Professional Ethics

constructive fraud

a negligent misrepresentation or concealment of a material fact; when a person carelessly fails to disclose material information, or makes statements that he or she should realize are false or misleading

Ethics

the fundamental principles of honesty and integrity that guide a person's behavior

spam

the use of any electronic messaging system to send unsolicited bulk messages indiscriminately

The national do not call registry regulations require companies to synchronize their customer lists every A. 31 days B. 45 days C. 3 months D. 6 months

A

A licensee who tells homeowners that property values are declining because the ethnic or racial makeup of the neighborhood is changing could be found guilty of A. blockbusting B. price fixing C. steering D. stigmatizing

A

Hank and Jeanine run brokerages on opposite sides of town. They decide they can save a lot of money on gas if they concentrate on their side of town only. Hang agrees to send customers interested in north side properties to Jeanine if she will send him any customers interested in south side properties. This is an example of A. territory allocation B. blockbusting C. price fixing D. redlining

A

Licensee Dave knew that his listed property had a leaky roof, but in his eagerness to close the deal, he decided not to tell the buyer. They might be considered an example of A. actual fraud B. constructive fraud C. opinion D. puffing

A

Established Business Relationship (EBR)

A relationship that may allow a telemarketer or seller to call a consumer for up to 18 months after the consumer's last purchase, delivery, or payment (Even if the consumer's number is on the national do not call registry)

Someone forms a scheme with another with the intention of defrauding a third party. This is known as A. collusion B. commingling C. condealment D. conversion

A. collusion can be described as a secret agreement or cooperation among people, especially for deceitful or fraudulent purposes

ABC real estate company bought an e mail list from a vendor and sent out 5,000 e mails soliciting business. To comply with provisions of the can spam act, abc must process any opt out request it receives for at lease ______ after the emails are sent. A. 10 business days B. 30 days C. 45 days D. 60 days

B

Antitrust laws are in place to ensure that A. all monies in financial transactions are accounted for B. competition in the marketplace is fair and unrestrained C. licensees have a minimum level of education and training to protect the public D. no one is discriminated against because of race, sex, or national origin

B

Which federal lawsuit affirmed that the real estate business, which offers the sale of services, as opposed to the sale goods or products, is not excluded from charges of restraint of trade? A. u.s. v. Long Island board of realtors , Inc B. U.S. v. national association of real estate boards C. U.S. v. prince george's county board of realtors , inc

B

At a local convention of real estate licensees, broker Quinn mentioned that he was going to have to raise his commission rates or close his office. Quinn could be found guilty of A. allocation B. price fixing C. securities violations D. nothing, he did not violate any rules or laws

B.

The national do not call registry regulations require companies to update their national customer lists every A. 45 days B. 60 days C. 3 months D. 6 months

C

Which was the first federal law to prohibit business practices considered to be harmful to consumers? A. Clayton antitrust act B. federal trade commission act C. sherman antitrust act D. Unflair or deceptive acts or practices law

C

You can contact a former client for up to ______ after a transaction closes even if that client is on the National Do Not Call Registry. A. 9 months B. 12 months C. 18 months D. 24 months

C

any solicitation done via e mail must include instructions for A. contacting the federal trade commission with complaints about the licensee B. filing a complaint for a fair housing violation C. opting out of receiving future e mails D. steps necessary to collect damages for spam

C

Which federal law requires companies to take measures to secure and dispose of sensitive personal information of consumers? A. CAN SPAM B. do not call act C. fair and accurate credit transaction act D. gramm leach bliley act

C. the federal fair and accurate credit transaction act includes provisions to protect the identity an personal info of consumers by requiring companies that handle such data to have policies to secure and destroy it

Who manages the National Do not call registry? A. department of housing and urban development B. federal housing agency C. federal reserve board D. federal trade commission

D

of these, which is LEAST LIKELY to be considered an example of puffing? A. best view in the city B. exquisite decor that will make your friends jealous C. feel like royalty in this palatial beauty D. priced to sell; likely to go quickly in this popular neighborhood

