Review Exam #1

Question 1 of 100

Limited partners in a limited partnership may invest

cash or services.
services or property.
cash or property but not services.
cash, property or services.

Question 2 of 100

A sales associate received a cash deposit for property on Saturday. He replaced it with his own personal check and spent the cash during the weekend. This is

legal, since the deposit was placed in escrow within 1 business day.
conspiracy.
an overage.
commingling.

Question 3 of 100

Which can have perpetual existence?

a partnership
a corporation
a joint venture
a sole proprietorship

Question 4 of 100

Which is a suspension offense?

Failure of the examination
Culpable negligence
Poor references
Becoming a nonresident

Question 5 of 100

Which is a violation of a subpoena?

Disorderly conduct at a hearing
Continuing to list and sell real property
Failure to appear
Continued activity after a court order to cease and desist

Question 6 of 100

Which statement is true regarding determination of the party the broker legally represents?

The party who pays the commission is the broker's principal.
The party who authorizes the broker to act on his or her behalf in a transaction as a single agent is the broker's principal.
Either a single agent or a transaction broker has full representation duties to both parties in a transaction.
An agency relationship cannot be established legally unless some type of consideration is paid.

Question 7 of 100

A general partnership registered as a real estate broker in Florida may be dissolved by

action of the stockholders.
failure to pay an annual report fee to the state.
death or withdrawal of one or more partners.
a decision of the Florida Partnership Board.

Question 8 of 100

A single agent seller’s broker owes which of the following duties to the prospective buyer?

Disclosure of known facts affecting the value of the property
Obedience
Loyalty
Full disclosure about the sellers' motivation.

Question 9 of 100

The legal term that applies when two real estate brokers who are not actual partners do not clearly separate their business activities and appear to be partners is

quasi-partnership.
ostensible-contract.
quasi-corporation.
quasi-joint venture.

Question 10 of 100

Which is correct about the Consent to Transition to Transaction Broker Notice?

The principal must absolutely sign the notice before the single agent may transition to a transaction broker.
Signatures are desirable but not required.
It must be provided at first contact with a customer.
It is used when a transaction broker wishes to become a single agent.

Question 11 of 100

If a broker and a principal have a dispute relative to a real estate commission, the dispute would normally be settled by

the local board of REALTORS that has jurisdiction over the property.
a court of law.
the Florida Real Estate Commission.
an officially issued escrow disbursement order.

Question 12 of 100

Florida Statutes prohibit members from serving on the Commission for more than

one two-year term.
one four-year term.
two consecutive four-year terms.
three consecutive two-year terms.

Question 13 of 100

Jill sells commercial property. Which is correct about her brokerage relationships?

She need not provide a brokerage relationship notice to potential buyers and sellers.
She is required to be a designated sales associate in all transactions.
She must provide a brokerage relationship notice before showing property or entering into an agreement to provide services.
She is presumed to be a single agent.

Question 14 of 100

The F.R.E.C. test questions and exams are

confidential for two years.
confidential at all times.
distributed among brokers.
given to real estate school instructors.

Question 15 of 100

Which is correct about how long an applicant may use the pre-license course grade slip?

two years to pass the exam
one year to pass the exam
one year to take the exam
indefinitely

Question 16 of 100

A broker sold a rental list to a New Yorker. The broker received a fee of $100 for the list. The broker gave information on the list that was incorrect in several instances. The customer demanded a refund ten days later. The broker must

give 100% of the money back.
give 75% of the money back.
give nothing back.
split the deposit with the owner.

Question 17 of 100

Which is NOT one of the FREC settlement procedures in case both parties make conflicting demands for a broker’s trust deposit?

Mediation
Arbitration
Escrow disbursement order
Interpleader

Question 18 of 100

Two brokers share office space but have separate firms. They do not have separate offices nor signs. What is their unofficial status?

Joint adventure
General partnership
Limited partnership
Ostensible partnership

Question 19 of 100

A broker and a sales associate make a plan together to defraud a prospective buyer. Both licensees are

liable in a civil action, but will probably not be disciplined by FREC.
not liable if the plan didn't work and no damages actually resulted.
not liable since a sales associate is under the direction of a broker.
guilty of conspiracy and liable for damages and disciplinary action.

Question 20 of 100

If a veteran licensee fails to renew within a year after expiration, the license is

involuntary inactive.
suspended.
revoked.
subject to judicial review for reinstatement.

Question 21 of 100

A sales associate receives an offer on property and accepts a deposit. Until the offer is accepted the deposit is legally under the control of the

broker.
sales associate.
buyer.
seller and buyer.

