PA RE Fundamentals Quiz #13

Unlicensed people may host open houses that are not conducted for the public and communicate property information to licensees. a. True b. False

A TRUE. Unlicensed people may not perform activities for which a license is required, including telemarketing. They may host open houses that are not conducted for the public and communicate, but not interpret or explain, property information to the licensees.

If the broker delegates the duties of supervising and directing an office, the person assuming these duties must hold a license as a. associate broker. b. employing broker. c. salesperson. d. managing broker.

A. ASSOCIATE BROKER. If the broker delegates the duties of supervising and directing an office (as manager), the person assuming these duties must be an associate broker. The broker of record, however, is still ultimately responsible for the activities in a branch office.

Who is ultimately responsible for the activities of all licensees in a branch office? a. Broker of record for the firm b. Associate broker designated by the broker of record for the branch office c. Salesperson licensee designated by the broker of record for the branch office d. Individual licensees insofar as their own activities

A. BROKER OF RECORD FOR THE FIRM. If the broker delegates the duties of supervising and directing an office (as manager), the person assuming these duties must be an associate broker. The broker, however, is still ultimately responsible for the activities in a branch office.

All of the following must satisfy an education requirement prior to licensure EXCEPT a. cemetery salespersons. b. campground membership salespersons. c. time-share salespersons. d. rental listing referral agents.

A. CEMETERY SALESPERSONS. A cemetery salesperson is employed by a broker or a cemetery broker for the exclusive purpose of the cemetery lot sales. No education or examination is required for this license.

A broker receives a check for earnest money from a buyer and deposits the money into an escrow or trust account. This protects the broker from a charge of a. commingling. b. novation. c. lost or stolen funds. d. embezzlement.

A. COMMINGLING. The escrow account must be used exclusively for escrow purposes. The broker may not commingle these monies with the broker's business or personal funds; nor may the broker misappropriate money that should be held in escrow with the broker's business or personal funds.

A salesperson wants to change offices. The salesperson returns her current license along with the required fee and the change of employment notification. At which time may the salesperson be involved in real estate activities on behalf of the second broker? a. Immediately upon mailing the change of employment notification b. Only when the second broker receives the new license c. Within ten days after the application for change has been mailed d. At the time the salesperson agrees to change to the second broker

A. IMMEDIATELY UPON MAILING THE CHANGE OF EMPLOYMENT NOTIFICATION. The change of employment notification serves as temporary license. A current license will be issued at the new location (as long as it is an approved office) for the unexpired license period.

A buyer submitted an earnest money check along with the offer to purchase. However, the seller refused the offer. At which time may the buyer receive the earnest money check? a. Immediately b. As soon as the funds are cleared c. Upon permission of the seller d. Upon buyer's written request

A. IMMEDIATELY. Although the broker must deposit these funds by the end of the business day following their receipt, if the funds are in the form of a check in connection with an offer to buy or lease real estate, the broker may hold the check until the offer is accepted, at which time the check must be deposited into the trust account by the end of the next banking day. If the offer is not accepted, then the broker (salesperson or associate broker) can return the uncashed check to the buyer or lessee.

Which statement regarding the Pennsylvania Real Estate Commission is FALSE? a. Members of the Commission are selected by the state association of REALTORS®. b. The Commission makes and enforces the rules by which real estate licensees must abide. c. Examinations that must be taken by applicants for real estate licensing are administered by an independent testing company rather than by the Commission. d. The Commission must submit annual reports to legislative committees in the state senate and house of representatives.

A. MEMBERS OF THE COMMISSION ARE SELECTED BY THE STATE ASSOCIATION OF REALTORS®. Members of the Real Estate Commission are appointed by the governor (202(a)), not the state association of REALTORS®. The Commission prescribes subjects for testing, but the department contracts with a professional testing service to write and administer exams (403). The Commission also promulgates the Rules and Regulations (404) and reports to legislative committees (408).

If a licensed salesperson violates a provision of the license law without the consent or knowledge of the supervising broker, a. the salesperson's license may be revoked. b. only the broker's license may be lost. c. both the salesperson and the broker may lose their licenses. d. the broker will be fined for the salesperson's violation.

A. THE SALESPERSON'S LICENSE MAY BE REVOKED. Section 702 of the RELRA limits the disciplinary action that may be taken against an employing broker when a licensee is disciplined. If the broker had no knowledge and did not consent, the salesperson's license may be revoked without action against the broker.

