principles 1
Information About Brokerage Services
-A link to a completed IABS Notice in a readily noticeable place on the homepage of each business website should be provided. -The font size of the link should be 10-point if spelling out "Texas Real Estate Commission" and 12-point if using "TREC".
Competency
-It is the obligation of a real estate agent to be knowledgeable as a real estate brokerage practitioner. -The agent should be informed on market conditions affecting the real estate business. -The agent should exercise judgment and skill in the performance of the work.
Which of the following is NOT true regarding a license holder's obligation to disclose a property defect:
-Only if the Buyer asks -A license holder is required to disclose a property defect if the seller has disclosed the defect at all.
Fair Housing Act
-a federal law that prohibits discrimination in housing based upon race, color, religion, or national origin and was amended to include sex, disability, and familial status -does not apply to housing developments that are designed for senior citizen living
Home Mortgage Disclosure Act
-allows HUD to spot problematic lending patterns and helps support lawsuits or other disciplinary measures -requires lenders to disclose specific lending information for HUD to map lending patterns
Discriminatory Practices
-closely resemble the Fair Housing Laws -The protected classes include race, color, religion, sex, national origin, ancestry, familial status, or disability. -prohibit license holders from answering questions that would lead to disclosures about the protected classes
Integrity
-employment of prudence and caution -Don't advise on matters outside the scope of your real estate license. -avoid misrepresentation -Don't exaggerate, misrepresent, or conceal any important facts relating to a property or transaction.
Americans with Disabilities Act
-establishes requirements for telecommunications relay services -prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities
Disclosure
-if it will help the client, the agent should share it -including sharing of material facts about a property
Equal Credit Opportunity Act
-illegal to discourage anyone from applying for credit -illegal to offer anyone credit on terms that are less favorable than terms offered to someone with similar qualifications
Obedience
-is only required if legal -the principal is the ultimate decision-maker
Community Reinvestment Act
-requires lenders to assist their local communities by participating in community development projects -enables all parts of a community to have access to credit
Reasonable Care
-standard is based on what most agents would do -assumes agent expertise will be used in handling client's concerns
Competency
-stay informed on market conditions affecting the real estate business -complete the continuing education -exercise judgment and skill in the performance of the work -limit your activities to only the services that you're fully qualified to provide
Loyalty
-the buyer's agent should get the lowest price possible, even if it means less commission -the principal's best interests come before the agent's interests
At what age does a child living with his or her parents no longer qualify for familial status protection under the Fair Housing Act?
18, they are no longer considered a child by the Fair Housing Act and do not receive the act's protections.
In what year was the National Association of REALTORS® Code of Ethics first adopted?
1913
Which parties need to be told if an agent is representing anyone?
A license holder must disclose orally or in writing to others of their representation of a party to a real estate transaction at the first contact.
The National Association of REALTORS® Code of Ethics consists of:
A preamble and 17 articles
Which of the following statements accurately describes the basic issues involved in the Jones v. Mayer Co. case?
A real estate company refused to sell a home because of the prospective buyer's race and was found guilty of violating the Civil Rights Acts of 1866
How often must a real estate license be renewed?
A real estate license must be renewed every two years.
Which of these tenants is protected by the Fair Housing Act?
A seeing-impaired woman who uses a service dog in a pet-free building
According to the Canons of Professional Ethics and Conduct, the IABS notice can be provided to consumers:
According to the Canons of Professional Ethics and Conduct, the IABS notice can be provided to consumers either in person, by mail, or by email.
Which of the following is NOT one of the unethical or illegal activities performed by Ulysses?
Acting as a real estate agent without a license
Which statement is NOT true regarding death on a property?
Agents are able to disclose deaths at their discretion
Why should real estate agents refrain from giving legal advice to clients?
Agents aren't licensed to give legal advice and if they do, they could be held liable
ADA
Americans with Disabilities Act
Which of the following is an example of misrepresentation?
An agent thinks there are hardwood floors beneath the carpet of a property and implies to the buyer that there are, when in fact, there are not.
