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117 Cards in this Set
- Front
- Back
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What is the Complaint Process ? (5)
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-1) A complaint is filed - 2) Investigation of the complaint - 3) Probable Cause determination -4)Formal Complaint is issued if probable cause is found -5)Informal Hearing or formal hearing is conducted -6) Final order is issued -7) Judicial review (appeal) of the final order
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Filing a complaint with the DBPR (5)
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1) Complaint must be legally sufficient 2) DBPR may issue notice of noncompliance 3) FREC rule lists violations for which notice of non compliance may be issued |
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Investigation of the complaint (5)
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1) Must be in writing and legally sufficient 2) Anonymous / unsigned complaint is accepted is complaint is substantial 3) DBPR/DRE investigates (NOT FREC) 4) Summary (emergency) suspension issued by DBPR Secretary in serious cases to suspend licensee immediately |
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Probable Cause Panel (5)
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1) Composed of 2 current members or one current and one former member of the FREC 2) Closed to the public 3) Decision as to whether probable case exits made by majority vote of the panel by the DBPR 4) If NO probable cause , may dismiss case or dismiss with letter of guidance |
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Formal (Administrative) Complaint when probable cause is found (5)
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1) Outline of allegations of facts and charges against the licensee 2) Includes respondent's election of rights |
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Licensee-respondent and DRE reaching a possible settlement prior to hearing (5)
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1) STIPULATION : agreement as to the facts of the case and the penalty reached between attorneys and DRE 2) Terms of the stipulation are approved or denied by the FREC during a Commission meeting |
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Voluntary relinquishment for permanent revocation (5)
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1) Licensee chooses to avoid a disciplinary hearing 2) Voluntarily relinquishes license 3) Permanently puts the licensee out of the real estate business |
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Informal Hearing (5)
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1) Licensee signs election of rights & does NOT dispute allegations ...requests informal hearing 2) Held during Commission meeting 3) Probably cause members do not participate 4) Licensee MUST agree that there is no dispute of material fact |
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Waiver Hearing (5)
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Subject to complaint failed to timely respond to election of Rights, licensee waives election of rights
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Formal Hearing (5)
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1) Licensee signs election of rights disputing allegations, requests formal hearing 2) mandatory if licensee disputes allegations 3) Administrative Law judge (ALJ) hears testimony 4) ALJ as power to swear in witnesses, testimonies under oath, and issue subpoenas. 5) ALJ prepares and submits a recommended order to DBPR includes findings and conclusions |
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Final Order (5)
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1) probable cause members do no participate 2) Commission can accept, reject, modify conclusions of law in recommended order 3) effective 30 days after order 4) Licensee may operate during complaint process and during 30 day period |
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Appeal (judicial review) (5)
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1) Licensee may request appeals court to stop enforcement of penalty 2) WRIT OF SUPERSEDAS stops enforcement of penalty 3) Writ supersedes the action of FREC and allows licensee to practice real estate until the case is heard on appeal |
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When a Licensee may operate pending appeal (5)
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1) Licensee has filed appeal 2) An order of stay is requested 3) Request for stay is granted (writ of supersedes) |
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The types of penalties for violation of law (5)
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Administrative, Civil, and Criminal
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Administrative penalties (5)
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1) Denial of license application 2) Letter of reprimand 3) Notice of non compliance 4) Citation issued 5) Administrative fine of up to $5,000 6) Suspension up to 10 days 7) Revocation with prejudice 8) Probabtion |
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Civil Penalties (5)
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Enforced by courts when unlicensed practices and fruad
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Criminal Violations (5)
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1) FREC must report action to Division of Fl Condos, Timeshares, and Mobile homes 2) FREC cannot incarcerate 3) FREC does not have authority to order restitution 4) Criminal violations go to the state attorney |
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Unlicensed Real Estate practice (5)
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1) Criminal penalty- Fine up to $5,000 and 5 years in prison 2) DBPR orders a cease and desist order |
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First degree Misdemeanors (5)
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1) Criminal penalty - Fine up to $1,000 and 1 year in prison Ex,) Failing to provide accurate and current rental information for a fee |
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Second Degree misdemeanor (5)
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1) All other violations Ch. 475 2) $500 fine and/or 60 days in jail |
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Real Estate Recovery Fund (5)
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1) Reimburses individuals/businesses judged to have suffered monetary damages as result to licensee law violations 2) Licensee must have active license at time 3) Injured party must file civil suit, final judgement, and attempt to collect on judgement 4) Claims must be made within 2 years 5) Claims limited to $50,000 per transaction 6) Claims against one license may not exceed $150,000 7) Fees collected when fund drops below $500,000; collection stops when funds exceed $1 million 8) License automatically suspended until funds are reimbursed WITH INTEREST 9) A broker complying with EDO and is sued may be reimbursed without penalty |
