Chapter 4: Licensing Requirements and License Maintenance

The maximum deductible per licensee per claim for defense costs must be?

$1,000 or less.

The maximum deductible per licensee per claim for damages must be?

$2,500 or less

except from getting a license

- An individual owner who's selling or leasing personally owned property -Any business entity (including partnerships, associations, corporations, and regular employees of the business) that sells property belonging to the business -An attorney at law who is performing primary or incidental duties -A person acting as a receiver, trustee, administrator, or executor, or any guardian or person acting under a court order -A person who is acting under the authority of a deed of trust or will -Any person who's performing duties as a public officer -Any person who deals exclusively in oil and gas leases and mineral rights -A housing authority and any of its regular salaried employees who sell or lease property that's owned by the housing authority, or sublet property the housing authority holds as a tenant -Banks, savings and loan associations, and small business investment companies that provide loans related to real estate or engage in foreclosures -Hotel and motel employees -Unlicensed assistants who perform only administrative tasks for a brokerage company

General requirements for salesperson?

1) 18yrs old 2) complete 6o hrs cause 3) pass exam 4) pass background 5) be sponsored by a broker 6) complete 30-hr pose licensee course within 1 year to get permanent license

Licensees may obtain their E&O insurance through the insurance carrier approved by the commission, but all E&O insurance must meet the following requirements?

1) All real estate activities covered by state license law must also be covered by the policy. 2) A per-claim limit must be $100,000 or more. 3)The maximum deductible per licensee per claim for damages must be $2,500 or less. 4)The maximum deductible per licensee per claim for defense costs must be $1,000 or less.

There are two types of real estate licenses available to Mississippi residents:

1) Salesperson: Any person who is employed or engaged by a licensed real estate broker to perform real estate activities, for compensation or otherwise. All real estate tasks completed by a salesperson must be done on behalf of the salesperson's responsible broker. 2)Broker: Someone with real estate experience and advanced education who holds a broker's license and directly engages in real estate brokerage for compensation. Brokers may employ other licensees and are responsible for supervising them. Brokers are also responsible for the activities of unlicensed employees and assistants.

General requirement for broker?

1) be 21 2) complete 120 hrs 3) subject to MS jurisdiction (Mississippi taxes (including income tax, excise tax, and road and bridge privilege tax laws). 4) have 1 yr of experiences as an active salesperson or 150 hrs of college real estate corses 5) pas background investigation 6) pass the broker examination 7) sign the form saying will not hire salesperson for 36 months since 1st active salesperson license 8) be an elector only in MS

How to change and active license to inactive?

1) licensees must notify the commission in writing, 2) return the active license, and 3)pay a fee. Once the license becomes inactive, the licensee must immediately cease any activities that require a license.

To maintain an inactive license?

1) licensees need to renew it by filing a renewal application 2) paying a renewal fee every two years. However, licensees with inactive licenses are not required to meet CE requirements.

Activities that require a license

1) sell, lease, exchange, renting, managing or accounting, or auctioning real estate 2) Offering to sell, buy, exchange, lease, rent, manage, or auction real estate 2) Manage real estate 3) Negotiate real estate transaction( or attempting to negotiate the sale, purchase, rental, lease, exchange, auction, or management of real estate) 4) Advertise or present oneself as license (Advertising oneself as engaged in real estate activities) 5) Procure a buyer for real estate transaction 6) perform licensed activities for timeshare and condominiums

In order to perform real estate tasks, a licensee must have an active real estate license. After receiving a permanent license from the commission, licensees must complete the following to keep their licenses active?

1)Renew the license every two years. 2)Complete required continuing education (CE). 3)Complete the license-renewal process. 4)Maintain sponsorship by a licensed broker as required. 5)Pass a background investigation.

Someone with real estate experience and advanced education who holds a broker's license and directly engages in real estate brokerage for compensation. Brokers may employ other licensees and are responsible for supervising them. Brokers are also responsible for the activities of unlicensed employees and assistants.

Broker

Who are also responsible for the activities of unlicensed employees and assistants.?

Brokers

Carmen passed the exam to get her Mississippi salesperson's license, and although she's still looking for the right broker with whom to associate, she's a go-getter and can't wait to start her real estate career. Carmen's neighbor Monique is ready to sell her home, and Carmen has already signed a listing agreement with her. Which of the following is true?

Carmen isn't legally allowed to conduct real estate activities on her own. Everything has to be done through her broker.

All Mississippi licensees must have______________in order to manage their professional risk.

E&O insurance

protects licensees in the event of an inadvertent omission, act, or error in real estate practice that causes a consumer financial harm?

E&O insurance

Who are not required to complete the background check?