What is a protected category according to Texas fair housing laws, but not national ones?
Ancestry
How often will you be formally evaluated in the workplace?
Annually
Why do most brokerages fall within the scope of the ADA, and therefore must be extra careful about accessibility?
Because of their location or because they have 15 or more employees
Special Agency
Broker & Client
General Agency
Broker & Sales Agent
What law (chapter) imposes a code of ethics and standard of conduct on members of the Commission?
Chapter 572
Universal Agency
Child & Parent or Executor of will
Which of the following phrases would be considered discriminatory if used in an advertisement?
Christian Neighborhood
What is the BEST way to avoid giving misinformation (and consequently, violating the Texas Deceptive Trade Practices-Consumer Protection Act)?
Cite a source for any information you give a client about a property
Which was the first housing discrimination protection act?
Civil Rights act of 1866
CRA
Community Reinvestment Act
What form does the Canons of Professional Ethics and Conduct say must be on display in a readily noticeable location in each of the real estate brokers places of business?
Consumer Protection Notice 1-2`
HUD
Department of Housing and Urban Development
In an agency relationship, the agent owes the principal the fiduciary duties of loyalty, obedience, accounting, confidentiality, reasonable care, and what else?
Disclosure
If a lender refuses to make Harry a 30-year mortgage just because Harry is 85 years old, they will have violated:
ECOA
Sally and Fred are two single people buying a home together. The lender is threatening to deny them a loan because he does not like their lifestyle. If the lender does that, it will be a violation of the:
ECOA
ECOA
Equal Credit Opportunity Act
A person who is employed to rent and by the owner needs a real estate license
FALSE
Ulysses did nothing wrong in instructing the mortgage company to take money out of Sam's account.
FALSE
FHA
Fair Housing Act
Protected classes in the Fair Housing Act of 1968 include race, color, religion, national origin, sex, disability, and what other category?
Familial Status
Families Crave Resorts Not Small Damp Ramps
Familial Status Colors Religion National Origin Sex Disability Race
Canons of Professional Ethics and Conduct
Fidelity Integrity Competency Consumer Information Discriminatory Practices Information About Brokerage Services
Fraud vs. Misrepresentation
Fraud is intentional; misrepresentation is not. Fraud generally includes both affirmative misrepresentations and affirmative concealment, and the person making the misrepresentation is aware of the true facts.
When asked to inquire about the previous owner's death, how should Tom have responded?
He should tell his clients he's legally not allowed to inquire about the death
HMDA
Home Mortgage Disclosure Act
A tenant comes to a property manager asking to put in shower bars to accommodate their disability. When they property manager informs the landlord, the landlord balks, because the tenant is not a wheelchair user. What should the property manager do? Choose the BEST option.
Inform the landlord that not all disabilities are visible, and warn them they could be violating the Fair Housing Act by refusing accomodations
IABS
Information About Brokerage Services
What does the integrity portion of the Canons of Professional Ethics charge license holders with avoiding?
Misrepresentation
What is the definition of misrepresentation?
Misrepresentation is an unintentional mistake, written or spoken.
Discriminatory Practices
No real estate license holder shall inquire about an owner of real property which indicates any preference, limitation, or discrimination based on a person's inclusion in a protected class.
An elderly couple is going to rent their vacant basement for extra income. The couple does not want a family with children. The couple asks their granddaughter, who is a real estate agent, to help them with finding tenants. Is this legal? Why or why not?
No, the couple is not allowed to discriminate against families with children if they are helped by their granddaughter because she is a license holder
Does misrepresentation require malicious or deceptive intent?
No, the seller, broker, or agent may be liable for misrepresentation even without malicious or deceptive intent.
Was Tom right in discouraging his clients from taking the closing documents to an attorney?
No, you should never discourage clients from seeking the advice from an attorney
Carla has clients looking for a rental property who only speak Spanish. What should she do to accommodate them?
Non-English speakers should be treated the same as English-speakers, and should therefore be shown the same properties, regardless of language. However, there are official translated lease forms that could help them understand the contract they're signing.
