Manage and supervise licensees B) Hold office meetings C) Approve licensee advertising D) Create office policies
B (R4-28-1103 covers all designated broker supervision and control. Office meetings would be a discretionary item for a broker and the licensees.)
Which of the following brokers may NOT be a PC? A) Associate broker B) Employing broker C) Delegated broker D) Designated broker
B (Real estate brokers may conduct business as self-employed brokers (sole proprietorship), corporations, general or limited partnerships, limited liability partnerships or limited liability companies. Salespersons and associate brokers cannot use the LLC or normal (nonprofessional) corporation entity but may become a professional corporation.)
The proper place for an employing broker's name on a website is A) prominently displayed only on the "splash" page or homepage. B) top of every page without scrolling down on any device. C) top of any page that discusses real estate services. D) top of any page that displays a property offering.
B (The Arizona Real Estate Advertising Rules & Guidelines brochure states that "the employing broker's name must be visible on the front page of the website and each subsequent page of the website, without the necessity of scrolling down, regardless of the screen size of the computer.")
Limited representation agency refers to A) designated agency. B) dual agency. C) subagency. D) single agency.
B (The limitation is for the purpose of limiting conflicts of interest that arise in a real estate transaction. A sales associate cannot put one principal's interest above the other principal. Dual agency simply implies that the broker is representing both parties in the transaction.)
An ad reads "$250,000, low down payment, call: 555-888-9999." Which of the following is NOT a true statement about the ad? A) Real estate licensees may not post blind ads in Arizona. B) The ad must include the salesperson's name. C) This is an example of a "blind ad." D) If a licensee is advertising this property, the employing broker's name must be in the ad.
B (The only requirement in advertising is that the employing broker's name be prominently displayed. There is no requirement for the name of the salesperson, a phone number, or an email address, only the employing broker's name.)
How much personal money may a broker have in the broker's trust account? A) $4,000 B) $3,000 C) $1,000 D) $2,000
B (There is no commingling (mixing of broker monies with client monies) violation if the broker limits his personal funds in the trust account to $3,000.)
A broker receives monies from a client as an earnest deposit on a potential transaction to put into the broker's trust account. Which of the following statements is NOT true? A) Information about the transaction must be noted. B) A period of time for holding of the monies must be stated. C) The name of the individual for whom the broker is holding the monies must be stated. D) The amount of money must be noted in the ledger.
B (There is no stated period of time required under ARS 32-2151, which does state the following: "The broker shall make deposits to trust fund accounts by deposit slips. Receipts or other documentation shall identify each transaction, the date and the amount of each deposit and the names of parties involved in the transaction represented by the deposit and monies shall be used only for the purpose for which the monies were deposited.")
Office policies are a way a designated broker manages and supervises licensees for the employing broker. Which of the following would NOT be found in good written office policies? A) The use of unlicensed assistants must be managed. B) All agents must do four hours of floor time per week. C) The employing broker assumes responsibility for the acts of their licensees. D) Upon learning of a violation, the designated broker should report the violation to the Department.
B (This is the rationale: Real estate agents and brokers walk a precarious line with IRS in order to keep the exemption for independent contractors that they not be considered employees. Demanding a licensee do office work would cross the line over to being an employee.)
Young v. Rose is a special case for Arizona real estate licensees because it sets a precedent about A) statute of frauds. B) disclosure. C) real estate employment agreements. D) as is.
C
The Real Estate Commissioner can conduct all of these types of audits EXCEPT A) electronic. B) investigative. C) declarative. D) normal and routine.
C (A declarative audit is an audit done by the broker herself online. The others are audits carried out by the Department.)
Which of the following actions may an unlicensed person legally perform? A) Open up a property for a buyer who is under contract on the property without a licensee present B) Conduct a tenant or buyer walk-through without a licensee present C) Deliver transaction documents or information to the seller D) Open the door and assist a home inspector without a licensee present
C (Delivery of documents or information to the seller is a service and can be performed by an unlicensed person under SPS 2017.01.)
Andrew is an associate broker for Grand Horizons Realty and was recently asked by his designated broker to take over the responsibilities of reviewing the transaction documents, initialing them, and making certain the files were in order before being put away. Which of the following is NOT a true statement? A) A letter from the designated broker delegating Andrew must be on file. B) Andrew could be a branch manager. C) Andrew cannot hire or fire. D) Andrew must take three Broker Management Clinics before beginning his duties.
C (If the branch manager is an associate broker, the associate broker may, when dealing with branch office transactions review and initial contracts; supervise the activity of salespersons and associate brokers; hire or sever a salesperson or associate broker; sign compensation checks; be a signer on the branch office trust account and property management trust account; write checks from the broker's trust accounts; and be responsible for the handling of all trust account funds administered by the branch manager.)
A salesperson licensee wants to have a branch office of her own, for her team. The designated broker agrees, makes the arrangements, and registers the salesperson as the branch manager. The salesperson branch manager can do everything EXCEPT A) Hire an unlicensed receptionist B) Recruit members for her team C) Review and initial transaction documents D) Be a signatory on the broker trust account
C (R4-28-304 states: "Perform office management tasks that are not statutory duties of the employing broker and be a signer on the broker's trust account and property management trust account." It takes an associate broker to be able to do the full list of duties at a branch office.)
