What are the types of brokerage relationships that have been authorized by Florida State?

When a real estate broker accepts employment as a single agent of the buyer or the seller, the broker enters into a fiduciary relationship. True False

The statement is TRUE. A fiduciary is defined as a broker in a relationship of trust and confidence between the broker as agent and the seller or a buyer as principal. Note that a sales associate or broker associate owes the same fiduciary obligations to the principal as does the broker.

Dual agency exists when a real estate broker represents both parties in a transaction in a fiduciary capacity.

True False

The statement is TRUE. Dual agency can lead to a conflict of interest. Such being the case, dual agency was revoked in the state of Florida in 1997.

A real estate licensee who enters into a transaction broker relationship must give the customer a transaction broker disclosure notice.

True False

The statement is FALSE. Effective July 1, 2008, licensees are no longer required to give customers a written disclosure notice when a transaction broker relationship is chosen.

Code of Ethics adopted by the National Association of REALTORS® emphasizes fair dealings in three major areas: (1) with clients, (2) with other real estate brokers, and (3) with the general public.

True False

The statement is TRUE. Adopted in 1913, the Code of Ethics emphasizes fair dealings with clients, with other real estate brokers, and with the general public.

A transaction broker is a broker who provides representation to a buyer, a seller, or both in a real estate transaction, and who represents either the buyer or seller in a fiduciary capacity or as a single agent.

True False

The statement is FALSE. A transaction broker is a broker who provides limited representation to a buyer, a seller, or both, but who does not represent either in a fiduciary capacity or as a single agent.

Confidential information learned during the course of the single agency cannot be divulged by the broker until the transaction has concluded and the agent-principal relationship has ended.

True False

The statement is FALSE. Confidential information learned during the course of the single agency cannot be divulged before or after the transaction has concluded and the agent-principal relationship has ended.

A single agent is defined as a broker who represents, as a fiduciary, the buyer or seller but NOT both in the same transaction. True False

The statement is TRUE. A single agent is a broker who represents, as a fiduciary, the buyer or seller but not both in the same transaction.

Residential sales are defined as the sale of improved residential property of two or fewer units, the sale of unimproved residential property intended for use as two or fewer units, or the sale of agricultural property of five or fewer acres.

True False

The statement is FALSE. Residential sales are defined as the sale of improved residential property of four (not two) or fewer units, the sale of unimproved residential property intended for use as four (not two) or fewer units, or the sale of agricultural property of ten (not five) or fewer acres.

A person who gives or delegates authority to another is referred to as the agent, while the person who accepts the authority is referred to as the principal.

True False

The statement is FALSE. The opposite is true: a person who gives or delegates authority to another is referred to as the principal; the person who accepts the authority is referred to as the agent.

An agency relationship between a principal and broker may be terminated by the principal for any reason.

True False

The statement is FALSE. A principal is not free to revoke an agency relationship in all circumstances. The principal may revoke an agency if the agent breaches one or more of the fiduciary duties. Several other events could terminate an agency relationship, such as the fulfillment of the agency's purpose, mutual agreement to terminate the agency, or bankruptcy of the principal.

In Florida, which type of brokerage relationship is presumed?

A) Transaction broker B) Single agent C) General D) No brokerage

The answer is TRANSACTION BROKER. Under Florida law, it is presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established.

Which statement is unique to the transaction broker relationship?

A) The buyer or seller must give written consent to enter into the brokerage relationship. B) The agent is obligated to a duty of obedience. C) The licensee must disclose all known facts that materially affect the value of the real property. D) The customer is not responsible for the acts of the licensee.

The answer is THE CUSTOMER IS NOT RESPONSIBLE FOR THE ACTS OF THE LICENSEE. The duty of obedience is unique to the single agent relationship. In all three brokerage relationships, when dealing in residential real estate, the licensee must disclose all known facts that materially affect the value of the real property. The licensee is not required to give written notification of the brokerage relationship duties in a transaction broker relationship. The buyer or seller is not required to sign the disclosure unless transitioning from one brokerage relationship to another.

