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10 Cards in this Set
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True/False - According to CP-11 on Compensation between an Employed and Employing Broker, in the event of a commission dispute the Colorado Real Estate Commission will schedule a hearing and render a judgement. True False |
A: False The Real Estate Commission… “Has no legal authority to render a monetary judgment in a money dispute nor will it arbitrate such a matter”A dispute over a commission between the employed and employing broker must be settled between the parties or by a civil action in a court. |
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According to CP-22 Handling of Confidential Information, the sharing of confidential information is prohibited according to the rules set forth by ? Confidential Brokerage Secret Brokerage Designated Brokerage Seller Agency |
A: Designated Brokerage
CP-22 Commission Position Statement on Handling of Confidential Information in Real Estate BrokeragePrior to designated brokerage, it was common for brokers to share the motivations of a buyer or seller during office sales meetings, for example. Under designated brokerage, the law specifically prohibits sharing of such information.Confidential information, and the broker responsibility thereto, are defined in C.R.S. 12-61-804 (2), 12-61-805 (2), 12-61-807 (3), and Rules E-32 and E-39. Confidential information can include, but is not limited to, motivation of the parties. |
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True/False - According to Commission Position 1 on Homebuilders - Corporations that build structures on land they own may sell the land and building together without licensing True False |
A: True CP-1 Commission Policy on Homebuilder’s Exemption from LicensingCorporations that build structures on land they own may sell the land and building together without licensing, provided that the sales are made by corporate officers or regularly salaried employees. The land and building must be sold as a unit and the building must not have been previously occupied. This exemption is usually referred to as the homebuilder’s exemption. |
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According to CP-25 on Recording Contracts, should a listing broker decide her Seller client is attempting to cheat her out of a commission, the broker can: File a mechanics lien to ensure the brokers'' claim for the commission is honored Record the listing contract so that it would appear in any Title Commitment for the property File a lis pendens to warn any potential buyer that a legal action is pending Commence mediation, arbitration or a civil action |
A: Commence mediation, arbitration or a civil action CP-25 Commission Position on Recording ContractsOver the years the Commission has received many inquiries and complaints concerning the recording of listing contracts to protect claims for commissions. In addition, some licensees have attempted more “creative” ways of holding up a closing, such as filing mechanics liens or notices of lis pendens, as well as recording demand letters or purchase contracts. The end result is usually a cloud on the title and sometimes a slander of title action.Some states have passed statutes authorizing the filing of such liens. Colorado has not. Filings and recordings such as these are inappropriate and will result in Commission action.Here is a typical scenario: Broker lists a property at $125,000 for 120 days and actively markets it. No offers come in during the first 30 days. Broker advises her seller to lower the price by $5,000 to encourage some activity. The seller is adamant that the property is worth the list price and refuses. After another 15 days with no offers, the seller reluctantly lowers the price. He also tells the broker that he doesn’t feel she is trying hard enough to sell the property and he’s going to take it off the market if nothing happens.A week later an offer for $100,000 comes in from another company, which is presented and rejected. The seller is quite upset at the low offer and demands to be released from the listing. There is no further communication between the parties, but the listing is never formally terminated. Three weeks later the broker learns that the seller has entered into a contract with the same buyer for $110,000 and closing is set. The broker is very upset and wants to protect her commission. What can she do? 1. File a mechanics lien?ANS: No. Real estate licensees are not a protected class of lien claimant under the statute except as provided in C.R.S. 38-22.5 (Commercial Real Estate Brokers Commission Security Act). 2. File a lis pendens (notice of pending lawsuit)?ANS: No. A lis pendens relates to a title or ownership dispute involving the land itself. The broker has no legal interest in the real estate. 3. Record the listing contract?ANS: No. This will usually have the effect of clouding title to the property, which in turn affects the closing between buyer and seller. The broker should not interfere in the process of transferring title to property. 4. Escrow the disputed commission?ANS: Maybe. This is a touchy area. If the broker makes demand on the seller for the commission prior to closing and states her possible rights (mediation; arbitration; civil action) the parties may agree to an escrow pending settlement of the dispute. However, there is no legal requirement that the closing entity escrow funds absent an agreement.5. Commence mediation, arbitration or civil action (as appropriate).ANS: Yes. Nothing prevents a licensee from asserting any legal claim against a principal.A commission dispute is an emotional issue. Sometimes a licensee has put in considerable time on a listing only to be faced with a seller who refuses to pay, attempts to renegotiate or is outright deceitful. On the other side, the Commission has witnessed instances in which the licensee had no legitimate right to a commission and was using superior knowledge and scare tactics to force payment. Clearly this is a time to consult a good real estate attorney and avoid the risk of a complaint based on a hasty decision. |
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True/False - According to CP-20 on Personal Assistants, an unlicensed personal assistant may show homes, True False |