Question 22 of 100

A brokerage firm developed 125 lots. To help market the property, the broker started a lottery with the grand prize being a free lot. The lottery was open to buyers of lots, and was contingent upon the broker selling at least 80 lots within 3 months. The broker

has not violated the law because the broker was also acting as developer.
has violated Florida law.
has not violated the law because this is legal.
has not violated the law if he refunded the money.

Question 23 of 100

How long must a sales associate work for one or more brokers in order to meet the requirements for becoming a broker in Florida?

1 year
6 months
2 years
18 months

Question 24 of 100

A broker is temporarily insane. The commission will probably

suspend the license indefinitely.
revoke his license.
suspend the license during the time of incapacitation.
suspend the license for a minimum of 2 years.

Question 25 of 100

The division of the real estate business characterized by the buying of a real property for the rental income to be derived over a long period of time is called

agency.
construction.
investment.
appraisal.

Question 26 of 100

Real property ads and signs of a licensed broker must include the name of the

broker associate who obtained the listing.
broker’s personal name only.
brokerage firm.
seller or broker's principal.

Question 27 of 100

Which business entity results in unlimited liability to the principals?

general partnerships
limited partnerships
nonprofit corporations
corporations for profit

Question 28 of 100

Which is NOT a necessary part of the application to become a sales associate?

Electronic fingerprints
Two passport photos of the applicant
An application fee
A completed application form

Question 29 of 100

A licensee need NOT give a brokerage relationship disclosure when

selling a duplex.
acting as a designated sales associate.
acting as a single agent.
acting as a transaction broker.

Question 30 of 100

Which is/are required to be included with the application for a real estate license?

Birth certificate
Reference from a Florida broker
Both
Neither

Question 31 of 100

During the course of its regular monthly meeting, the Real Estate Commission reduced the renewal fees to an amount below the maximum allowed under Chapter 475 F.S. These actions will be reflected formally in changes to

FS 455.
FS 475.
Rule 61J2.
Rule 22I.

Question 32 of 100

If an individual fails to answer a question on an application, which of the following applies?

The F.R.E.C. will assume that the fact does not exist.
The application will be granted.
The application will be denied
Test results will be withheld pending completion of the application.

Question 33 of 100

FREC members are appointed by the

Governor.
Governor with Senate confirmation.
Governor with approval BPR.
Secretary of State.

Question 34 of 100

A broker wants all sales associates to be independent contractors. What may he provide for the sales associates?

business cards
a weekly salary
training
a company car

Question 35 of 100

There are five partners in a brokerage firm. How many must be active brokers?

all five
at least two
one
none, provided all are registered as involuntarily inactive brokers.

Question 36 of 100

When the term “foreign corporation” is used relative to registration as a real estate broker in Florida, it means that the business entity is chartered

outside the state of Florida.
outside the continental United States only.
outside the 50 states.
in a foreign country.

Question 37 of 100

A brokerage corporation must have

at least two active brokers who are officers.
at least one officer who is voluntarily inactive.
at least one active broker.
at least one active broker and one unlicensed but registered officer.

Question 38 of 100

A broker in Georgia referred a prospect and came to Florida to help the Florida broker consummate the sale. The Georgia broker demanded a referral commission. Which is correct?

The broker is due a referral commission.
The broker may only be paid expenses.
The Florida broker may not pay the commission.
20% is the maximum referral fee which may be paid.

Question 39 of 100

Which cannot broker real estate?

a corporation
a corporation sole
a limited partnership
a partnership

Question 40 of 100

FREC makes a new rule regulating real estate practice in Florida. Which is correct?

Only the legislature can do this.
Only the governor can do this.
Only the DBPR can do this.
FREC may do this.

Question 41 of 100

What is the license period after the initial renewal?

1 year
2 years
3 years
dependent upon the effective date

Question 42 of 100

In order for a broker to be entitled to compensation, it is first necessary to establish a condition of

confidence.
trust.
title conveyance.
employment.

Question 43 of 100

A sales associate’s license is effective

when the sales associate passes the state exam.
immediately after the renewal period begins.
when the application is mailed.
none of the above

Question 44 of 100

A licensed broker regularly pays a 15% referral fee to an attorney who sends prospects to the broker. Which is correct?

The broker may pay the referral fee.
The attorney may collect the fee.
This is a violation of Chapter 475, FS.
The fee would be legal if it did not exceed 2% of the transaction price.

Question 45 of 100

Caveat emptor means

a person must be informed of the charges filed against him within 24 hours.
a special relationship of trust and confidence requiring total loyalty.
the government may take property for public purpose for a fair price.
let the buyer beware.

