Level 5 Quiz

If an active broker leaves an office vacancy, it must be filled within:

14 calendar days If an active broker leaves an office vacancy, it must be filled within 14 calendar days.

Which of the following best describes a joint venture?

After the business goal is finished, the investors part ways instead of continuing business together. While in most partnerships, the partners will continue doing business together until they end the partnership, in a joint venture, investors plan to part ways after the stated venture is finished.

Arya is a broker. She recommends her buyer use her favorite, trusted contractor to renovate the floors in the home they just bought. She'll receive a kickback from this referral but she decides not to disclose the kickback because it's quite small. Evaluate Arya's choice.

Arya was wrong. She should have disclosed the kickback. Kickbacks are payments made to a licensee for a service unrelated to the real estate transaction or a service that does not fall under the responsibility of the licensee.

As a favor, you are helping your uncle purchase a home. He gives you funds in check form and puts your name on the check. What should you do?

Ask your uncle to write a new check that is payable to the right person. If a client delivers funds to you but puts your name on the check as the recipient, ask them to issue a new check or sign the check and add the words: "For Deposit Only to (your broker's escrow account)" and give the check to your broker.

Which of the following is something TCPA and CAN-SPAM have in common?

Both give people the option to refuse advertisements. Both TCPA and CAN-SPAM give people the option to refuse advertisements. They address "opt-out" options.

Which act specifically addresses sexually explicit emails and states that messages with sexually oriented material must include the warning "SEXUALLY-EXPLICIT:" and have a "brown paper wrapper"?

CAN-SPAM Act The CAN-SPAM Act regulates sexually explicit emails with specific regulations and stipulations.

What is the main difference between general and limited partnerships?

In limited partnerships, the limited partners have less personal liability than have general partners Limited partners have less liability.

Odette is a broker. She is putting out several Facebook ads to help boost her business. She wants to include the following information: Her brokerage's name Two pictures of ready-to-buy homes Point of contact information A personable blurb to draw in clients However, Odette has a very limited amount of space in her ad. How should Odette prioritize the information she includes?

Include the point of contact information because it is required by law. Internet ads must include the point of contact information right next to the brokerage's name.

A business entity in which parties are protected against personal liability for business debts is a:

LLC A limited liability company (LLC) is a business entity in which parties are protected against personal liability for business debts. An LLC is kind of like the best of both worlds between a corporation and a partnership

Jazmine moves from Miami to Sarasota where she accepts a job at a new brokerage. She starts her job with her new employer but it takes her three months to notify the FREC about the change of employer. Did Jazmine follow the rules?

No, Jazmine should have notified the FREC within ten days. Sales associates must inform the FREC, through a prescribed form, within ten days if they change employers.

What protections do a sole proprietor's personal assets have from their business's losses and liabilities?

None. Sole proprietors are personally liable for their businesses.

Brokers must deposit escrow funds immediately. When defining the term "immediately," what is an important point to consider?

Saturdays, Sundays, and legal holidays are not counted as business days. Immediately is defined as the end of the third business day after the receipt of the funds. Saturdays, Sundays, and legal holidays are not counted as business days.

Gail and Marilla form a limited partnership. Gail is a licensed sales associate and registered as a general partner. Marilla is a licensed broker and registered as a limited partner. Marilla focuses on advertising and Gail focuses on monetary brokerage services. Analyze Gail and Marilla's partnership. Are there any problems?

This is not legally valid. The general partner needs to be a licensed broker. If a limited partnership wishes to register as a real estate brokerage, they must ensure at least one general partner is a licensed broker, ensure any general partners providing real estate services are licensed as brokers, and prohibit sales and broker associates from registering as general partners.

Olivia receives escrow funds on Friday. She gives them to her broker on Monday, by when must the broker deposit the funds?

Wednesday Escrow funds must be deposited by the end of the third business day after receipt. It does not matter whether the sales associate or broker receives the funds - the funds must be deposited three business days after they are received. Three business days after Friday is Wednesday.

Which of the following is a commonly used tool for mitigating a brokerage's vicarious liability risks?

a brokerage office policy manual The use of a brokerage office policy manual is a great tool for mitigating a brokerage's vicarious liability risks.

What is a deposit?

a payment made from one party to another that shows a sincerity to fulfill the transaction A deposit is a payment made from one party to another that shows a sincerity to fulfill the transaction.

What are per se violations?

acts that are considered inherently illegal Per se violations are acts that are considered inherently illegal. They have been proved to be illegal time and time again.

A blind ad is an ad in which a(n):

broker attempts to promote or solicit real estate activity without disclosing the fact that they are a licensed real estate broker A blind ad is an ad in which a broker attempts to promote or solicit real estate activity without disclosing the fact that they are a licensed real estate broker. Blind ads are illegal in Florida.

