COURSE 1 CHAPTER 11
Licensees must not engage in fraudulent, deceptive, or dishonest practice. Which of the following is not considered a fraudulent, deceptive, or dishonest practice? Demanding a compensation that the licensee is entitled to from a seller. Making false or misleading statements that are likely to induce a person to buy or sell a property. Advertising in any manner that is misleading or inaccurate. Commingling trust funds belonging to another person with the licensee's own money or property.
Demanding a compensation that the licensee is entitled to from a seller.
What will the Commissioner do if the balance of the recovery fund falls below the level necessary to fulfill its purposes? Place a 2% tax on all real estate commissions earned by licensees until the balance of the recovery fund is restored. Determine an additional assessment fee of up to $100 for all licensees until the balance of the recovery fund is restored. Charge an additional $10 when issuing new licenses until the balance of the recovery fund is restored. Add a 1% sales tax on property sales until the balance of the recovery fund is restored.
Determine an additional assessment fee of up to $100 for all licensees until the balance of the recovery fund is restored.
The Commissioner will satisfy all claims from the recovery fund by which date? Each claim will be satisfied within 90 days of the order directing payment of the claim becoming final. Each claim will be satisfied by January 1st after the order directing payment of the claim becomes final. Each claim will be satisfied within 6 months of the order directing payment of the claim becoming final. Each claim will be satisfied by July 15th of the calendar year after the year in which the order directing payment of the claim becomes final.
Each claim will be satisfied by July 15th of the calendar year after the year in which the order directing payment of the claim becomes final.
On what date each year must the Commissioner review the amount of money spent or allocated for providing information to the public on housing issues during the previous calendar year? January 1st February 1st February 15th June 1st
February 1st
When a licensee is found to have been engaging in fraudulent, deceptive, or dishonest practices, what will the Commissioner do? Immediately suspend the licensee's license. Issue an order requiring the licensee to show cause why their license should not be revoked or suspended, or the licensee censured. Immediately order all of the licensee's open transactions and contracts to be frozen. Fine the licensee a penalty fee of up to $300.
Issue an order requiring the licensee to show cause why their license should not be revoked or suspended, or the licensee censured.
The seller in a transaction is unable to complete the transaction, can the listing broker take any of the buyer's trust funds to cover his or her commission and expenses? Yes, a broker may claim trust funds to cover expenses and lost commission. No, a broker may not claim any portion of any trust funds deposited with him or her by a purchaser. Yes, a broker may claim trust funds to cover expenses but may not for lost commission. Yes, a broker may claim trust funds up to 50% of the commission rate he or she was to be paid.
No, a broker may not claim any portion of any trust funds deposited with him or her by a purchaser.
If the seller of a property already has a seller's broker agreement with a licensee, can another broker negotiate the sale of that property on behalf of the owner? Yes, provided the owner makes both brokers aware that he is being represented by two brokers. Yes, any broker may attempt to sell a property provided he or she has the owner's consent. No, a licensee may not attempt to sell a property if the owner already has representation to do so with another licensee. If a broker has not been able to sell a property for 90 days, then a second broker may also attempt to negotiate the sale of that property on behalf of the owner.
No, a licensee may not attempt to sell a property if the owner already has representation to do so with another licensee.
May a broker employ a non-licensee to help him or her in closing real estate transactions? No, it is unlawful for a licensee to engage or authorize any unlicensed person to act as a real estate broker, salesperson, or closing agent on the licensee's behalf. Yes, a non-licensee can engage in real estate if fully supervised by a licensee at all times. Yes, a broker may have up to 3 non-licensees acting on his or her behalf, but a salesperson may not. Yes, an unlicensed person may assist on closing transactions, but may not assist during offers and negotiations.
No, it is unlawful for a licensee to engage or authorize any unlicensed person to act as a real estate broker, salesperson, or closing agent on the licensee's behalf.
Can a person advertise as a real estate salesperson if they do not hold a valid real estate license? No, it is unlawful for a person to advertise or represent him or herself as a real estate agent without a valid real estate license. Yes, provided the person obtains a license before commencing work as a salesperson. Yes, anyone can advertise as a salesperson. No, unless the person employs a real estate licensee at the same business address.
No, it is unlawful for a person to advertise or represent him or herself as a real estate agent without a valid real estate license.
