Chapter 4 - Key Concepts

Front 1

What are three types of law that society looks to for guidance regarding agency relationships?

Back 1

1) common law

2) statutory law

3) administrative law

Front 2

Fill in the blank: The agency relationship creates a _____________ with the principal.

Back 2

fiduciary relationship

Front 3

Name the three types of agents.

Back 3

1) universal agent

2) general agent

3) special agent

Front 4

What is the purpose of the Brokerage Relationship Disclosure Act?

Back 4

to inform and educate the public regarding the types of authority (brokerage relationships) that can be granted to a broker and the duties brokers have in each type of brokerage relationship

Front 5

Name the three brokerage relationship options in all real estate transactions concerning the role of the real estate brokerage firm.

Back 5

1) transaction broker

2) single agent

3) no brokerage relationship

Front 6

In what real estate transactions are written disclosures required?

Back 6

residential real estate transactions

Front 7

True or False: Licensees are no longer required to give customers a written disclosure when a transactional broker relationship is chosen.

Back 7

True

Front 8

Which brokerage relationships must be established in writing?

Back 8

single agent and no brokerage relationship

Front 9

What are the seven duties of the transaction broker?

Back 9

1) deal honestly and fairly

2) account for all funds

3) use skill, care and diligence in the transaction

4) disclose all known facts that materially affect the value of the residential real property and are not readily observable to the buyer

5) present all offers and counteroffers in a timely manner

6) exercise limited confidentiality

7) perform any additional duties that are mutually agreed to with a party

Front 10

What are the three duties of a licensee in a no brokerage relationship?

Back 10

1) deal honestly and fairly

2) disclose all known facts that affect value of residential property

3) account for all funds

Front 11

What are the nine duties of a licensee in a single agent relationship?

Back 11

1) deal honestly and fairly

2) disclose all known facts that affect value of residential property

3) account for all funds

4) use skill, care and diligence

5) present all offers and counteroffers in a timely manner

6) confidentiality

7) obedience

8) loyalty

9) full disclosure

Front 12

True or False: For brokers to be loyal to their principals, they can exercise duties in such a manner as to profit themselves or anyone else at the expense of the principal.

Back 12

False. For brokers to be loyal to their principals, they cannot exercise duties in such a manner as to profit themselves or anyone else at the expense of the principal.

Front 13

True or False: The duty of loyalty includes disclosing to the principal if the agent becomes personally interested in the principal's property.

Back 13

True.

Front 14

True or False: A broker is never free to use confidential information to the disadvantages of or reveal any harmful or unfavorable information about a former principal.

Back 14

True

Front 15

True or False: Agents may be held responsible for material facts they should have known and communicated to their principal but did not.

Back 15

True

Front 16

True or False: I t is legal for a broker who has terminated the agent-principal relationship to buy from the principal and subsequently sell at a higher price and keep the profit.

Back 16

False. To do so could be construed as fraud, misrepresentation, concealment and/or dishonest dealing and could expose the broker to liability to both seller and buyer for the full amount of the secret profit.

Front 17

Name the four unique duties of a single agent.

Back 17

1) Confidentiality

2) Obedience

3) Loyalty

4) Disclosure

Hint 17

COLD

Front 18

True or false: A broker working in a no brokerage relationship capacity with a seller can enter into a listing agreement with that seller and be paid commission.

Back 18

True

Front 19

True or False: The single agent disclosure must be made before, or at the time of, entering into a listing agreement or an agreement for representation, or before the showing of property, whichever occurs first.

Back 19

True

Front 20

True or False: The no brokerage relationship notice must be disclosed in writing before the showing of property.

Back 20

True

Front 21

True or False: Regarding the disclosure requirements, the first sentence must be printed in uppercase and bold type.

Back 21

True

Front 22

True or False: In the disclosure notice, the list of duties must be presented on the disclosure in the same order as listed in the statute.

Back 22

True

Front 23

Fill in the blank: Under Florida law, it is presumed that all licensees are operating as _________ unless another brokerage relationship is established.

Back 23

transaction brokers

Front 24

True or False: In a disclosure notice, the customer's (principal's) signature is mandatory.

Back 24

False. Although the disclosure notice provides for the customer's (principal's) signature, the signature is not mandatory (except for the transition to transaction broker notice and the designated sales associate disclosure)

Front 25

Under what circumstances can a brokerage firm act as a single agent to both the seller and the buyer?

Back 25

In nonresidential transactions where the buyer and seller each have assets of $1 million or more and at the request of the buyer and seller.

Front 26

For how long must brokers retain agreements that engage the services of a broker (brokerage relationship disclosure documents and buyer broker agreements) on file?

Back 26

Five (5) years

Front 27

True or False: Files of properties that have failed to close do not need to be retained.

Back 27

False. Files of properties that have failed to close must also be retained. If a transaction fails to close, the licensee should retain the brokerage relationship disclosure documents associated with the property, and place them in the "dead" file

Front 28

List 9 reasons by which a brokerage relationship between a principal (or a customer) and a broker may be terminated.

Back 28

1) fulfillment of the brokerage relationship's purpose

2) mutual agreement to terminate the brokerage relationship

3) expiration of the terms of the agreement

4) broker renounces the single agent relationship by giving notice to the principal or the broker renounces the transaction broker relationship by giving notice to the customer

5) principal revokes a single agent relationship or the customer revokes a transaction broker relationship, by giving notice

6) death of a seller's broker or the seller before the broker finds a ready, willing and able buyer

7) Death of the buyer's broker or the buyer before the broker finds a suitable property for the buyer

8) Destruction of the property or condemnation by eminent domain

9) Bankruptcy of the principal or the customer

Front 29

True or False: The principal or customer may be liable for damages, such as advertising expenses, incurred by revoking the brokerage relationship prior to the termination date of the listing contract or exclusive buyer contract.

Back 29

True

Front 30

The NAR Code of Ethics emphasizes fair dealings in what three areas?

Back 30

1) with clients

2) with other real estate brokers

3) with the general public

Front 31

Fill in the blanks: To maintain membership in NAR, REALTOR members must complete _____ of ethics training every ________.

Back 31

To maintain membership in NAR, REALTOR members must complete 3 hours of ethics training every 4 years.