All five real estate commissioners licensed as brokers are appointed by the governor and confirmed by the senate for five-year staggered terms, and the commission elects a chairman from its members annually. a. True b. False

A. TRUE. The five real estate commissioners licensed as brokers must have been engaged in the real estate business for at least ten years. All of the commissioners are appointed by the governor and confirmed by the senate for five-year staggered terms. The Commission annually elects a chairman from its members.

Until a transaction is consummated or terminated, a broker must retain all funds in the escrow account. a. True b. False

A. TRUE. A broker must retain all funds in the escrow account until the transaction is consummated or terminated. Regardless of the language in an agreement, a dispute is presumed unless the parties sign documents authorizing the release of escrow funds.

The Bureau of Professional and Occupational Affairs created a Charging Unit that makes prosecutorial decisions, and decisions to dismiss complaints. a. True b. False

A. TRUE. The Bureau of Professional and Occupational Affairs created a Charging Unit in 2006 to provide better, more timely, and more efficient processing of complaints than has been the case in the past. This unit makes prosecutorial decisions, including negotiated consent agreements and recommendations for formal actions by prosecutors, and decisions to dismiss complaints.

A real estate licensee may be disciplined for a. acting for more than one party in a transaction with the knowledge of and consent in writing from all parties. b. accepting a commission or other valuable consideration from a person other than the employing broker. c. preserving the records relating to any real estate transaction for five years. d. placing a For Sale sign on a property with the written consent of the owner.

B. ACCEPTING A COMMISSION OR OTHER VALUABLE CONSIDERATION FROM A PERSON OTHER THAN THE EMPLOYING BROKER. Section 604 of the RELRA lists more than 24 specifically prohibited acts, among which is accepting a commission from anyone other than the employing broker. Licensees who engage in a prohibited act may be fined or have their licenses suspended or revoked.

Generally, anyone who acts for another person in matters concerning the sale or lease of real estate must be licensed EXCEPT a. one who is personally representing a dealer in real estate. b. anyone acting under a power of attorney. c. a relative of the party. d. a next-door neighbor.

B. ANYONE ACTING UNDER A POWER OF ATTORNEY. Sections 304 of the RELRA and 35.202 of the Regulations establish 11 exclusions from requirements for licensure, including owners who sell or rent their own property, those acting under a recorded power of attorney from the owner or lessor of real estate, and attorneys-at-law who receive a fee but do not represent themselves as brokers.

A broker is NOT permitted to pay a commission to a principal, whether the buyer or the seller, in a real estate transaction. a. True b. False

B. FALSE. A broker is permitted to pay a commission, fee, or other valuable consideration only to licensees employed by the broker, another licensed real estate broker (as in cooperating transactions), and to a principal in a real estate transaction (buyer or seller) as long as written disclosure is provided to all principals.

All licensees are required to renew electronically, except for those licensees who do not have Internet access, who are instead required to apply for renewal in person at the Commission's office. a. True b. False

B. FALSE. For licensees who choose not to renew electronically, renewal applications will be available for download on the Commission's Web site and can be completed and mailed to the Commission. A licensee who does not have Internet access is required to submit a request for application by mail or e-mail.

Any person who proposes to engage in real estate transactions of a promotional nature in Pennsylvania must register with RELRA unless the property is located outside Pennsylvania. a. True b. False

B. FALSE. RELRA requires that any person who proposes to engage in real estate transactions of a promotional nature in Pennsylvania, regardless of whether the property is located within or outside Pennsylvania, first registers with the Commission.

The Pennsylvania State Police requires each applicant to attach a criminal record check dated within 90 days of submission of the license application. a. True b. False

B. FALSE. The Real Estate Commission requires applicants to attach a criminal record check completed by the Pennsylvania State Police to their application for licensure. The criminal record check must be dated within 90 days of submission of the license application.

The broker is responsible for maintaining the signed acknowledgement portion of the Consumer Notice that was provided for at least three years following consummation of the transaction. a. True b. False

B. FALSE. The broker is responsible for maintaining copies of records pertaining to any transaction for at least three years following consummation of the transaction. When no transaction results from a brokerage relationship, the signed acknowledgment portion of the Consumer Notice that was provided must be retained for six months.

Licensees from a state that has reciprocity who change their principal place of business to the state where the reciprocal license is held are exempt from passing an examination. a. True b. False

B. FALSE. The intent of reciprocity agreements is to allow licensees from one state to engage in licensed activities in other states. A licensee who changes a principal place of business to the state where the reciprocal license is held is required to obtain the standard license from that state.