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NOT eligible for Recovery Fund (5)
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1) Spouse of offending licensee 2) Licensee who acted as a single agent or transaction broker may not claim unpaid commission 3) Anyone who bases the claim on a real estate agent owned the property being sold 4) Anyone who makes a claim against a licensee with an inactive license 5) Judgment was issued against a business entity and not an individual |
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Important Time Periods for Chapter 5 (5)
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15 days : to correct a minor infraction of noncompliance 30 days : when a final order becomes effective, to file an appeal, to accept or file written objections to a citation 10 years : Maximum period of suspension |
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Real estate professionals experts in : (11)
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1) Knowledge of property transfer 2) Market conditions 3) How to market real estate or businesses |
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Real estate brokerage (11)
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Act of bringing together buyers and sellers, owners and renters, & completing real estate transactions
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Sales and Leasing (11)
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1) Real estate license activities performed under authority of the broker 2) Broker is an intermediary between two or more people in a negotiation 3) Sales associate works for the broker |
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Five Sales Specialties (11)
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Residential, Commercial, Industrial, Agricultural, Businesses (business brokers)
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Target Marketing (11)
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1) Expertise in locating prospects 2) Database of leads to send target advertising 3) Farm area 4) Follow up |
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Property Management (11)
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1) Involves leasing, managing, maintaining, and marketing of real estate owned by others 2) Absentee owner - (out of state owner) 3) Primarily protects the owner's investment 4) Rental agents collect fee for tenant referrals 5) Property managers manage property after tenant is secured 6) Compensation and licensure required 7) CAM when HOA of more than 10 units or annual budget exceeds $100,000 |
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Appraisal (11)
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1) based on established valuations and professional judgement 2) Appraisal reports involving a federally related transaction MUST BE CERTIFIED 3) Paid a set fee, follows USPAP |
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Valuation & Real estate licensees (11)
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1) Licensee can do appraisals except when procuring a listing and federally related transactions 2) MUST abide by USPAP |
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Comparative Markey analysis and Broker's Price Opinion (11)
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1) CMA is NOT an appraisal 2) Sales associate may perform BPO only under employing broker 3) If sales associate performs a BPO the compensation must be paid directly to the broker 4) USPAP does not apply to BPOs |
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Financing (11)
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1) Done by a licensed mortgage loan originator 2) Real estate licensee may not accept referral fees from lenders unless licensed as a mortgage loan originator |
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Development and Construction Three Phases(11)
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Land Acquisition , Subdividing and development, recording the subdivision plat map
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Subdivision Plat Map (11)
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1) required to protect consumers 2) engineer's plan for land use 3) plat maps indicate size and location of individual lots, streets and public utilities 4) dedication to local municipality |
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Three types of residential Construction (11)
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1) SPEC HOMES : construction without presale 2) CUSTOM HOMES : Building according to owner's plans 3) TRACT HOMES : Model homes used to promote construction of new homes on lots in subdivision |
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Role of Government (11)
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LOCAL : property tax, regulatory activities ; licensing, building permits, zoning STATE : state documentary tax, intangible tax FEDERAL : fiscal and monetary policies |
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National Association of REALTORS (NAR) (11)
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1) Must subscribe to Code of Ethics 2) REALTOR can only be used by member 3) MLS |
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Purpose of a legal description (12)
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1) Describes a parcel in sufficient detail 2) Based on a survey 3) Licensee's role and responsibilities |
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Methods of legal description (12)
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1) metes and bounds 2) Government Survey 3) Lot and Block |
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Description by metes- and- bounds (12)
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1) Oldest method 2) Metes = meters & bounds = direction 3) Starting reference point (POB) [monument] 4) First direction North or South (0 degrees), Second direction East or West (90 degrees) 5) Maximum can move 90 degrees |
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Description of Government Survey (12)
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1) Grid system in all states except the original 13 colonies 2) Based on N-S lines and E-W lines |
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Principal Meridian and base line (12)
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1) Principal meridian is North-south runs through monument Tallahassee 2) Base line is an East-West line |
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Range (12)
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North-South lines every 6 miles from Principal Meridian
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Tier or Townships (12)
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1)Township lines are East-West lines 6 miles parallel to the base line 2) Range and Tiers intersect to form 6 mile squares = townships |
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Townships (12)