OLD CAR
Obedience (if legal) Loyalty (100%) Disclosure (full) Confidentiality (forever) Accounting (forever) Reasonable care
How long does person who believes that they have been injured by the discriminatory practices of a real estate license holder have to file a complaint with HUD?
One Year
Using the general terms of agency law, which party is represented by another party?
Principal
What is one important difference between REALTORS and other practitioners?
REALTORS are held to a higher standard than the law by the NAR Code of Ethics
Fair Housing Act Protected classes
Race Color Religion National origin Sex Disability Familial status
Which of these actions requires a real estate license to legally perform?
Shane helping his friend sell his home for $500.
You are working with a Black buyer, Tom, and you decide to show him homes in a neighborhood with a high Black population. This illegal act is known as:
Steering
DTPA
Texas Deceptive Trade Practices-Consumer Protection Act?
The Texas Real Estate License Act is Chapter 1101 of the:
Texas Occupation Code
What federal act was passed to help eliminate redlining?
The Community Reinvestment Act
Which one of the following actions is most likely to be a violation of the Texas Deceptive Trade Practices-Consumer Protection Act?
The Deceptive Trade Practices Act prohibits the license holder from knowingly and/or intentionally deceiving the consumer in the selling or leasing of any real property. Providing a list of professionals to choose from does not violate the law. Continue
Who designates a broker member of the Commission to serve as a presiding officer?
The Governor
What is the difference between the NAR Code of Ethics and the Canons of Professional Ethics and Conduct?
The NAR Code of Ethics is enforced by NAR; the Canons of Professional Ethics and Conduct are enforced by TREC
Information About Brokerage Services
The Notice could be delivered by the broker or sales agent, first class mail or overnight common carrier delivery service, in the body of or as an attachment of an email. Brokers and agents need to provide this notice to consumers.
What is the name given to the duties owed by agents to their clients?
The duties owed by agents to their clients are known as fiduciary duties.
According to the Canons of Professional Ethics, the primary duty of a real estate agent is to represent:
The interests of their client
If the Code of Ethics and the law conflict, which takes precedence?
The law
What is the best definition of blockbusting?
The practice of encouraging people to sell their homes due to beliefs about how the entry of a protected class will affect an area's property values
The introduction to the National Association of REALTORS® Code of Ethics is called the:
The preamble.
Landlords are required to allow tenants to make modifications to their property in order to accommodate their disability. Who's responsible for paying for these modifications?
The tenant
What categories of people are barred from serving on the Commission?
Trade association employees and lobbyists are barred from membership
What is one of the major tenets in the NAR Code of Ethics?
Treat all parties fairly and honestly, not just those you represent
Under the ECOA, it is legal for a lender to ask if a borrower is separated.
True
Who is at fault for not filing the closing paperwork in a timely manner?
Ulysses (Agent)
Was it a violation for Tom to agree to inquire about the previous owner's death?
Yes, Tom's inquiry was in violation of Fair Housing Laws
Since Ulysses said he would take care of closing, did he technically do anything wrong with Sam's money?
Yes, agents should never hold onto money that does not belong to them.
Which of the following people would need a real estate license?
a person selling their neighbor's home for a free
The protected class of disability is defined as anyone who has:
a physical or mental impairment that affects the performance of one or more major life activities
What is a main function of the Texas Real Estate Commission?
adopt and enforce rules for governing real estate practitioners
Integrity
employment of prudence and caution to avoid misrepresentation
What two important classifications were added to the list of protected classes under the 1988 Housing and Community Development Act amendment?
familial status and disability
If a salesperson has no interest in opening their own brokerage, why might they still want to get a broker's license?
for marketing purposes
What should a license holder do when reporting facts in an advertisement?
quote the source of the information
The National Association of REALTORS® Code of Ethics:
requires a higher standard than the law requires
The preamble of the National Association of Realtors Code of Ethics refers to which rule to use as a guide for making ethical decisions?
the Golden Rule
What is the name of the professional organization that created the Code of Ethics?
the National Association of REALTORS