The CAN-SPAM Act governs the use of:

commercial email advertising The CAN-SPAM Act regulates commercial email advertising.

Tyrell is a broker. He deposits his personal paycheck into his brokerage trust account along with a client's earnest money. What is Tyrell guilty of doing?

commingling Commingling is the mixing of personal funds with business funds and is illegal.

An account that holds something (an asset) on behalf of one party until a transaction is completed and that something can be given to the other party is a(n):

escrow account An escrow account holds funds on behalf of one person until a real estate transaction is completed.

A corporation:

is considered a legal person From a legal standpoint, a corporation is considered to be a person.

Broker compensation:

is negotiable between the parties Among other things, a broker's commission is negotiable between the parties. It does not have to be commission-based but can take multiple forms and must be based on a lawful condition.

You are a member of the FREC who is trying to decide if a brokerage's temporary shelter qualifies as a branch office. The temporary shelter: Has four sales associates who appear to be working there every day Has had three real estate transactions close there in the past week You decide the temporary shelter is:

likely a branch office A temporary shelter can serve as a branch office. It should be registered as such if sales associates are permanently working there and real estate transactions close there.

Given that Zack is a limited partner and Zoe is a general partner, what kind of partnership are they most likely to have?

limited partnership A limited partnership usually has at least one limited and one general partner.

A broker's advertisement MUST include the broker's:

name and name of the brokerage All broker advertisements MUST include the brokerage name, and an identification of the advertised person as a real estate broker.

Linus, Charlie, and Lucy are all agents in Crawlington. They agree to set their commission rates in the same range to even out the playing field (and hopefully earn each of them a higher commission). What illegal activity are Linus, Charlie, and Lucy engaging in?

price fixing Price fixing is any effort made by competitors to jointly establish a fixed rate, price, or commission and it is considered an antitrust violation. It occurs when competitors agree to do things like standardize commission rates.

A commission is commonly a percentage of the:

sales price A commission is a percentage of the sales price.

During calls, telemarketers are required to say:

who they are and for whom they are calling According to the TCPA, telemarketers MUST say who they are, on behalf of whom they are calling, and how to contact them.

Consider that Big Bucks could have decided to work with Orion and two other investors to purchase Waterfront Towers. They could have: Registered all investors as one single entity in the eyes of the law Purchased Waterfront Towers and continued to do business together This would NOT have been a joint venture, but rather the formation of a:

corporation Corporations are legally created business entities representing the interests of more than one person.

What is commingling?

the illegal act of mixing personal funds with a client's funds Commingling is the illegal act of mixing personal funds with a client's funds.

When discussing deposits in the state of Florida, depositing funds immediately means by the end of which business day after the sales associate or broker receives the funds?

the third business day Immediately means by the end of the third business day after the sales associate or broker receives the funds.

Sales associates should only receive compensation from:

their sponsoring broker Sales associates should only receive compensation from their sponsoring broker.

Gonie decides to use a friend's temporary shelter as a brokerage office: She and her sales associates are permanently assigned there. Real estate transactions close there. The temporary shelter:

qualifies as a branch office If sales associates are permanently assigned to a temporary shelter and if transactions close there, the shelter is a branch office.

Bradley and Alejandra are making paper brochures to advertise their brokerage. Bradley says they must include the brokerage's phone number, by law. Alejandra states they don't need to include it and can just provide the email address. Who is correct?

Alejandra is correct - print advertisements do NOT have to include the brokerage's phone number. In Florida, print advertisements are NOT required to contain a phone number or address. If this was an internet advertisement, however, it'd be required to include point of contact information including the mail address, street address, email address, phone number, and fax number.

Graciela is a broker based in Jacksonville. She wants to open up her own brokerage but she is concerned about the complications and liabilities of escrow accounts. What advice could you give to Graciela?

"In Florida, brokerages don't have to maintain their own escrow accounts. You have other options!" Florida does not require brokerages to maintain their own escrow accounts.

You are a broker who employs and oversees four sales associates. One of your newer sales associates, Diego, asks you for advice on the email marketing campaign he is working on. He asks you, "What should my emails look like?" Evaluate which piece of advice would be most helpful.

"Make sure you don't have misleading header or subject content." According to CAN-SPAM, it is prohibited to send undesired commercial messages to a customer's email or wireless device, have misleading header content, or have misleading subject content.

Aparna is a sales associate. She does not see why keeping records for five years is necessary. As her broker, evaluate which piece of advice would be most helpful to Aparna's work.

"Providing records might become necessary if a legal issue comes up. We need to be prepared for the FREC to call us up." Brokerages are required by law to maintain records for five years. This is often because they may be needed in the event of litigation.