Question 46 of 100

Upon completion of the complaint process, Broker Stewart was convicted of three violations of the license law. The FREC CANNOT

revoke or suspend Stewart’s license.
reprimand Broker Stewart.
fine Stewart $3,000.
imprison Broker Stewart.

Question 47 of 100

Which is NOT correct?

Time share plans registered with the SEC are exempt from Chapter 475.
The real estate license is prima facie evidence of Florida residency.
The one paid a real estate commission is always guilty unless licensed or exempt.
There is no status called inactive broker associate.

Question 48 of 100

A sales associate is guilty of concealment. Which is correct?

Only brokers can be guilty of concealment.
His license must be suspended.
He has violated the Statute of Frauds.
His license may be revoked.

Question 49 of 100

A sales associate writes a purchase contract. The buyer defaults. The sales contract states that the broker is entitled to 50% of the deposit in case of default. The broker does nothing to retain the deposit. What can the sales associate do?

Sue the seller for his share
Sue in court, but is liable to the broker for the broker's share
Sue in his own name for his portion of the deposit
Sue the buyer for his share

Question 50 of 100

What best describes a fiduciary relationship?

skill, care and diligence in a real estate transaction.
A principal’s confidence that the broker will succeed and be honest.
trust and confidence between a broker and her principal.
trust and confidence between a customer and a transaction broker.

Question 51 of 100

Mrs. Jones wants to sell her day-care center as a going concern. Which one of the following professionals should she contact?

a business broker
a property manager
a mortgage broker
a real estate broker

Question 52 of 100

The maximum sales commission rate a broker may charge in Florida is

7 percent.
7-1/2 percent.
18 percent.
any rate agreed upon by the broker and principal.

Question 53 of 100

A real estate licensee working in a nonrepresentative capacity has all duties EXCEPT

disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
dealing honestly and fairly.
accounting for all funds entrusted to the licensee.
loyalty.

Question 54 of 100

If a real estate licensee is lawfully subpoenaed by a court or agency but elects not to appear, the licensee may be

held in contempt.
held in contempt and fined.
held in contempt, fined, and suspended.
held in jail to ensure his/her appearance.

Question 55 of 100

An unlicensed person who violates Chapter 475 is subject to

suspension.
fine and/or imprisonment.
revocation.
suspension, fine and/or imprisonment, and revocation.

Question 56 of 100

Broker Brown and Broker Smith share office space but have separate firms. While awaiting the signs informing the public of this fact, they have a (an)

joint adventure.
general partnership.
limited partnership.
ostensible partnership.

Question 57 of 100

Which is an INCORRECT statement?

The BPR has 30 days to notify an applicant of errors or omissions.
An applicant must be at least 18 years old.
An applicant must be a resident of Florida.
An applicant need not be a U.S. citizen.

Question 58 of 100

In a real estate brokerage general partnership

a partner’s liability is limited to the amount of the investment made by that partner in the business.
a certificate of partnership must be filed with the Department of State.
if the only active broker dies or resigns, the vacancy must be filled within 14 calendar days or the partnership license will be canceled.
the partnership entity pays taxes only on the earned income.

Question 59 of 100

In what cases will a sales associate NOT be disciplined for fraud by the FREC?

when the sales associate did not intend to defraud
when the sales associate provided full restitution to the damaged party
when no damage resulted from the fraud
any or all of the choices may result in disciplinary action by the Commission.

Question 60 of 100

The only broker who may refer to a customer as his or her principal is a

nonagent.
dual agent.
transaction broker.
single agent.

Question 61 of 100

A sales associate wants to participate in the ownership of a brokerage corporation and the broker agrees. The sales associate may

become an officer of the corporation.
become a stockholder in the corporation.
become a director of the corporation.
become the president of the corporation.

Question 62 of 100

When can a person collect from the Real Estate Recovery Fund?

Violation of FS 475 by licensee, uncollectible judgment
Violation of FS 475 by any person, uncollectible judgment
Violation of FS 475 by licensee, collectible judgment
No violation by licensee, civil uncollectible judgment

Question 63 of 100

Whether an act constitutes fraud probably is dependent upon

the acts of the customer.
the acts of the principal.
the interpretation of the perpetrator.
the relationship of the parties.

Question 64 of 100

Which is NOT a violation of the license law?

A Florida sales associate who relocates to North Carolina
A broker who does not have a sign at the entrance to his office
An ostensible partnership of brokers
A broker who does business without a current, active license.