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1) 6 mile square 2) 36 square acres 3) 36 sections 4) S shape numbering sections |
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Sections (12)
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1) 1 mile square 2) contains 640 acres 3) one acre = 43,560 square feet |
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Measures and Terms (12)
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1) Check : 24 miles on each side, contains 16 townships, 2) Township : 6 miles on each side, 36 square miles 3) Tier : east-west strip of land North & South of a baseline 4) Quarter Section : 160 acres, land originally granted to homestead 5) Section : 1 square mile , 640 acres |
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Description by lot and block numbers (12)
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Platted subdivision is divided into blocks , each parcel within a block is a lot
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Tax Maps (12)
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Parcel ID # used to prepare tax maps
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Types of real Estate Investments (16)
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Residential, Commercial, Industrial, agricultural, Business Opportunities
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Advantages of Real estate as an investment (16)
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1) Usually above-average rate of return 2) Tax advantages 3) Hedge against inflation 4) Leverage of borrowed money 5) Equity Buildup |
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Disadvantages of investing in real estate (16)
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1) lack of liquidity 2) more localized market 3) expenses associated with expertise 4) Need for active management 5) relatively high degree of risk |
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Risk associated with general business conditions (16)
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Business risk (operating business risk) : degree of variance between projected and actual income and expenses Financial risk : ability of a property to pay operating expenses from operations, borrowing, and equity Purchasing-power risk : related to inflation Interest-Rate Risk : risk of rising interest rates |
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Risk that affect return (16)
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Liquidity Risk : possible loss that may be incurred if investment has to be converted to cash quickly Safety Risk : market risk and risk of default |
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Leverage (16)
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Use of borrowed funds to finance the purchase of an asset 1) Positive leverage : benefits exceed the cost of borrowing 2) negative leverage : borrowed funds cost more than they are producing |
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Similarities of business brokerage and real estate brokerage (16)
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1) Sale of real property or assignment of lease is integral part of business brokerage transactions 2) Real estate license is required to deal in business brokerage |
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Differences between business brokerage and real estate brokerage (16)
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1) Assets include personal property and good will 2) Value of real estate and value of going concern may be different 3) wider geographic market for business brokerage |
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Expertise in Business Brokerage (16)
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Corporate Finance, Business accounting, Valuation of businesses
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Corporate finance (16)
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Knowledge of : Classes and characteristics of stocks, securities analyses and valuation , management of working capital, budgeting |
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Business accounting (16)
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Income statement analysis, balance sheet analysis, asset depreciation, taxation
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Valuation of businesses (16)
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Comparable sales analysis, cost approach, income analysis, liquidation analysis
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Steps in the sale of a business (16)
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1) listing 2)identify all assets of the business 3) Valuation of business 4) deduct liabilities 5) legal compliance with all pertinent laws 6) market the business 7) secure a buyer 8) enter into a contract with both parties 9) due diligence period 10) closing preparation 11) date of closing the transaction |
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MATH : Calculate before-tax cash flow (16)
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Net Operating expense - Annual debt service = before - tax cash flow
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MATH : Calculate after - tax cash flow (16)
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Before-tax cash flow - Income taxes = after tax cash flow
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MATH : Calculate cash break even ratio (16)
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Operating expenses - reserves + annual debt service / Potential gross income = cash break even ratio
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MATH : Calculate debt service coverage ratio (16)
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Net operating income / annual debt service = debt service coverage ratio
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MATH : Calculate equity dividend rate (EDR) (16)
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Before-tax cash flow / equity (down payment) = EDR
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MATH : CALCULATE OPERATING EXPENSE (16)
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Operating expenses / effective gross income (EGI) = operating expense ratio
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Equitable Title (8)
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Interest in real property a buyer receives upon executing a contract prior to title closing ** Legal title is acquired at a future date**
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Alienation (8)
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The act of transferring ownership , title, or an interest in real property from one person to another 1) Voluntary : owner's control and consent 2) Involuntary by operation of law |
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Types of voluntary alienation (8)
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Deed / Will (testate)
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Types of involuntary alienation (8)
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Descent (intestate), escheat to the state, adverse possession, eminent domain