During a real estate transaction, can a licensee insist a party uses a specific closing agent? No, licensees may not require a person to use a particular entity in connection with a real estate closing, including: lenders; attorneys; brokers; and closing agents. Yes, a licensee can stipulate who is involved in a transaction. Only a licensee representing the seller in a transaction can stipulate that a specific closing agent be used. Only a licensee representing the buyer in a transaction can stipulate that a specific closing agent be used.
No, licensees may not require a person to use a particular entity in connection with a real estate closing, including: lenders; attorneys; brokers; and closing agents.
May a licensee guarantee future profits from the purchase of a property to a potential buyer? Yes, a guarantee of future profits is mandatory within a purchase agreement. Yes, it is a licensee's fiduciary duty to tell clients about the potential profit or loss from buying a property. Yes, a guarantee of future profits is a strong selling point and should be explained to potential buyers. No, licensees must not guarantee future profits that may result from the purchase of real estate, unless the guarantee is fully disclosed in the instrument of sale.
No, licensees must not guarantee future profits that may result from the purchase of real estate, unless the guarantee is fully disclosed in the instrument of sale.
If an existing listing contract exists between a seller and a broker, when can another broker sign a listing agreement with the same seller? After the existing contract has been in effect for 90 days. Not until the existing contract has expired. At any time the seller wishes. 14 days after the existing contract expires.
Not until the existing contract has expired.
What in the prohibitions section of Minnesota license law limits the authority of the Commissioner to take actions against a licensee for fraudulent, deceptive, or dishonest practices not specifically described in that section? Power of attorney Nothing NAR The Code of Ethics
Nothing
What must a person seeking compensation from the recovery fund do before applying? Be in the process of pending civil action against a real estate licensee. Obtain a final judgment from a court against a real estate licensee. Wait 6 months from the date of the licensee's actions that caused the person to seek compensation. Notify the Commissioner, in writing, of the licensee's misconduct.
Obtain a final judgment from a court against a real estate licensee.
Which damages can an applicant seek recovery for from the recovery fund? Recovery of the amount of actual loss incurred by the applicant plus attorney's fees. Recovery of the amount of actual loss incurred by the applicant plus interest on losses. Recovery of attorney's fees plus interest on losses. Only recovery of the amount of actual loss incurred by the applicant. No attorney's fees or interest on losses are recoverable.
Only recovery of the amount of actual loss incurred by the applicant. No attorney's fees or interest on losses are recoverable.
If a licensee's license is revoked for failure to pay taxes, what must the licensee do to have his or her license reissued? Pay the delinquent taxes plus interest at the rate of 12%. Pay the delinquent taxes and a penalty fee equal to the amount of taxes originally owed. Pay the delinquent taxes, get a tax clearance certificate from the Commissioner of Revenue, and forward the certificate to the Commissioner. Pay the delinquent taxes and complete 50 hours of community service.
Pay the delinquent taxes, get a tax clearance certificate from the Commissioner of Revenue, and forward the certificate to the Commissioner.
In order to have a license reinstated following a payment from the recovery fund, a licensee must do what? Repay the recovery fund twice the amount originally paid from the fund. Pay interest on the sum paid from the recovery fund at 12%. Repay the recovery fund twice the amount originally paid from the fund; obtain a surety bond of $40,000. Repay the recovery fund twice the amount originally paid from the fund; pay interest on the sum paid from the recovery fund at 12%; obtain a surety bond of $40,000.
Repay the recovery fund twice the amount originally paid from the fund; pay interest on the sum paid from the recovery fund at 12%; obtain a surety bond of $40,000.
After the Commissioner has issued an order to show cause to a licensee, what other action, if any, may the Commissioner take? Fine the licensee up to $250. Seize the licensee's trust accounts. Suspend the licensee's license pending the final determination of the hearing. Take no action.
Suspend the licensee's license pending the final determination of the hearing.
Which of the following would be grounds for the Commissioner to revoke a license? The Commissioner finds that a licensee of is subject to a judgment of mental incompetence. The Commissioner finds that a licensee was a disclosed dual agent. The Commissioner finds that a licensee moved to Iowa and reported the change of address. The Commissioner finds that a licensee has decided to open a real estate school.
The Commissioner finds that a licensee of is subject to a judgment of mental incompetence.
Which of the following is not grounds for the Commissioner to revoke a license or deny an application? The Commissioner finds that a licensee or applicant is no longer in existence. The Commissioner finds that a real estate licensee or applicant also has an appraisal license. The Commissioner finds that a licensee or applicant has ceased to do business as a broker or salesperson. The Commissioner finds that a licensee or applicant is subject to a judgment of mental incompetence.