A: True CP-20... An unlicensed assistant may complete the following tasks:1. Complete forms prepared for, and as directed by a broker. Unlicensed assistants cannot independently draft legal documents such as listing or sales contracts, and they cannot offer opinions, advice or interpretations of these documents.2. Distribute preprinted, objective information prepared by the broker about a property listed for sale.3. Perform clerical duties, including gathering information for a listing.4. If authorized by the seller, provide access to property, conduct showings or open houses.5. Deliver paperwork to other brokers, buyers or sellers.6. Deliver paperwork that requires signatures in regard to financing documents that are prepared by lending institutions.7. Prepare market analyses on behalf of the broker, if the analyses are approved and submitted by the broker to the client with a disclosure that the market analyses were prepared by the unlicensed assistant. The broker must ensure that market analyses comply with Commission Rule E-42.8. Collect and receipt for earnest money deposits, security deposits or rents.9. Schedule property repairs on behalf of the broker, if there is an existing agreement that authorizes the broker to make repairs to the property. |
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Brian purchased a second home three years ago for $ 169,000. He sold it this year for $154,000. He decided to go ahead and sell it for a loss because his work schedule prevented him from enjoying the second property. His tax return will: reflect a loss of $15,000 not show any loss, as you cannot write off a loss on your personal residence not show a loss this year, but Brian may carry this loss over into a year when he shows a gain on the sale of a principle residence and write it off then not show a loss this year, but Brian may carry this loss over into a year when he shows a gain on the sale of a principle residence and write it off then if that happens within the next three years |
A: not show any loss, as you cannot write off a loss on your personal residence The IRS only plays with the owner of a personal residence if the house is sold at a profit; if there is a loss the IRS does not want to be your partner on your residence. |
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True/False - According to CP-14 Sale of Modular Homes,a licensee who sells land and a modular home to be affixed to the land, to the purchaser in concurrent or an arranged or pre-arranged or packaged transaction, is subject to the laws and rules of the Commission. True False |
A: True CP-11 The Commission is aware that many services rendered by licensees may or may not, in themselves, require licensing. Such services as collection of rents on real property, subdivision development services other than sales, or the general management of real property not involving renting or leasing may all be performed independently by an unlicensed person. When performed by a licensee, these services are all so integrated with real estate brokerage that all money received in connection therewith must be held or disbursed according to the law and rules of the Real Estate Commission.Therefore, it is the position of the Commission that a licensee who sells land and a modular home to be affixed to the land, to the purchaser in concurrent or an arranged or pre-arranged or packaged transaction, is subject to the laws and rules of the Commission. Consequently, all money received concerning the integrated transaction, including the modular home, should be processed through the broker or the employing broker pursuant to 12-61-117, C.R.S. and 12-61-113(l)(f), C.R.S. and Commission Rules E-l and E-5.It is also the position of the Commission that if a licensee sells to an owner of land, a modular home to be affixed to the land, and there has been no brokerage relationship between the owners of the land and the licensee, such licensee in such a sale will not be required to comply with the requirements of 12-61-117, C.R.S. or 12-61-113(l)(f), C.R.S. or Commission Rules E-l and E-5. |
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True/False - According to CP-40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms “realty”, “real estate”, “company”, “corporation”, “corp.”, “inc.”, “LLC” or other similar language that would indicate a company other than the employing brokerage firm. True False |
A: True CP-40 Commission Position on Teams (4-5-2011)The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision.Advertising and name usage:While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers’ licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms “realty”, “real estate”, “company”, “corporation”, “corp.”, “inc.”, “LLC” or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising.Supervision:In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties:1) Maintain all trust accounts and trust account records;2) Maintain all transaction records;3) Develop an office policy manual and periodically review office policies with all employees;4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32;5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31;6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur;7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons.Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker’s license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker’s license is paid solely by the employing broker. |
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True/False - The name of the Brokerage Firm with whom the team is associated does NOT have to appear on all team advertising as long as all licensed brokers on the team have their licenses registered under the Brokerage Firms name. True False |
A: False CP-40 Commission Position on Teams (4-5-2011)The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision.Advertising and name usage:While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers’ licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms “realty”, “real estate”, “company”, “corporation”, “corp.”, “inc.”, “LLC” or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising.Supervision:In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties:1) Maintain all trust accounts and trust account records;2) Maintain all transaction records;3) Develop an office policy manual and periodically review office policies with all employees;4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32;5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31;6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur;7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons.Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker’s license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker’s license is paid solely by the employing broker. |
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According to Commission Position 25 on Recording Contracts should a listing broker get into a dispute with a seller over a commission, the broker may pursue a civil action and file a lis pendens. True False |
A: False CP-24 ... File a lis pendens (notice of pending lawsuit)? ANS: No. A lis pendens relates to a title or ownership dispute involving the land itself. The broker has no legal interest in the real estate. |