Alondra is a licensed broker. She wants to start her own brokerage and considers doing so out of an available rental space down the street. She asks you for advice and you tell her:

"That seems like a good idea, just make sure you store your accounting and transaction records there." Brokerage offices must store all accounting and transaction records. These can be stored electronically.

Margarita is opening a new brokerage office. She asks you what she needs to maintain a valid office. You tell her:

"Your office needs to store the records relevant to your transactions." Brokerages need to operate out of an office. That office must store records, be registered with the Department of Business and Professional Regulation (DBPR), and contain at least one room in a stationary building that will allow for privacy while closing transactions.

What should all licensees remember when it comes to how compensation and duties relate?

Compensation does not equal duties. Compensation ≠ loyalty, an agency relationship, or duty. A licensee can represent a buyer and be paid by the seller or visa-versa. Typically, agents for both the buyer and the seller are paid a commission expressed as a percentage of the final sales price of the seller's property.

Emanuel owns a brokerage. He is a minimalist and doesn't want to include the names of his sales associates on the sign. What should Emanuel do?

Emanuel should not include the sales associates' names if he does not want to because doing so is not a signage requirement. A brokerage sign does not need to include the names of all of the employed sales associates. It must include the name of the broker, however.

Firat is offering rental information for a small fee. He decides not to give his clients receipts for the rental information because the fee is so small. Evaluate Firat's decision.

Firat is required to provide his clients with a receipt. A brokerage could offer rental information for a fee. If a broker does do this, they need to give the client a receipt that includes that the client will be repaid under certain circumstances.

Malik is a broker who has opened an escrow account for his brokerage through a title company. Malik's sales associate receives funds on a Tuesday. The sales associate delivers the funds to Malik on Wednesday. Malik needs to deposit the funds by the end of which day? Does that day change because the escrow account is through a title company?

Friday. No. Funds must be deposited immediately, meaning by the end of the third business day after the sales associate or broker receives the funds. This applies to all trust accounts and does not vary.

Gracie establishes a brokerage but, soon after, the FREC shuts her business down. What is one reason her brokerage may have been shut down?

Gracie did not register her office with the Department of Business Professional Regulation (DBPR). A brokerage office must register with the Department of Business and Professional Regulation (DBPR) in order to be legal, valid, and conduct business.

Haley, Denis, and Bianca wish to register their general partnership as a brokerage. They: Are all licensed as sales associates Register their general partnership with the DBPR Evaluate whether or not their registration as a brokerage is legally acceptable.

It is not legally acceptable because none of them are licensed brokers. If a general partnership wishes to register as a real estate brokerage, they must register with the DBPR under the partnership's name, ensure at least one partner is a licensed broker, ensure any partners providing real estate services are licensed as brokers, and prohibit sales and broker associates from registering as general partners.

The following relates to a brokerage in Sarasota: The employing broker's name is Miguel Zeballos. The employing broker's unofficial nickname is "Zeb." Miguel employs three sales associates: Chandler, Zelda, and Asia. Which of the following answers includes the information necessary to create a valid office sign?

Miguel Zeballos; Lic. Real Estate Broker; 999.829.2827 Office signs should include the broker's name, the words "licensed real estate broker" or "lic. real estate broker," and the trade name, if applicable.

What is conversion?

a license holder's personal use or misuse of money belonging to other Conversion is a license holder's personal use or misuse of money belonging to others.

Candi offers rental information for a fee. Does Candi need to provide these clients with a receipt?

Yes, Candi is legally obligated to provide a receipt. If a broker charges a fee in exchange for rental information, they need to give the client a receipt that includes, in writing, that the client will be repaid 75% of their fee if they do not get a rental from the listing, or 100% of their fee if the broker provides out-of-date or false rental information.

Price fixing is defined as:

any effort made by competitors to jointly establish a fixed rate, price, or commission and is considered an antitrust violation is known as price fixing

A buyer and a seller have conflicting demands regarding how their escrow funds will be dispersed. They try to sort out their demands via mitigation but don't come to a solution. They decide to present their case to a third party. Before doing so, they agree to adhere to the third party's decision, whatever it may be. They are agreeing to:

arbitration Arbitration is a process whereby the parties to a dispute present their conflict to a disinterested third party and honor the third party's binding judgement. Before beginning the arbitration, both parties have to agree, in advance, to consent to the decision of the disinterested third party.

The TCPA applies to:

autodialers and fax machines TCPA governs autodialers, fax machines, and voice messaging systems. It does NOT regulate emails or brochures.

Christopher is a property manager in charge of a property management account. He receives a $575 security deposit from Robin, his tenant. What should Christopher do with this money?

deposit the money into the property management account Property management accounts are a type of trust account that usually hold property management funds, such as security deposits.