Is a broker required to retain the brokerage relationship disclosure documents, and if so, for how long, if a written nonresidential transaction that utilized designated sales associates fails to close?

A) The broker is required to retain disclosure documents only for contracts that go to title closing. B) The broker must retain the disclosure documents for 90 days to give ample opportunity for the parties to close the transaction. C) The broker must retain the disclosure documents for two years even if a nonresidential transaction fails to close. D) The broker must retain the disclosure documents for five years even if a nonresidential transaction that utilized designated sales associates fails to close.

The answer is THE BROKER MUST RETAIN THE DISCLOSURE DOCUMENTS FOR FIVE YEARS EVEN IF A NONRESIDENTIAL TRANSACTION THAT UTILIZED DESIGNATED SALES ASSOCIATES FAILS TO CLOSE. Brokers must retain brokerage relationship disclosure documents for five years for all nonresidential transactions that utilize designated sales associates that result in a written contract to purchase and sell real property. This requirement includes files of properties that may have failed to close.

In general business dealings, which type of agent is authorized by the principal to perform acts related to a certain business or to employment of a particular nature?

A) General B) Universal C) Special D) Subagent

The answer is GENERAL. A general agent is authorized by the principal to perform only acts related to a business or to employment of a particular nature.

Which disclosure notice must be signed by the buyer and the seller in certain nonresidential transactions?

A) Request to use designated sales associate representation B) Single agent C) Consent to transition D) No brokerage relationship

The answer is REQUEST TO USE DESIGNATED SALES ASSOCIATE REPRESENTATION. The buyer and seller must sign the disclosure notice stating that their assets meet the threshold and requesting that the broker use the designated sales associate form of representation.

Which information must be disclosed to a prospective buyer regarding a particular property?

A) Neighborhood residents comprise several ethnic groups B) Student-teacher class ratios for the public K-12 schools assigned to the neighborhood's district C) Property is located in a flood zone area that requires flood insurance coverage D) Seller's wife was diagnosed with immune deficiency syndrome

The answer is PROPERTY IS LOCATED IN A FLOOD ZONE AREA THAT REQUIRES FLOOD INSURANCE COVERAGE. Licensees have a duty to disclose to buyers all known facts that materially affect the value of a residential property.

Which element is NOT a cause of action for fraud in a real estate transaction? A) The licensee failed to disclose a material fact concerning the transaction. B) The buyer relied on the misstatement of fact. C) The licensee represented the buyer in the transaction. D) The buyer was damaged by the action.

The answer is THE LICENSEE REPRESENTED THE BUYER IN THE TRANSACTION. There are four elements of a cause of action for fraud: (1) the licensee made a misstatement or failed to disclose a material fact; (2) the licensee either knew or should have known that the statement was not accurate or that the undisclosed information should have been disclosed; (3) the buyer relied on the misstatement; and (4) the buyer was damaged as a result.

Which action does NOT terminate a single agent brokerage relationship with the seller? A) Fulfillment of the brokerage relationship's purpose B) Bankruptcy of the principal C) Withdrawal of an offer to purchase D) Death of a seller's broker

The answer is WITHDRAWAL OF AN OFFER TO PURCHASE. The brokerage relationship exists between the brokerage company and the seller. Therefore, withdrawal of an offer to purchase does not terminate the single agent relationship entered into with the seller.

A real estate broker who works in a limited capacity for both the buyer and the seller in the same transaction is

A) a third party intermediary. B) a designated sales associate. C) a transaction broker. D) bound to fiduciary duties to both the buyer and the seller.

The answer is A TRANSACTION BROKER. A transaction broker is a broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does not represent either party in a fiduciary capacity or as a single agent.

Which brokerage relationship duty applies only to a transaction broker relationship?