The Commissioner finds that a real estate licensee or applicant also has an appraisal license.
What power does the Commissioner have to discipline licensees who engaged in fraudulent, deceptive, or dishonest practices? The Commissioner may deduct up to 33% of the licensee's wages. The Commissioner has no powers in these circumstances. The Commissioner may demand the licensee attends 30 hours of seminars covering ethical business practices. The Commissioner may deny, suspend or revoke the licensee's license, or may censure the licensee.
The Commissioner may deny, suspend or revoke the licensee's license, or may censure the licensee.
If a licensee or applicant owes the state delinquent taxes of $500, what action, if any, will the Commissioner take? The Commissioner will take no action. The Commissioner will not renew or issue a license. The Commissioner will fine the licensee the amount of taxes owed. The Commissioner will garnish the wages of the licensee until the amount of taxes owed are paid in full.
The Commissioner will not renew or issue a license.
What will happen to a licensee if a payment from the recovery fund is made against him or her? The licensee will be placed on probationary status. The licensee will be fined up to $500. The licensee will be fined up to 50% of the payment made against him or her. The licensee's license will be automatically suspended.
The licensee's license will be automatically suspended.
If a broker's license is revoked by the Commissioner, what, if anything, happens to the salespersons supervised by that broker? The salespersons must nominate a person to act as temporary broker. The licenses of the salespersons become inactive. The salespersons must pay the Commissioner a $25 fine. The salespersons must complete all open transactions within 30 days.
The licenses of the salespersons become inactive.
If a salesperson engages in fraudulent, deceptive, or dishonest practices, what power does the Commissioner have? The power to deny, suspend or revoke the salesperson's license. The power to fine the salesperson's broker up to $500. The power to fine the salesperson up to $500. The power to place the salesperson on probationary status.
The power to deny, suspend or revoke the salesperson's license.
What is the purpose of the real estate education, research and recovery fund? To provide ongoing education to real estate licensees. To help the real estate business recover from times of market recession. To repay outstanding orders against licensees who have caused financial harm upon citizens through misconduct. To promote real estate business values throughout Minnesota.
To repay outstanding orders against licensees who have caused financial harm upon citizens through misconduct.
The maximum sum payable by the recovery fund is $______ per claimant, per transaction. $150,000 $300,000 $50,000 $1,000,000
$150,000
What is the real estate education, research and recovery fund fee for all license renewals? $20 $50 $80 $5
$20
The maximum sum payable by the recovery fund against a single licensee is ______. $50,000 $250,000 $100,000 $400,000
$250,000
If a licensee is suspended after an order to show cause is issued, within how many days of the suspension must the hearing be held? 10 7 30 15
30
Which of the following best describes a "hold harmless clause" in a purchase agreement? A "hold harmless clause" is a clause in a contract stating that a party will not be liable for any damages to the other party. A "hold harmless clause" is a clause in a contract stating that the seller will hold a property until such time as the buyer has sufficient funds to purchase it. A "hold harmless clause" is a clause in a contract stating that a party will be liable for any damages to the other party. A "hold harmless clause" is a clause in a contract stating that the seller will hold the price of a property at a set point for 6 months.
A "hold harmless clause" is a clause in a contract stating that a party will not be liable for any damages to the other party.
What is a person who violates any provision of the Minnesota statutes governing real estate, or violates any rule or order of the Commissioner guilty of? A felony A breach of contract Civil disobedience A gross misdemeanor
A gross misdemeanor
Which of the following is not considered a fraudulent, deceptive, or dishonest practice by a licensee? Making a material misrepresentation. Acting on behalf of more than 1 party to a transaction with the knowledge and consent of all parties. Making a false statement in any information provided to the Commissioner. Obtaining or attempt to obtain a real estate license by fraud, misrepresentation, or deceit.
Acting on behalf of more than 1 party to a transaction with the knowledge and consent of all parties.
What can an innocent salesperson do if the license of his or her broker is suspended by the Commissioner? Act without broker supervision for up to 30 days. Continue to work but at 75% of his or her regular commission rate. Apply to the Commissioner for a transfer to an actively licensed broker. Finish any open transactions but not start any new ones.
Apply to the Commissioner for a transfer to an actively licensed broker.
If a payment is made against a licensee from the recovery fund, what will the Commissioner do? Fine the licensee the amount paid against him or her. Order the licensee completes 100 hours of community service. Put the licensee on probationary status. Automatically suspended the licensee's license.
Automatically suspended the licensee's license.