Individuals who are over the age of 70 AND who have held a broker's or salesperson's real estate license for more than 25 years are not required to complete the background investigation.

When are you exempt from continued education?

Individuals who have held a Mississippi license for at least 25 years AND are 70 or older are completely exempt from CE requirements.

Leona received her license a month ago, but hasn't yet obtained E&O insurance. What will happen to Leona's license as a result of this?

Leona's license will be put on inactive status.

Any licensee with an active license who is also a member of the _________________ only needs to obtain eight CE credits each renewal period (the commission credits the rest).

Mississippi Legislature

Odette would like to sell her own home, which is located outside of Jackson. What's the minimum level of real estate licensure she must possess to do so?

None (Individuals can sell their own properties without a license. Remember, a license is only needed if Odette performs real estate activities for others for compensation)

Bianca was the buyer's agent for a transaction that recently closed. If the seller refuses to pay the commissions as agreed in the listing agreement, can Bianca sue the seller for unpaid compensation?

Only Bianca's broker may bring legal action against the seller. - If a third party owes money to a licensee and refuses to pay what is owed, only the broker responsible for the licensee may bring legal action against the third party (the salesperson may not do so).

who can also hold Mississippi real estate licenses?

Partnerships, limited liability companies, and corporations

What's one plausible way to manage risk in Mississippi?

Purchase errors and omissions insurance.

A _______ is any person who is employed or engaged by a licensed real estate broker to perform real estate activities.

Salesperson

Any person who is employed or engaged by a licensed real estate broker to perform real estate activities, for compensation or otherwise. All real estate tasks completed by a salesperson must be done on behalf of the salesperson's responsible broker.

Salesperson

Lynda has decided to take some additional time off work to spend with her new baby, so she's placed her license on inactive status. Which of the following is true? 1) She can still conduct real estate activities as long as she's supervised by a broker. 2) She can't practice real estate, but she must still renew her license to maintain the inactive status. 3) She isn't required to renew her license until she's ready to reinstate it. 4) She must still be associated with a broker while her license is inactive.

She can't practice real estate, but she must still renew her license to maintain the inactive status. -Having an inactive license means Lynda can't practice real estate. She must renew her license in order to maintain inactive status.

Salesperson Dahlia is representing a seller on behalf of her broker, Leo. Salesperson Ken is representing a buyer on behalf of his broker, Stefani. Dahlia's listing agreement provides for compensation to the buyer's agent in the transaction. From whom will Ken receive his compensation?

Stefani - Licensee compensation must be paid through the licensee's broker. Brokers can't pay a commission for real estate services to anyone other than their own associated licensees or to another real estate broker.

Which one of the following options describes a situation in which a person who's performing a real estate brokerage activity in Mississippi must have a license? 1) An individual performs a brokerage activity on behalf of someone else. 2) An individual performs a brokerage activity to help sell someone else's property. 3) an individual sells personally owned real estate. 4) The individual performing the brokerage activity for someone else receives something of value in exchange.

The individual performing the brokerage activity for someone else receives something of value in exchange.

Broker Albert supervises two affiliated salespersons. Albert was found guilty of a license law violation, and his license was suspended. Which of the following is true about what else happened once Albert's license was suspended?

The licenses of all of Albert's affiliates will be suspended, as well, until they can find new brokers.

Mississippi licensees may directly receive compensation only through _______.

Their responsible broker

Once a broker or salesperson applicant has successfully passed the licensing exam and fulfilled all other licensing requirements, the state will provide a temporary real estate license. How long is it valid?

This license is valid for one year from the first day after it is issued.

Marcus is 19 and wants to be a broker in Mississippi. He's never worked in real estate before, but after taking his pre-licensing course, he feels ready to get started. Once he completes the pre-licensing education hours, is there anything that would prevent him from taking the broker's license exam

Yes, broker applicants must have at least one year of experience as a licensed salesperson and be 21yrs old

Which one of the following people would be exempt from Mississippi real estate licensure requirements? 1) A broker who's employing licensed real estate salespeople 2) a hotel manager 3) A nonresident who conducts real estate business in Mississippi 4) A salesperson who's being paid for assisting in the sale of a property for another person

a hotel manager

Licensees may not pass off licensed real estate tasks to an?

administrative assistant or any other unlicensed team member.

Once the license becomes inactive, the licensee must immediately cease?

any activities that require a license.

Real estate

any leasehold or fee or estate in land, excludes mineral leases, interests

When are temporary licensees issued a permanent license?

are issued a permanent license as soon as they complete their post-licensing requirements.