A person received a real estate license and practiced real estate for 15 months before making the license inactive. Within what period must the individual reactivate the license without having to retake the appropriate examination? a. Three years b. Five years c. Seven years d. Ten years

B. FIVE YEARS. An individual who does not reactivate a license within five years must retake the appropriate examination in order to be issued a license. Brokers and salespersons must obtain 14 hours of continuing education before they can reactivate a license.

What activity may an unlicensed assistant carry out? a. Independently hold an open house for the public only if the licensee is not available b. Independently hold an open house for other licensees c. Telemarketing for buyer prospects under the direction of the licensee d. Show properties to an out of town buyer

B. INDEPENDENTLY HOLD AN OPEN HOUSE FOR OTHER LICENSEES. Unlicensed people (including unlicensed personal assistants) may not perform activities for which a license is required, including telemarketing. They may, however, host open houses that are not conducted for the public (such as open house tours for licensees) and communicate, but not interpret or explain, property information to the licensees.

A very active and successful associate broker has formed a team consisting of herself and two other licensees to assist her. The Commission allows this broker of record to pay commission checks for all three licensees a. directly to the team leader. b. into a qualified association formed for this purpose. c. into a trust account especially set up for this purpose. d. however the team leader desires.

B. INTO A QUALIFIED ASSOCIATION FORMED FOR THIS PURPOSE. Act 14 of 2009 allows real estate licensees who work for the same broker to form qualified associations for the express purpose of receiving compensation from their brokers. The qualified association may not hold itself out as offering real estate services.

A broker of record a. is employed by another broker. b. is the licensee responsible for the activities in a real estate corporation. c. is a broker who is permitted to sell dwellings only for the builder-owner. d. oversees the activities of a cemetery broker.

B. IS THE LICENSEE RESPONSIBLE FOR THE ACTIVITIES IN A REAL ESTATE CORPORATION. The broker of record is the individual broker responsible for the licensed real estate activities of a partnership, association, or corporation licensed as broker.

Which of the following is the broker of record, also known as the employing broker? a. The associate broker who manages one of the branch offices b. The individual broker responsible for the real estate transactions for the firm c. Any associate broker who hires licensed assistants d. Any licensee who is designated by the broker to represent a party in the transaction

B. THE INDIVIDUAL BROKER RESPONSIBLE FOR THE REAL ESTATE TRANSACTIONS FOR THE FIRM. The regulations define the broker of record as the individual broker responsible for the real estate transactions of a partnership, association, or corporation licensed as a broker. Only one individual may be recognized as the broker of record, regardless of the number of offices the firm operates. The broker of record is also known as the employing broker.

A person holding a salesperson's license is hired to assist an associate broker. Who is responsible for the assistant's real estate activities? a. Individual salesperson b. Associate broker for whom the salesperson is associated as assistant c. Broker of record d. All three are equally responsible

C. BROKER OF RECORD. The activities for which a salesperson is licensed are performed under the supervision and ultimate responsibility of the employing broker.

Which of the following is a requirement for Pennsylvania real estate licensure? a. Recent color photograph of applicant b. Verification that applicant is a U.S. citizen c. Criminal record check d. May not have been convicted of a felony or misdemeanor

C. CRIMINAL RECORD CHECK. The Real Estate Commission requires that applicants include a criminal record check completed by the Pennsylvania State Police with their license application. Applicants must provide details of any conviction, plea of guilty or nolo contendere to a felony or misdemeanor, and any sentence imposed.

A broker must keep records of all real estate transactions a. for at least one year following the closing date. b. for at least three years following the listing date. c. for at least three years following the date of consummation or termination. d. indefinitely.

C. FOR AT LEAST THREE YEARS FOLLOWING THE DATE OF CONSUMMATION OR TERMINATION. Records of real estate transactions must be retained for three years following the consummation or termination of the transaction.

What, if anything, is required when a licensee sells a personal property? a. Must list with employing broker b. Must list with an impartial broker c. Must inform all prospective purchasers that the seller holds a real estate license d. Disclosure required only if the prospective buyers ask

C. MUST INFORM ALL PROSPECTIVE PURCHASERS THAT THE SELLER HOLDS A REAL ESTATE LICENSE. Section 35.283 of the Regulations states that licensees must disclose any ownership interest they have in a property involved in a real estate transaction in which they are participating. The Regulations intend to ensure that licensees protect the interests of the people they are supposed to be serving and not use their position for personal profit.

