Rplu Real Estate Ch 5

Front 1

Common-law duties to the general public

Back 1

Honesty and fairness
Disclosure
Reasonable skill and care
Accounting

Front 2

Customer level duties to public- honesty and fairness:

Back 2

Give client accurate info, honesty and fairness
Don't discourage a transaction by lying

Front 3

Customer level duties to public-disclosure

Back 3

All material facts related to the property that is subject of the transaction. Any adverse property conditions

Front 4

Customer level duties to public-reasonable care and skill

Back 4

Rigorous training and licensure procedures. When awarded a license they are considered to have a level of skill and expertise.

Front 5

Customer level duties to public-accounting

Back 5

Must account for all funds or transactions of value received from the parties to the transaction. Fun such as earnest money or cash advances must be kept separate from the agent or broker's personal money and detailed records must be prepared for each transaction

Front 6

When agency relationship exists real estate agents and brokers are considered _______of their principals. As such, they owe this client level duty to their principles

Back 6

Fiduciary

Front 7

Agents and brokers who are acting in any agency capacity of the following fiduciary duties to their principles

Back 7

Loyalty obedience confidentiality disclosure reasonable skill and care accounting

Front 8

In agency capacity fiduciary duties to principle – loyalty

Back 8

Requires they act solely in the best interest of principal at all times. Work to obtain best price and terms to satisfy needs investigate and present all offers and obtain relevant information about buyer or seller. Avoid any conflict of interest that would compromise loyalty.
Realtor purchases property then immediately sells for profit

Front 9

In agency capacity fiduciary duties to principle- obedience

Back 9

Promptly and efficiently obey all of principles lawful instructions but does not include obligation to obey unlawful instructions such as not marketing a property to minorities or misrepresentation of condition

Front 10

In agency capacity fiduciary duties to principle-confidentiality

Back 10

Keep all info confidential unless otherwise required by law. Safeguard principles lawful confidences and secrets. Agent that represents seller should not disclosed to buyer that the seller is willing to sell below list price. Duty of confidentiality does not include obligation to withhold known material facts about condition of property or misrepresent

Front 11

In agency capacity fiduciary duties to principle- reasonable skill and care

Back 11

They must act as a competent real estate professional would act in a similar situation

Front 12

In agency capacity fiduciary duties to principal- accounting

Back 12

Agent is entrusted with principles monies and properties need to document all paid or received during a transaction. Including earnest money's which is the money paid by the buyer to the seller to secure the transaction and which is forfeited if buyer defaults. Money must be kept in separate escrow account

Front 13

Statutory or federal laws – interstate land sales full disclosure act ILSA late 1960s

Back 13

Main problem buying properties in other states is when travel to see the property it does not match the representation during the sale. Requires registration of any sale or lease of lots in subdivisions condominiums or houses with the department of housing and urban development HUD if the transaction includes the use of interstate commerce or mail

Front 14

Sherman and clayton

Back 14

Sherman- Federal law that prohibits any activity that may result in restraint of trade. Including monopolizing a particular trade
Clayton- regulates business practices that may be detrimental to fair competition some general practice is regulated include price-fixing mergers and acquisitions

Front 15

Federal laws

Back 15

-Interstate land sales full disclosure act ILSA
-antitrust laws – Sherman and Clayton act
-fair housing act- title vii civil rights act of 1964
-American with disabilities act
- Megan's law
-truth in lending act regulation z
- real estate settlement procedures act respa
- federal lead based paint hazard reduction act
- comprehensive environmental response compensation and liability act

Front 16

Aims to promote informed use of consumer credit by requiring disclosures about loan terms and conditions
Also establishes disclosure standards for advertisements that refer to certain credit terms

Back 16

Truth in lending act – regulation Z TILA

Front 17

Consumer protection statute first passed in 1974. Purpose is to regulate real estate settlement services and eliminates kickbacks and referral fees that increased cost of certain settlement services. It requires agents and brokers to disclose fees and procedures and real estate settlement

Back 17

Real estate settlement procedures act

Front 18

Requires disclosure of know info on lead based paint and hazards before sale or rental of house built before 1978

Back 18

Federal residential lead based paint hazard reduction act

Front 19

Superfund act 1980
Imposes liability on property owners and other parties involved for the full cost of cleanup of environmentally contaminated land if discovered before escrow

Back 19

Cercla

Front 20

Consumer protection laws Protect the public from unfair and deceptive practices of business entities and professionals. Laws provide consumers with additional protection and remedies from possible fraudulent and deceptive business practices one prohibits certain acts and practices that tend to mislead and deceive customers

Back 20

Deceptive trade practices act 1972

Front 21

Since 1960s the idea of let the buyers beware has changed to

Back 21

Let the sellers tell all

Front 22

Two types of civil laws contract and tort tort liability arises from

Back 22

Go Jen or intentional infliction of damage upon a person or property example if an employee negligently operates a company vehicle and injure someone he may face tort liability. The company's product is going to be defective and consumer claims to be injured as a result of using it the manufacturing company may face tort
If real estate agent or broker fails to meet applicable standard of care and party sustains damage there may be valid claim for tort

Front 23

Potential liability under tort – two forms of misrepresentation –

Back 23

Fraudulent – statement made by agent broker knowing the statement is false Pete example telling buyers of the property had a clean title when this was not the fact
Negligent misrepresentation – occurs when Steven me by agent broker is incorrect on the honestly believe it's the truth but haven't reasonably verified
Failure to exercise reasonable care and confidence in obtaining communicating information