How long must you have experience as a licensed salesperson before applying for a brokers license?

at least one year

If a broker's license is suspended, expired, or revoked, then all of the licensees under that broker's supervision will?

automatically have their licenses suspended, as well, and may not continue engaging in licensed real estate activities. To begin working again, the suspended licensees may transfer their license affiliation to another broker by filing a transfer application.

In the event that a license is suspended or revoked, the licensee must immediately?

cease all licensed real estate activities.

Kumar procrastinated a bit, but in the last three months before his renewal date, he completed 20 hours of CE. How many of these hours can he carry over into the next renewal period?

four, Licensees who complete more than the 16 required hours of CE in one license term may carry over a maximum of six hours (which must have been completed within the last three months of the renewal term) into the next renewal term. Since Kumar completed 20 hours, he can carry over all four of his surplus hours into the new renewal period.

If a broker's license is suspended, expires, or is revoked, then all of the licensees under that broker's supervision will automatically?

have their licenses suspended, as well, and may not continue engaging in licensed real estate activities until they find a new broker with whom to associate.

Licensees who have inactive licenses or who have transferred to another broker may be compensated by their previous responsible broker if?

if the compensation were earned while the licensee was working under the previous broker's supervision.

licenses with ____________ licenses are not required to meet CE requirements.

inactive

E&O insurance covers

inadvertent acts, attorney's fees and court costs, and negligence or misrepresentation in personal property transactions.

Any compensation paid to a licensee must be paid by the ___________and no one else.

licensee's broker

In order to receive the carry over of 6hrs of credit towards Continued education how close did it have to be done within the renewal term?

3 months

Although exempt from completing continuing education requirements for their first year of licensure, licensees who receive a temporary license have one year to complete?

30 hours of post-licensing education.

MREC requires all licensees to provide proof of having E&O insurance within ______________ days of licensure. Licensees who fail to meet this requirement will have their licenses put on__________ status.

30, inactive

Kumar procrastinated a bit, but in the last three months before his renewal date, he completed 20 hours of CE. How many of these hours can he carry over into the next renewal period?

4, Licensees who complete more than the 16 required hours of CE in one license term may carry over a maximum of six hours (which must have been completed within the last three months of the renewal term) into the next renewal term. Since Kumar completed 20 hours, he can carry over all four of his surplus hours into the new renewal period.

Licensees who complete more than 16 hours of CE in the same license term may carry over a maximum of ____________(which must have been completed within the last three months of the renewal term) into the next renewal term.

6 hrs

Salesperson vs broker course hours?

60, 120

Mississippi salesperson applicants must pass the national portion of the licensing exam with a minimum score of _______.

70%

what must you get on the state exam to pass ?

75%

Any licensee with an active license who is also a member of the Mississippi Legislature only needs to obtain eight CE credits each renewal period (the commission credits the rest).

8

Which of the following individuals is exempt from real estate licensing requirements? 1) A close relative of the property owner who accepts less than $500 for negotiating the property sale 2) An auctioneer who is hired to auction a foreclosed property 3) A property manager who leases apartments on behalf of a property owner 4) A trustee who's acting as the executor of an estate by selling the decedent's home

A trustee who's acting as the executor of an estate by selling the decedent's home - Anyone who's performing duties as a trustee is exempt from the real estate licensure requirement.

Anne is a broker who worked with a salesperson named Ben from another brokerage to close a large property sale. How should Anne pay Ben for his assistance on the transaction?

Anne must give Ben's compensation to Ben's responsible broker. -Responsible brokers can't directly compensate licensees who aren't under their supervision. In order to pay Ben, Anne must pay Ben's responsible broker, who will in turn compensate Ben for his work on the transaction.

Pam wants to ease into the real estate business without getting her Mississippi real estate license immediately. What jobs can she pursue that don't require a license? 1) Affiliated salesperson under the supervision of a licensed broker 2) condo sales associate 3) receptionist at a real estate brokerage 4) residential property manager

receptionist at a real estate brokerage

On or before the license expiration date for each two-year term, the licensee must?

submit proof of completing CE requirements and pay the renewal fee.

To be eligible for a Mississippi broker's license?

the applicant must, among other requirements, demonstrate experience as a licensed salesperson for at least one year immediately before applying for the broker's license.

When a broker terminates an affiliated licensee, the broker must?

the broker must notify MREC of the change in the associate's status and return the associate's license to the commission within three days of the termination.

who may bring legal action against the third party (the salesperson may not)?

the broker who's responsible for the licensee

If the licensee does not pay the renewal fee within the two-month grace period?

the real estate license will be canceled.