D

Which is NOT one of the Sections in the REALTORS code of ethics? A. duties to clients and consumers B. duties to other Realtors C. duties to the public D. duties to real estate licensees

D. the code of ethics does not address duties to real estate licensees in general, though it does address duties to other REALTORS

Employing broker Ben accepted a commission check at closing. Affiliated licensee Lori was supposed to get half of that check for finding a buyer for the house. Instead, Ben deposited the check into his personal account and used it to pay off his late visa bill. This is an example of A. collusion B. commingling C. concealment D. conversion

D. when a licensee uses or makes available to his or her personal or business use funds or other property belonging to another, it is known as conversion

consent decree

a binding agreement reached before judgment in a court case by which the accused party consents to change its behavior without admitting wrongdoing

Boycott

a concerted refusal by two or more people to deal with a particular person or company

opt out

a consumer's right to terminate future electronic communication from business and commercial entities

nonpublic personal information

a consumers personal financial info that would not be easily obtainable by the general public, such as credit reports, bank accounts, and transactions

Injunctive Relief

a court ordered prohibition against an act, as opposed to a judgment for money

Bait and Switch

a deceptive sales technique that involves advertising a particular product, service, or rate to attract consumers, then persuading them to accept something less favorable or desired

collusion

a secret agreement or cooperation among people, especially for deceitful or fraudulent purposes

code of ethics

a set of principles and standards based on core values by which a group of professionals are expected to conduct themselves

market allocation

a situation where competitors agree to not compete with each other in specific markets by dividing up geographic areas, types of products, or types of customers. also called territory allocation

monopoly

a situation where only one or very few companies dominate the market share of a particular product or service

material fact

a truth that would change the individuals actions if it were known; in real estate, this usually refers specifically to things wrong with the property itself

cease and desist order

administrative agency directive to stop an offending activity

tie in agreement

an agreement in which one transaction or agreement is contingent on a second transaction or agreement. also called tying agreement

Antitrust

an area of law concerned with maintaining competition in private markets by prohibiting any restraint on trade

Actual fraud

an intentional misrepresentation or concealment of a material fact

price fixing

antitrust violation that occurs when two or more competitors agree to fix the prices they will charge. In real estate it might occur when brokers agree with other brokers on commission rates; even the implication that brokers have discussed and or reached an agreement on fees could be illegal

blind advertisement

any real estate advertisement that is used by a licensee regarding the sale or lease of real estate or of licensed activities that does not include the broker's name or business name. Prohibited in most states

What are some examples of fraud

concealment, collusion, commingling, culpable negligence, conversion, failure to account, filing false documents, false or misleading advertising

Negligence

conduct that falls below the standard of care that a reasonable person would exercise under the circumstances; an unintentional breach of a legal duty resulting rom carelessness, recklessness, or incompetence.

a group boycott is illegal only if its intention is to drive a competitor out of business. true or false

false. a boycott intended to compel a firm to abandon its current marketing strategies, for example is also illegal

slander

defamation of another's character or reputation through that which is spoken or heard

The National Do not call Registry regulations require companies to update their Do Not Call list ever three months. true or false

false. a company must maintain national and internal lists of customers and prospects who do not want to be called and must synchronize its lists with an updated version of the registry at least every 31 days

Individuals may NOT file a lawsuit for antitrust violations against a business; only administrative agencies or the government may do that. true or false

false. anyone whose business or property has been injured by anyone violating these antitrust laws may file a private civil lawsuit in state or federal court

Ted and Vicky are brokers at Farmland Realty. Ted takes all of Farmlands listings on the Westside, While Vicky takes all of Farmland's listings on the Eastside. They could be guilty of market allocation. true or false

false. if two or more licensees work for the same brokerage, it is fine to divide an area into territories

If a local real estate board publishes a suggested commission schedule but does not mandate that members follow it, it would NOT be considered an antitrust violation. true or false

false. price fixing is per se an unreasonable restraint of trade and therefore illegal under the sherman antitrust act