Question 65 of 100

The chairman of the FREC is

selected every three years from its members.
selected every year from its members.
appointed by the Governor.
named by the Legislature.

Question 66 of 100

Sales associate Sam gets an offer. His broker is out of town. A second offer is received. He should

decide which offer is the best for the seller and present it.
determine which offer provides the highest commission and present it.
accept the highest offer for the seller.
present both offers.

Question 67 of 100

Before renewing a license for the second time, a broker or sales associate must complete a course of approved continuing education consisting of _____ hours?

7
14
21
63

Question 68 of 100

A joint venture usually is created to

simplify partnerships.
allow separate entities to work together on a single project.
quiet title.
eliminate personal liability for debts.

Question 69 of 100

Jacqueline and Samuel are sales associates for Able Realty. Jacqueline lists a house as a single agent. Samuel is working as a single agent with a buyer, who becomes interested in Jacqueline’s listing. All of the following statements are correct EXCEPT

The sales associates, with the informed written consent of both parties, may take the status of a transaction broker.
Either or both of the parties may agree to have no official brokerage relationship in the transaction and proceed on that basis.
If Jacqueline and Samuel become transaction brokers, they have duties of limited confidentiality.
The sales associates may become designated salespersons in the transaction.

Question 70 of 100

If a broker fails to reveal relevant facts to his principal, the offense is called

culpable negligence.
conversion.
conspiracy.
concealment.

Question 71 of 100

A transaction broker tells the buyer that the seller is under pressure to sell because of a pending divorce and possible foreclosure. Such disclosure is

acceptable if it results in a sale.
unacceptable because of the limited confidentiality requirements of the law.
unacceptable because the listing broker is the agent of the buyer.
acceptable if none of the details of the foreclosure are disclosed.

Question 72 of 100

Florida’s license laws consider the terms “employer” and “employee” to

exclude an independent contractor relationship.
include an independent contractor relationship.
exclude a broker/salesman relationship.
relate to a broker/principal relationship only.

Question 73 of 100

The presiding member of the FREC Probable Cause Panel

must be licensee member.
must be a consumer member.
must be a broker member.
may be either a licensee or consumer member.

Question 74 of 100

Which is correct about the requirements for good faith deposits given to sales associates and brokers?

The sales associate must give the deposit to the broker within two business days.
The broker must deposit the funds within three business days.
The broker may accept a post-dated check without the sellers permission.
The broker may hold a check longer than three days if the buyer requests it in writing.

Question 75 of 100

Arthur gives Henry a power of attorney to perform services of real estate for him, which include managing and selling investment property. Henry is a CPA. Henry sells property for Arthur and kept a 6% commission. Which is correct?

Henry has violated the law, since the sale is not within the scope of CPA duties.
Henry can do this because of the power-of-attorney.
A CPA can do this because it is within the scope of his duties.
Henry can collect because the commission is really an accounting fee.

Question 76 of 100

A real estate license is

proof of residency.
evidence of licensure.
valid for the grace period of 30 days after the expiration date shown thereon.
required for appraisers of a Florida thrift institution.

Question 77 of 100

The Department makes which information available for public inspection?

State examination questions
Copies of the answer sheet to the state exams
Financial information of the applicant
Information about how to apply for a real estate license.

Question 78 of 100

The license of Harrison Realty, Inc. has just been suspended. Sales associate Wilson, who works for Harrison Realty should

immediately activate her broker's license and open her own office.
continue to do business, but not close any transactions for 60 days.
offer to take over as broker during the term of suspension.
change offices if she desires to continue operating.

Question 79 of 100

Investigators for the Division cannot do which of the following?

Investigate thoroughly and report the findings
Investigate to determine possible violations of non-licensees
Express personal opinions about guilt or innocence resulting from his investigation
Obtain books and records for review from a brokerage firm

Question 80 of 100

The principal is responsible for the acts of his or her

transaction broker.
single agent.
dual agent.
broker if the broker has no official brokerage relationship with the customer.

Question 81 of 100

A broker who chooses to operate as a transaction broker in a real estate transaction has all of the following duties EXCEPT

limited confidentiality.
full disclosure.
presenting all offers and counteroffers in a timely manner.
disclosing all known facts that materially affect the value of residential property and are not readily observable.

Question 82 of 100

William Stipple, broker did not account properly for monies in his trust account resulting in his license being suspended. The licenses of all sales associates working for Stipple are

suspended.
revoked.
placed in involuntary inactive status.
not affected.

Question 83 of 100

Which is NOT an authorized status for a broker to take in dealing with customers?