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Alienation by adverse possession (8)
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HOT CAN H - Hostile possession O - Open Possession T - Taxes paid C- Claim of title A - Adverse possession ( 7 years or more) N - Notorious public possession |
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Two types of notice to legal title (8)
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Actual notice : direct knowledge acquired in the course of transaction Constructive notice : recording a document in the public records |
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Lis Pendens (8)
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Recorded legal document giving constructive notice of pending legal action that involves real estate
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Title insurance protects the policy holder from title defects (8)
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1) Licensees not qualified to opinion of title 2) Licensees must advise buyer to attorney or title insurance company to determine the condition of seller's title 3) municipal lien searches provide added protection to unrecorded liens |
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Owner Policy (8)
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1) Issued for purchase price 2) claim will pay up to the purchase price 3) Benefits owners and heirs 4) Not transferable 5) Seller typically pays this closing expense 6) One-time premium |
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Lender (Mortgagee) policy (8)
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1) Issued for loan amount 2) Claim will pay up to the current loan balance 3) Benefits the mortgage lender 4) Transferable (assignable) 5) Buyer typically pays this closing expense 6) One-time premium |
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Parties to a Deed (8)
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*Grantor ( owner giving title - must be mentally competent *Grantee ( person giving title) |
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Parts of a Deed (8)
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1) Names of grantor and grantee 2) Consideration 3) Words of conveyance 4) Interest or estate being conveyed 5) Exceptions and reservations 6) Deed restrictions 7) Appurtenances 8) Voluntary delivery and acceptance 9) Signature of grantor and two witnesses |
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Elements of a deed (8)
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CEDDING C - consideration (valuable or good) E - Execution (signed by a competent grantor and two witnesses) D - Description of the property D- Delivery and acceptance I - Interest being conveyed (habendum clause) N - Names of the grantee and grantor G - granting Clause and other clauses |
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Clauses in a deed (8)
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Granting : includes premises and words of conveyance Habendum : type of estate being conveyed Seisin : grantor has right to convey Covenant against encumbrances : property is free from liens and other encumbrances |
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Four statutory deeds (8)
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General warranty deed : most comprehensive and common type of deed used in real estate Special warranty deed : used by lenders for foreclosure properties where the grantor (lender) assumes title responsibility Bargain and Sale Deed : covenant of seisin (statement of ownership where grantor states right to convey) does not warrant to defend future title Quit Claim Deed : issued to cure title defect (clouds on title ) and grantor makes no warranties or guarantees (no covenant of seisin) |
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General Warranty deed (8)
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Covenant of seisin & against encmbrances (Quiet enjoyment, further assurance, warranty forever) |
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Special purpose deeds (8)
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Personal representative deed (settles estate of deceased) Guardian's deed (act on behalf of minor) Committee's deed (incompetent grantor) Tax deed (property sold for nonpayment of taxes) |
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Government restriction on ownership (8)
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PET P- Police Power E- Eminent domain T- Taxation |
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Private restrictions on ownership (8)
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DELL D- Deed restrictions E- Easements L- leases L- liens |
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Restrictive covenants versus deed restrictions (8)
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Deed restrictions refer to a single parcel of land. Restrictive covenants concern entire subdivisions. |
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Easements (8)
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Easement appurtenant : benefits an adjacent parcel of land ; cross over land to reach other parcel Easement in gross: benefits individual or a business entity ; utility easement Easement by necessity : created through court of law to allow property to enter and exit their landlocked property Easement by prescription: created by a court of law after longtime usage |
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Encroachments (8)
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Unauthorized use of another's property. More than 7 years = implied easement
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Types of leases (8)
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Gross lease : tenant pays a fixed rent; landlord pays expenses Net lease : tenant pays fixed rent plus property cost Percentage lease : tenant pays rent based on gross sales Variable lease : tenant pays specified rent increases based on predetermined index at set future dates Ground lease : tenant leases land only and erects a building |
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Assignment and sublease (8)
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Assignment : lessee transfer to another party all of the leased property Sublease : lessee transfers less than the entire property or all for less than the full remaining period |
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Lien (8) |
claim to have a debt or other obligation satisfied out of property belonging Voluntary ; mortgage lien Involuntary ; liens created by law |
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General liens (8)
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Not restricted to pone property but may affect all properties of a debtor ex; judgement lien, Income tax lien (IRS), Estate tax lien |
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Specific liens (8)
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Only applied to one property