A salesperson may sue?

the responsible broker for commissions owed

After being suspended bc broker's license was suspended how do they begin working again?

the suspended licensees may transfer their license affiliation to another broker by filing a transfer application.

t/f A license can be voluntarily or involuntarily placed on inactive status, and the licensee can't practice real estate until the license is reactivated.

true

All applicants for a Mississippi real estate license must demonstrate _________ and ____________ to engage in real estate activities.

trustworthiness, competence

How long is each license good for?

two years

No transaction-related compensation may be paid to an?

unlicensed person

Licensees may ___________ or involuntarily have their license status changed to inactive.

voluntarily

Responsible brokers can't directly compensate licensees who?

who aren't under their supervision

does A person who is acting under the authority of a deed of trust or will exempt from getting a license?

yes

does Each state has its own authority to administer and enforce licensing laws?

yes

does a A person acting as a receiver, trustee, administrator, or executor, or any guardian or person acting under a court order exempt to get a license?

yes

does a person Any person who deals exclusively in oil and gas leases and mineral rights exempt from getting a license?

yes

is a person who is An individual owner who's selling or leasing personally owned property exempt from having a license?

yes

Lindsey has helped a few friends negotiate the sale of their properties without charge, and now she's considering going into business doing this kind of work for a fee. Does Lindsey need a real estate license?

yes, Lindsey is performing real estate activities for others and for compensation, which is considered a licensed activity under Mississippi license law.

Bryant just passed his licensing exam and is thrilled to finally start working with his broker on some real estate transactions! Once he completes his post-licensing course, how many continuing education hours will Bryant need to finish before his temporary license expires?

zero, During the first year of licensure, licensees are exempt from CE requirements. They do, however, need to complete 30 hours of post-licensing education to earn their permanent license.

Naomi is a real estate licensee in Mississippi who oversees three other affiliated licensees. What type of license does Naomi hold?

Broker

When a broker terminates an affiliated licensee, the broker must notify MREC of the change in the associate's status and return the associate's license to the commission within ________days of the termination.

3

Licensees who don't fulfill the post-licensing requirements within _______months after receiving their temporary license will have their license put on ______ status. The licensee then has one more year to complete the post-licensing education and receive a permanent license.

12, inactive

Broker applicants may take ____________ hrs of pre-licensing education in lieu of having 12 months of active, licensed salesperson real estate experience.

150 hours

Licensees must complete _____ hours of CE every two years to maintain an active license.

16

To qualify for a salesperson's real estate license in Mississippi, an individual must be at least _______ years old.

18

How long is the grace period if you don't pay on time?

2 months

Mary is being sued by her buyer client Shanice, who claims Mary failed to inform her about mold in a home she bought. Shanice claims that having the information would have deterred her from buying the property. Which of the following is a true statement about this situation? 1) E&O insurance cannot help Mary pay legal expenses related to Shanice's accusations of professional negligence. 2) E&O insurance could help Mary pay legal expenses, but only those related to accusations of misrepresentation, not professional negligence. 3) E&O insurance could help Mary pay legal expenses related to Shanice's accusations of professional negligence, but only if Mary is at fault. 4) E&O insurance could help Mary pay legal expenses related to Shanice's accusations of professional negligence, whether or not Mary is at fault.

E&O insurance could help Mary pay legal expenses related to Shanice's accusations of professional negligence, whether or not Mary is at fault. - E&O insurance can help pay legal expenses related to accusations of professional negligence, whether or not the licensee is at fault.

What happens if you fail to pay the renewal fee after your two year term?

Failing to pay the fee will result in a notice of delinquency from the commission. Licensees may pay the renewal fee within the two-month grace period and will also pay a penalty (the same amount as the renewal fee).

License laws protect

consumers by ensuring professionalism and competence within the industry. Each state has its own authority to administer and enforce licensing laws.

Inadvertent omission mean?

failing to act carefully or considerately

E&O insurance does NOT cover

nuisance cases; judgments against the licensee; out-of-court settlements; fraudulent, criminal, or dishonest acts; or punitive damages. - E&O insurance may or may not cover real estate commission claims. - E&O insurance policies may have ownership exclusions, meaning that the policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.

Licensees who don't fulfill the post-licensing requirements within 12 months after receiving their temporary license will have their license put on inactive status. The licensee then has _________ more year to complete the post-licensing education and receive a permanent license.

one

If a third party owes money to a licensee and refuses to pay what is owed what can happen?

only the broker who's responsible for the licensee may bring legal action against the third party (the salesperson may not). A salesperson may sue the responsible broker for commissions owed, however.

Responsible brokers can't directly compensate licensees who aren't under their supervision. In order to pay compensation to an unaffiliated licensee for real estate activities, the broker must?

pay the licensee's responsible broker, who will in turn compensate the licensee.