Agents advertising their own property must do all of the following EXCEPT A) use "owner/agent" on all flyers. B) use "owner/agent" as a sign rider. C) use "owner/agent" on any correspondence. D) use "owner/agent" on all Internet advertising.
C (R4-28-502 states that "any salesperson or broker advertising the salesperson's or broker's own property for sale, lease, or exchange shall disclose the salesperson's or broker's status as a salesperson or broker, and as the property owner by placing the words 'owner/agent' in the advertisement." Correspondence may only be conversational. At the time the correspondence becomes a sales pitch, the owner/agent disclosure must be made.)
Under Arizona statute, a broker must retain certain documents in the employing broker's files for five years. Which of these is not required to be in the file? A) Any addenda to the agreement B) Purchase agreement C) Seller's property disclosure statement D) Employment agreement
C (RS 32-2151.01(F), the seller's property disclosure statement is not a requirement, mainly because it is not a state-mandated form. Sellers are required to make written disclosures, but this is a specific REALTOR® form, used only by REALTOR® members during a transaction. It is risk reduction for the broker to keep any written seller disclosure form in the transaction file, even if not required by statute.)
Advertising as a licensed sales associate in Arizona comes with requirements from the Department. Which one of these statements is inaccurate or false? A) The name of the employing broker must be on each page of a website and must be seen without scrolling down on any device. B) The name of the employing broker must be on an agent's Facebook page if the licensee discusses real estate. C) The employing broker's name must be on text messages. D) The name of the team may not be such that it gives the impression it is not part of the brokerage.
C (Real Estate Advertising Rules & Guidance brochure, social media and small messages are exempted from displaying the employing broker's name.)
Prescott Preferred Properties, LLC, has a branch office in Prescott Valley. If advertising on a flyer, the employing broker's name must appear on the flyer as A) Prescott Preferred Properties, 928-666-77- B) Prescott Preferred Properties LLC, Sally Jeffers, Broker. C) Prescott Preferred Properties, LLC, Prescott Valley Branch. D) Prescott Preferred Properties LLC.
C (The Arizona Real Estate Advertising Rules & Guidelines brochure states that "the employing broker's name must be spelled out in its entirety.)
A licensee who is changing employing brokers continues to work with the buyer client from the first broker after moving to work for the new broker. Which of the following statements is NOT accurate? A) If the first broker assigns the transaction to the new broker with the buyer client's signature as well. B) The licensee is now representing another employing broker. C) The licensee can continue to work the buyer client through the transaction. D) The first broker may not allow the licensee to continue to work with the broker's client.
C (The buyer client is the asset of the first employing broker because the licensee was representing that employing broker at the time the relationship commenced. Employing broker number one could release that buyer client to the new employing broker and that would make it legal.)
If a designated broker chooses to have a trust account for property management, which of the following is NOT a requirement? A) Purpose of the hold of money in the trust account B) Annual sweep of interest C) Monthly report to client D) Reconciliation of account every 30 days
C (Under ARS 32-2151, a monthly report to the client is not required, while the other three are requirements.)
An associate broker who manages a branch office may do all of these things EXCEPT A) hire and fire associates. B) supervise and manage licensees at the branch office. C) assume the broker's responsibility. D) review and initial contracts.
C (While the designated broker can delegate certain duties to another broker, the designated broker cannot abrogate their responsibilities and liabilities under licensing laws.)
What is the difference between commingling and conversion? A) Commingling is mixing trust account monies, while conversion is using client monies without client's permission. B) Conversion is using the trust account debit card instead of cash, while commingling is using broker's debit card for clients' purposes. C) Commingling is putting client monies in a broker operating account, while conversion is putting broker monies in a trust account. D) Conversion is using client monies, while commingling is mixing client monies with broker's own.
D
If the licensee leaves Regal Realty for Best Buy Realty, what happens to the licensee's listings and the escrows? A) Escrows are handled by Regal Realty. B) Licensees may take care of escrows and retain listings. C) Listings stay with Regal Realty. D) Everything about a transfer to another company should be in the independent contractor agreement.
D (The amount of the commission the licensee will receive is determined by the independent contractor agreement with the former broker. Should a departing licensee have open escrows at the time of departure, that licensee may not continue to work the escrows to fruition according to the licensing laws, unless the escrows are transferred to the new broker. See ARS 32-2125.01.)
A broker is advertising another employing broker's listing. Which of the following is NOT a true statement about the ad? A) The ad may use a logo along with the employing broker's name. B) The ad must include the advertising licensee's employing broker's name. C) The ad must include the listing employing broker's name. D) The ad must include the designated broker's name.
D (The employing broker's name is required to be prominently displayed on all ads. There is no requirement for the designated broker's name, the salesperson's name, a phone number, or an email address—only the employing broker's name.)
A licensee is entitled to all earned commissions while with an employing broker, even if payment takes place after the licensee's departure. True or False?
True (A licensee is entitled to all earned commissions while with an employing broker, even if payment takes place after the licensee's departure.)