Transaction broker
Dual agent
Single agent
No official brokerage relationship

Question 84 of 100

Unless a seller gives his consent, the seller’s agent will violate his fiduciary relationship if he accepts as an earnest money deposit

cash.
marketable securities to be converted into cash.
a post-dated check.
an ordinary check.

Question 85 of 100

A broker followed the instructions in an escrow disbursement order, but a court entered a judgment against the broker for $10,000 related to the order. The FREC paid the broker $10,000 from the Recovery Fund for the judgment. As a consequence, FREC

will take no action against the broker.
will probably suspend the broker's license.
will probably revoke the broker's license.
is required to revoke the broker's license.

Question 86 of 100

Licensed sales associates of the seller’s single agent brokerage firm

may represent either the seller or the buyer in a transaction.
are legally bound to represent the seller.
may have another principal in the transaction.
may be a transaction broker for the buyer in order to give limited confidentiality.

Question 87 of 100

The DBPR is empowered to demand information from and issue subpoenas to

real estate licensees only.
DBPR licensees only.
anyone if information relates to a case under investigation.
investigators of the BPR.

Question 88 of 100

Broker Allen, broker Bayer, and broker Carson form a partnership to buy, develop and sell land. Sales associate D becomes a partner in the firm with each partner in the firm having a 25% interest. Profits from the sales amount to $40,000.00. Which of the following applies?

The profits may be divided $10,000.00 to each partner.
The profits may only be divided in thirds with D receiving nothing.
The agreement is illegal unless the partnership registers as a broker.
The agreement is illegal unless D becomes a broker.

Question 89 of 100

A suit for interpleader may be used to

appeal a decision of the F.R.E.C.
obtain quasi-judicial relief.
prevent an unlicensed person from continuing operation.
resolve an escrow dispute.

Question 90 of 100

A broker receives referrals from a good friend. The friend incurs expenses, and the broker reimburses the friend for the expenses. The broker is careful not to pay a referral fee or a share of the commissions generated. Which of the following applies?

This is unlawful unless the expenses are valid, supported, and reasonable.
This does not violate Chapter 475, FS.
This is lawful, so long as the friend is not involved in selling.
This is an unlawful practice.

Question 91 of 100

The purpose of the state examination is to make sure that an applicant

is familiar with the real estate license law of Florida.
is competent to deal safely and confidentially with customers and principals.
knows the laws relating to real estate brokerage practices.
all the choices are correct.

Question 92 of 100

Jason Stevens, broker, is holding a $2,000 earnest money deposit in his escrow account. The buyer and seller each claim the deposit. How many days does Stevens have to notify the Division of Real Estate about the conflicting demands?

5 days
10 business days
15 business days
14 business days

Question 93 of 100

The sign at the entrance of the brokerage office must have

the broker's name.
the names of all the sales associates.
the names of both the brokers and the sales associates.
the address of the brokerage firm.

Question 94 of 100

A corporation sole is

a church that may be registered as a brokerage firm.
a corporation with only one shareholder.
a religious organization that may not be organized as a brokerage firm.
an organization that pays income taxes at the corporate level.

Question 95 of 100

A single agent broker who wishes to remain loyal to the principal

may be a transaction broker for the other party.
may transition to dual agent with the written approval of both parties.
must work with the other party in a a no brokerage relationship role.
is unable to do so if working with the other party in a transaction.

Question 96 of 100

A real estate sales associate may accept an extra commission for a difficult sale from

an appreciative seller.
a thankful buyer.
the broker-employer.
the mortgage lender.

Question 97 of 100

Which is an INCORRECT statement?

A broker applicant must have held an active license for at least 24 months with one or more brokers during the past 5 years.
The license is prima facie evidence that you are properly licensed.
Business brokers are not exempt from licensing under Chapter 475.
Applicants have only one year to apply for the state exam after passing this course.

Question 98 of 100

A sales associate and a broker form a brokerage partnership. Which is correct?

The entrance sign must have both names.
The company name must indicate the license status of each.
They cannot do this.
The broker must be the manager.

Question 99 of 100

Which will cause automatic suspension of the license?

Payment from the recovery fund (unless the broker complied with an EDO)
Imprisonment as a result of fraudulent acts in real estate
Conviction for fraud
Conviction of dishonest dealings or misrepresentation

Question 100 of 100

Students failing the end-of-course examination who wish to become licensed must

re-take the end-of-course examination after waiting at least 30 days, then pass the state exam.
wait 30 days, then repeat the course and pass both the final exam and the state exam.
wait 60 days and repeat the entire course.
retake the course exam within 30 days and pass the state exam.

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