What continuing education is required, if any, for a residential salesperson licensed after December 1, 2007? a. No special requirement; any 14 hours will suffice b. One 7-hour course called a general module c. One 7-hour general module and one 7-hour residential module d. Three 7-hour modules, consisting of general, residential, and commercial

C. ONE 7-HOUR GENERAL MODULE AND ONE 7-HOUR RESIDENTIAL MODULE. All new salespersons licensed after December 1, 2007, must complete the mandated 7-hour general module and an additional 7 hours of either the residential module or the commercial module.

A real estate license is required to a. offer a mortgage loan. b. perform an appraisal. c. perform a comparative market analysis. d. advise buyers on the way to take title.

C. PERFORM A COMPARATIVE MARKET ANALYSIS. Sections 201 of the RELRA and 35.201 of the Regulations define those who, for another and for a fee, commission, or other valuable consideration, performs a comparative market analysis (CMA).

What is the purpose of the Real Estate Recovery Fund? a. Protect the public from dishonest salespeople b. Provide a source from which to collect unpaid commissions c. Provide a means by which an injured party can collect a judgment award d. Pool monies from broker's escrow accounts

C. PROVIDE A MEANS BY WHICH AN INJURED PARTY CAN COLLECT A JUDGMENT AWARD. The Real Estate Recovery Fund was established to provide a means for aggrieved persons to collect judgments awarded in civil court. These judgments must result from civil suits against real estate licensees for fraud, deceit, or misrepresentations in a real estate transaction.

Salespersons' licenses must be a. kept in a safe place by the salespersons. b. carried by the salespersons on their person. c. retained in the office of the employing broker. d. retained by salespersons at their residence.

C. RETAINED IN THE OFFICE OF THE EMPLOYING BROKER. The current license of the broker and all licensees employed by or affiliated with the broker must be maintained at the main office.

An 18-year-old woman has just received her salesperson real estate license. For how long must she be engaged as a real estate licensee before she can apply for a broker's license? a. One year of active licensure b. At least one year of active licensure; up to two years on inactive status c. Three years of active licensure d. Two years of active licensure within the past five years

C. THREE YEARS OF ACTIVE LICENSURE. A broker candidate must be at least 21 years of age and have been engaged as a licensed real estate salesperson for at least three years or have experience and/or education that the Commission considers equivalent.

A broker may pay a commission to a. a developer. b. a licensed salesperson who works for another broker. c. an attorney. d. a licensed salesperson employed by the broker.

D. A LICENSED SALESPERSON EMPLOYED BY THE BROKER. A licensed real estate broker is prohibited from paying a commission or any valuable consideration to anyone other than the individuals licensed with the broker or another broker.

When advertising a property for sale, the broker must include which of the following in the advertisement? a. Listing price b. Legal description of property c. Broker's address d. Broker's business name

D. BROKER'S BUSINESS NAME. The Commission's Rules and Regulations require the broker's business name to be included exactly as it appears on the license. Blind ads are expressly prohibited.

The purpose of the license law is to a. prevent convicted criminals from engaging in the real estate business. b. generate license and renewal fees for the state treasury. c. authorize the Pennsylvania Real Estate Commission to promulgate Rules and Regulations. d. ensure that the public interest is protected.

D. ENUSRE THAT THE PUBLIC INTEREST IN PROTECTED. The purpose of laws, including licensing laws, is to provide for the good, safety, and welfare of the public. The rationale supporting the validity of the law is the government's responsibility to ensure that the public interest is protected.

Who must hold a real estate license in Pennsylvania? a. Employees of public utilities who are acting on behalf of their employing entity b. An attorney-in-fact acting under a property executed power of attorney c. Builders of single- or multifamily dwellings d. Full-time employee of a builder who negotiates the sale of the real estate of the builder-owner

D. FULL-TIME EMPLOYEE OF A BUILDER WHO NEGOTIATES THE SALE OF THE REAL ESTATE OF THE BUILDER-OWNER. Although Pennsylvania does not require builders to be licensed in Pennsylvania, some individuals employed by builders of single- and/or multifamily dwellings must be licensed, including those who negotiate the sale, lease, or rental on behalf of the builder-owner.