A) Account for all funds B) Full disclosure C) Exercise limited confidentiality D) Deal honestly and fairly

The answer is EXERCISE LIMITED CONFIDENTIALITY. Full disclosure is a single agent duty. Dealing honestly and fairly and accounting for all funds apply to all three disclosure relationships. Exercising limited confidentiality is a brokerage relationship duty unique to transaction broker relationships.

The brokerage relationship disclosure requirements in Chapter 475 apply to which transaction?

A) Sale of three vacant lots zoned for single-family use B) Lease of a single-family home C) Sale of a coffee shop in a residential neighborhood D) Sale of a 150-unit condominium complex

The answer is SALE OF THREE VACANT LOTS ZONED FOR SINGLE-FAMILY USE. Brokerage relationship disclosure requirements apply to residential transactions. A residential sale is defined as the sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, and the sale of agricultural property of ten or fewer acres.

Which brokerage relationship duty applies to all three types of brokerage relationships?

A) Loyalty B) Accounting for all funds C) Confidentiality D) Using skill, care, and diligence

The answer is ACCOUNTING FOR ALL FUNDS. Loyalty and confidentiality are single agent duties. The duty to use skill, care, and diligence is a duty of transaction broker and single agent relationships. Accounting for all funds applies to no brokerage, transaction broker, and single agent relationships.

On Sunday at an open house, a sales associate receives two offers on a home listed for $300,000. One offer is for $250,000 cash at closing. The second offer is for $295,000 contingent upon the buyer securing a mortgage for 90 percent of the sale price. What action should the sales associate take?

A) Present both offers, explaining the details of each contract to the seller B) Present only the higher priced offer because it will result in the highest commission C) Present the offer received first, and if declined, present the second offer D) Present the higher priced offer first, and if declined, present the second offer

The answer is PRESENT BOTH OFFERS, EXPLAINING THE DETAILS OF EACH CONTRACT TO THE SELLER. Unless a party has previously directed the licensee otherwise in writing, the licensee must present all offers and counteroffers in a timely manner.

Which brokerage disclosure notice must be signed or initialed by the buyer or seller before implementation?

A) Transition to transaction broker B) Single agent C) No brokerage relationship D) All of the brokerage disclosure notices must be signed or initialed before implementation

The answer is TRANSITION TO TRANSACTION BROKER. A single agent relationship may be changed to a transaction broker relationship (or another relationship), provided the agent first obtains the principal's written consent to the change in relationship. The buyer or seller (or both) must either sign or initial the consent to transition to transaction broker notice.

In commercial real estate transactions that meet specific criteria, a real estate brokerage may use one sales associate to work as a single agent of the buyer and another sales associate to act as a single agent of the seller. Which criteria must be met?

A) The buyer and seller must agree to sign the Transition to Two Single Agents Notice. B) The buyer and seller must each have assets of at least $2 million. C) The broker must serve as a neutral party and not give guidance or representation to the buyer and the seller. D) The buyer and seller must agree to sign the Irrevocable Consent to Service Agreement.

The answer is THE BROKER MUST SERVE AS A NEUTRAL PARTY AND NOT GIVE GUIDANCE OR REPRESENTATION TO THE BUYER AND THE SELLER. The buyer and seller may request, in certain commercial real estate transactions, that two sales associates be designated, with one to act as a single agent for the buyer and the other sales associate to act as a single agent of the seller. The broker serves as a neutral party helping to facilitate the process without giving guidance or representation to the parties in the transaction.

Which statement is unique to the transaction broker relationship?

A) The buyer or seller must give written consent to enter into the brokerage relationship. B) The agent is obligated to a duty of obedience. C) The licensee must disclose all known facts that materially affect the value of the real property. D) The customer is not responsible for the acts of the licensee.

D) The customer is not responsible for the acts of the licensee.

What are the brokerage relationships in Florida?

What kind of authorized brokerage relationships are allowed under Florida law?

Which type of Florida brokerage relationship is presumed?

What is a brokerage relationship?