For how long does a brokerage office need to retain their records?

five years Brokerages need to keep their records for five years.

You are a broker. You receive a deposit check for $350. How long should you keep a record of these funds?

five years When a broker receives money — deposits, checks, funds, you name it — they must keep a record of that money for at least five years from the date they received it.

Mike is sending out several solicited faxes to prospective clients. He has several data points he wants to include in the fax: The date he sends the fax The time he sends the fax His legal name His nickname His phone number Two property descriptions Two sentences of promotional content Mike wants to keep his fax to one page. He must delete two data points to make it all fit. Which two data points should Mike choose to omit?

his nickname and two property descriptions Fax advertisements are governed by the Junk Fax Prevention Act. Faxes need to include the date and time the fax is sent, the sender's legal name, and the sender or sending machine's phone number.

Asim and Heather work for two different brokerages. They sit down at their local McDonald's to eat french fries and talk about their work. They start talking about commission rates. Evaluate the scenario. Asim and Heather are:

in danger of price fixing Commission rates must always be negotiable between brokers and clients - it's the law!

Broker Blessing is caught in the middle of a buyer's and seller's claims that they have the right to the escrow money. While the buyer and seller resolve their disputes in court, Blessing knows she has no claim to the escrow funds. Blessing pursues a(n):

interpleader In the question's scenario, the parties are pursuing litigation, which is the legal process of resolving a dispute in court that involves an interpleader or declaratory judgment. An interpleader is a court procedure meant to resolve a dispute when a party holds funds they know they do not own, but to which multiple other parties lay claim.

Greg and Josefina are the two parties to a transaction. They cannot agree on how their escrow funds should be disbursed, so they go to court to resolve the conflict. This is an example of:

litigation Litigation is the legal process of resolving a dispute in court that involves an interpleader or declaratory judgment.

Gregory is an agent helping Miranda sell her home. Gregory advertises Miranda's home as "For Sale by Owner," as he thinks this will draw in more customers. Evaluate what this is an example of and whether or not it is legal.

misrepresentation, illegal Advertising a home as "For Sale by Owner" when it is not, in fact, up for sale by the owner without the help of a licensee, is misrepresentation and is illegal.

A violation of antitrust law in which competitors agree to portion the market amongst themselves is called:

market or customer allocation A violation of antitrust law in which competitors agree to portion the market amongst themselves is called market or customer allocation.

Percy (a broker) incessantly calls Maynard (a homeowner) to ask if Percy can sell Maynard's home for him. Maynard requests to be taken off the company's call list seven times, but Percy ignores Maynard's request. Analyze Percy's behavior. Percy:

needs to stop calling Maynard and remove Maynard from the brokerage's call list Customers who request to be removed from a brokerage's do not call list must be removed, regardless of what the brokerage desires.

You have worked for a brokerage for eight years. You created several call lists and collected rental information for listing services. When you leave the brokerage, you are:

not allowed to take these records with you, even if you created them

What are conflicting demands?

opposing, unresolvable demands made by the buyer and seller in a transaction regarding escrowed property disbursement Conflicting demands are opposing, unresolvable demands made by the buyer and seller in a transaction regarding escrowed property disbursement.

Ja Rule is advertising a home with a small, stone-bordered swimming pool in the back. In his advertisements, he says: "The home has a beautiful and luxurious swimming pool in the back with lovely stone detailing." Which of the following is Ja Rule utilizing:

puffing Puffing is the use of exaggerated claims (technically opinions) to achieve a sale.

Gonie Falik is a Florida sales associate looking to operate her real estate career in the most tax-friendly manner possible. She gets with her CPA, Mauro Garcia, to discuss the business legal structure she can operate under. If Gonie is like most licensees, her CPA will suggest that she operate as either of these two business entities:

professional association or professional LLC The deciding factors influencing the choice of business entity have to do with the size of the licensee's personal organization, the specific nature of their real estate business and legal relationships, and the resulting tax ramifications. In Florida, a professional association or professional LLC will be the choice that makes the most sense for most licensees.

A broker, Rumpelstiltskin Johnson, has a broker's license associated with his full name. His full name, however, is quite hard for his clients to say. He starts going by "Stew Johnson" in all of his advertisements. Evaluate his decision. Rumpelstiltskin Johnson:

should NOT have done this without registering "Stew Johnson" as a trade name or including his full name in the ads You must advertise using the name associated with your license unless you register another name or include your full name along with your nickname.

What is puffing?

the making of exaggerated claims (technically opinions) in order to achieve a sale or some other objective Puffing or puffery is the making of exaggerated claims (technically opinions) in order to achieve a sale or some other objective.