ex; property tax lien, special assessment lien, mortgage lien, vendor's lien, construction lien. CONSTRUCTION LIEN MUST BE FILED WITHIN 90 DAYS AFTER LAST WORK |
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lien priority (8)
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Superior liens : property tax liens, special assessment liens, federal estate tax liens Junior liens : based on recording date Construction liens ; exceptions - needs subordination agreement |
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MATH : calculate the rent owed for a percentage (overage) lease (8)
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1) gross sales - sales threshold = gross sales subject to rent 2) gross sales subject to rent * percentage charge in lease = additional rent 3) Base rent + additional rent = total rent |
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MATH : Calculate the rent owed for a variable (index) lease (8)
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1) New index - original index = difference in index 2) Difference in index / original index = percent increase 3) Previous rent * percent increase = increase in rent amount 4) Previous rent + increase in rent = new rent |
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Brokerage Offices (4)
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1) Required to have and office and register office with DBPR 2) Must be at least one enclosed room in a stationary building 3) Broker's books, records, and real estate transaction files must be kept in office 4) Not required to have a telephone, desk, business checking account, or escrow account 5) Office may be residence as long as entrance sign displayed and local zoning permits business in residence 6) Sales associates must register and work out of the broker's office or branch office |
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Branch offices (4)
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1) Each branch office must be registered (2 year period) 2) NOT transferable to another location 3) May reopen branch office in same location during same license period by requesting reissue branch license 4)TEMPORARY SHELTER is NOT a branch office (unless records are maintained there) |
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Active Real estate brokers must display an official entrance office sign (4)
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1) Trade name (if used 2) name of the broker 3) Words "Licensed Real Estate Broker |
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Entrance Sign of brokerage partnerships, cooperation's, limited liability companies, or limited liability partnerships (4)
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1) Name of business (or trade name) 2) Name of at least one active broker 3) Words Licensed Real estate Broker 4) Names of sales associates must be separate from broker's names and identified as associates |
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Advertising (4)
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1) broker activity 2) must be in the name of the brokerage and under the supervision of the broker 3) Sales associates may not advertise real estate services in their own name |
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Blind advertising (4) |
1) fails to disclose name of the brokerage firm 2) advertising must be worded so that reasonable people know they are dealing with a licensee |
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Personal Identification (4)
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1) If licensee includes their personal name, must use their last name as registered with the DBPR 2) FREC does not require brokerage firms phone number or address be included in ads 3) Yard signs, classified ads, and promotional advertising must include name of brokerage firm |
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False advertising (4)
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Second Degree misdemeanor
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Internet sites (4)
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1) Must include point of contact information 2) Internet Ads must include Brokerage firm's name |
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Unauthorized use of association name (4)
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1) must be a member in good standing to use designation 2) false advertising if not entitled to represent oneself as a meber |
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Licensee selling property "by owner" (4)
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1) May place classified ad 2) not required to indicate they are licensees IN THE AD 3) should disclose to prospective buyers that they are licensed prior to serious negociations |
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Telephone Solicitations (4)
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1)Must search the National Do Not Call registry before making telemarketing calls 2) Violators fined up to $11,000 or 16,000$ per call |
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State Telephone regulations (4)
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1) No-sales-solicitation calls list 2) allows agents to call FSBO or expired listings 3) Violators may be fined $10,000 per call 4) Cannot fax without permission |
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Escrow or trust accounts (4)
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1) Money associated with leasing property must be held in escrow 2) Brokers not required but should keep earnest money deposits separate from rental deposits 3) Broker must be signatory on broker's escrow account 4) Broker must reconcile escrow account each month 5) Broker must review, sign, and date monthly reconciliation 6) Broker accountable for reviewing accounting procedures to ensure compliance with Florida law |
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Immediately defined (4)
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1) Sales associate = no later than the end of the next business day
2) Broker's must place deposits into their escrow account no later than the end of the THIRD business day 3) the date the buyer gives funds to the brokerage not included in time period 4) Broker's 3 business day time period always begins on the business day after the check is given to the brokerage company |
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Post dated checks and insufficient funds (4)
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1) Broker must obtain seller's approval before accepting post dated check 2) Broker is not held responsible for the nonpayment of an escrow check provided the broker timely deposits the check |
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Acceptable depositories (4)
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1) Florida commercial banks, savings associations, credit unions 2) Attorney's and title companies with trust powers may hold funds instead of the broker(NOT in stock or bonds) |
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