Which of the following is NOT cause for disciplinary action against a licensee? a. Accepting a listing with the understanding that illegal discrimination will be exercised in the sale of the property b. Failure to provide the client with a copy of the listing contract at the time it is signed c. Placing a For Sale sign on a property without written permission of the owner d. Payment of a commission by a licensed broker to another licensed broker

D. PAYMENT OF A COMMISSION BY A LICENSED BROKER TO ANOTHER LICENSED BROKER. A broker is permitted to pay a commission to another licensed broker. Prohibitions in Section 604 of the Commission's Rules and Regulations include failing to provide a consumer with a copy of contracts at the time of execution, erecting For Sale or For Rent signs without written consent, and accepting listings with the understanding that illegal discrimination will be practiced.

A licensed salesperson may do which of the following? a. Leave the employment of one broker and become associated with another broker without reporting the change to the Commission b. Place an advertisement using only the salesperson's name and phone number c. Sell the salesperson's own property without telling a buyer that she is licensed d. Sell condominiums

D. SELL CONDOMINIUMS. A licensed salesperson is authorized to handle the sale of condominium interests on behalf of the employing broker.

Licensure is required for which activity? a. Owners selling their own properties b. Trustees selling trust properties c. Bank employees appraising property for the banking institution d. Selling campground memberships

D. SELLING CAMPGROUND MEMBERSHIPS Campground membership sales require licensing as a campground membership salesperson. Section 304 of the RELRA provides exclusions to the law.

Which of the following is TRUE regarding the laws for escrow accounts? a. Rents the broker collects must be deposited into the broker's escrow account. b. The salesperson must deposit escrow funds as soon as they are received. c. Escrow funds must be deposited in an interest-bearing account. d. The buyer and the seller can agree in writing that the escrow money will not be deposited until the agreement of sale is accepted.

D. THE BUYER AND THE SELLER CAN AGREE IN WRITING THAT THE ESCROW MONEY WILL NOT BE DEPOSITED UNTIL THE AGREEMENT OF SALE IS ACCEPTED. The Commission's Rules and Regulations provide that a broker negotiating an agreement of sale may, with the written consent of both the buyer and seller, refrain from depositing earnest money into the escrow account until the agreement is signed by both parties.

Which of the following is TRUE regarding the Real Estate Recovery Fund? a. The maximum amount that may be paid to the aggrieved person is $30,000. b. The licensee's license is automatically revoked. c. The aggrieved person may sue the licensee for further damages if the amount paid is insufficient. d. The licensee's license is suspended until the full amount recovered out of the fund, plus interest, is repaid.

D. THE LICENSEE'S LICENSE IS SUSPENDED UNTIL THE FULL AMOUNT RECOVERED OUT OF THE FUND, PLUS INTEREST, IS REPAID. Chapter 8 of the RELRA addresses the Real Estate Recovery Fund, including the fact that a license is suspended until the amount paid from the fund is restored in full plus interest at the rate of 10 percent per year.

All of the following must take a license examination EXCEPT a. brokers. b. salespersons. c. builder-owner salespersons. d. time-share salespersons.

D. TIME-SHARE SALESPERSONS. The RELRA requires candidates for broker, salesperson, and builder-owner salesperson licenses to pass written exams to qualify for licensure. Time-share salespersons do not have an examination requirement.

A salesperson receives an earnest money check from the buyer along with the buyer's offer. The buyer's check must be a. deposited into the broker's trust account by the end of the next business day. b. deposited into the salesperson's trust account. c. held until the offer is accepted or not. d. turned over to the broker.

D. TURNED OVER TO THE BROKER. A salesperson or associate broker who receives deposits or any escrow moneys must immediately turn the funds over to the employing broker. If the offer is not accepted, then the broker (salesperson or associate broker) can return the uncashed check to the buyer or the lessee. Otherwise, it must be deposited into the broker's trust account by the end of the next business day.

The Real Estate Commission may take disciplinary action against a licensee for all of the following EXCEPT a. violating the Real Estate Licensing and Registration Act. b. violating the Rules and Regulations. c. violating the Pennsylvania Human Relations Act. d. violating blue-sky laws.

D. VIOLATING BLUE-SKY LAWS. Violation of the blue sky laws would result in prosecution by federal and state authorities, but not the State Real Estate Commission (SREC). The SREC has jurisdiction over violations of the RELRA and its Rules and Regulations, which includes Section 604 (22) of the rules for violations of the Pennsylvania Human Relations Act.