The Sherman Antitrust Act was enacted to enhance the regulations contained in the Clayton Antitrust Act. true or false

false. the clayton antitrust act was enacted to extend the antitrust regulations in the sherman antitrust act which was adopted first

The national do not call registry limits phone calls by political organizations and charities as well as commerce related businesses. true or false

false. the national do not call registry applies to commerce related phone calls, such as telemarketers and sellers who provide, offer to provide, or arrange to provide goods or services to consumers in exchange for payment

"CAN SPAM" is an acronym for "controlling access to non solicited phonecalls and mail" true or false

false. then controlling the assault of non solicited pornography and marketing act is more commonly known as "can spam"

The Federal Trade Commission ordered Best Deal Real Estate and We Sell Homes Fast Realty to destroy a commission tip sheet that they shared with their agents. This is an example of injunctive relief. true or false

false. this penalty was imposed by an administrative agency, the FTC, not the courts. Therefore, this is a cease and desist order, not injunctive relief.

Kelly and Ryan are licensees for Andy's Realty. One day over lunch with their employing broker, they agree that Mike's Discount Real Estate is really hurting their commission earnings, so they decide not to show his listings to their buyer clients. Are they guilty of group boycotting? yes or no

no.

Do antitrust laws prevent you from discussing the commission you intend to offer a cooperating broker? yes or no

no. antitrust laws are in place to prevent practices between competitors that could result in restraint of trade, but telling a cooperating broker what you're willing to offer them is not a restraint of trade

Hank and Russ are both sales agents for Northwoods Realty. At a company meeting, broker Bob told them not to accept any listing for less than 7%. Do you think this is an example of price fixing? yes or no

no. price fixing is per se an unreasonable restraint of trade, but this conversation took place among agents of the same brokerage, not competing brokerage, so it is not price fixing

Do you think that a so called discount broker is violating antitrust laws if he advertises his commission rate? yes or no

no. simply advertising the rate to the consumer is not a violation. since he's not consulting with any competing broker to set a commission rate there is no restraint of trade.

Louis and Louise are both licensees for LaLaLand Realty. At a company meeting, the employing broker tells them not to accept any listing for less than 7%. Do you think this is an example of price fixing? yes or no

no. this conversation took place among agents of the same brokerage, not competing brokerages, so it is not price fixing

culpable negligence

occurs if a licensee operates in a reckless, careless, and excessively negligent manner. Culpable negligence is negligence for which one can be held legally accountable

concealment

occurs when a licensee fails to disclose information that is material to a decision to a party to whom the licensee has such a duty

commingling

occurs when a licensee mixes client funds with brokerage funds

illegal per se

something that is unlawful in and of itself without considering context or intent; generally because of statute, constitution, or case law

puffing

superlative statements about the quality of a property that should not be considered fact

competency

the ability to do something successfully or efficiency

Consumer Connie completes an application for a mortgage loan. The application includes her income, assets, and debts. This would be considered nonpublic personal information. true or false

true

Licensee Ben has contacted former client Lisa, who is on the company's internal Do Not Call List, to see if she's interested in selling her house. Lisa files a complaint against Ben. Ben's employing broker may also be liable. true or false

true

Under CAN SPAM, every electronic solicitation must include some clear option to opt out of future communications. true or false

true

A licensee who drafts an addendum to a complicated sales contract could be accused of the unauthorized practice of law. true or false

true.

you're on a listing appointment and the seller asks you '' what's the going rate for commission?'' you answer " The going rate is around 7%". You could be guilty of price fixing. true or false

true.

conversion

when a licensee uses or makes available to his or her personal or business use funds or other property belonging to another

Roger and his wife buy a new condo through Resort Realty. When they sign the papers at closing, they see a clause in the contract indicating that if they ever decide to sell their condo, they must re list with Resort Realty. Is this also an example of an illegal tie in? yes or no

yes