RE Chapter 4

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RE Chapter 4
2014-09-06 21:04:41

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  1. The basic purpose of real estate law is _______
    To prevent fraud
  2. Most of the laws which regulate the real estate industry are found in the _________
    Business and Professions Code
  3. Real estate laws are passed under the authority of the _________ of government
    Police Power
  4. Regulates the real estate industry
    Bureau of Real Estate (BRE, CalBRE)
  5. Appointed by the governor to head the BRE
    Real Estate Commissioner
  6. To publish or make laws known
  7. Real Estate Commissioner has the right to _______ regulations which control the actions of real estate licensees, and have the force and effect of _____
    • Promulgate
    • Law
  8. Regulations a Real Estate Commissioner has the right to promulgate are found in the ______
    California Code of Regulations
  9. Only a ________ can issue, restrict, suspend, or revoke a real estate license (a _____ cannot)
    • Real Estate Commissioner
    • Court
  10. A non-licensed person who performs acts that require a real estate a license would be prosecuted by _______
    The District Attorney of the county in which the activity occurred
  11. Commission disputes are settled by _____, NOT  ______
    • Civil lawsuits
    • The BRE
  12. Any person who does any real estate act for another, for compensation, or expected compensation, must have a ________
  13. A real estate license is required to ________ real property for the general public
  14. A principal of real property acting for his own benefit (not working with an agent) does not need ________, unless he is buying or selling ______ loans in a calendar year
    • A license
    • 8 or more
  15. A competent person who is authorized to act on behalf of another
    Attorney in fact
  16. An instrument authorizing one person to act as another's agent, to the extent state in the instrument
    Power of Attorney
  17. An Attorney-in-fact may NOT _________
    Deed property to himself
  18. A principal may terminate a power-of-attorney by ________
  19. A trustee can conduct a trustee's sale on a trust deed without a __________
  20. Someone who works in a real estate office but performs clerical duties only
    Unlicensed assistant
  21. Activities considered illegal for an assistant to do without a real estate license (4)
    • Phone call solicitations
    • Choosing pest control company
    • Giving borrowers advice about loans
    • Creating ads without approval
  22. Without a real estate license, a property manager may manage __________
    Only the property where he resides
  23. The owner of a 16 or more unit residential property must _______ or _______
    • Live in the property
    • Have a resident property manager
  24. Requirements of a broker working under a fictitious business name (3)
    • 1) File a "Fictitious Business Name Statement" in county where office is located
    • 2) Publish the name in the newspaper
    • 3) Have broker's license issued by the BRE after name approval
  25. A broker can designate a salesperson to manage an office and review contracts as long as _________
    The salesperson has a minimum of 2 years of full-time experience (within the last 5 years) working for a broker
  26. When a salesperson shows a home listed on the MLS, the salesperson is directly responsible to ______
    His employing broker
  27. A broker can share his commission with an out-of-state broker, an unlicensed buyer, or a seller, as long as __________
    The broker discloses this to all parties
  28. The Real Estate Commissioner requires that every salesperson and every broker working for another broker have a ________ with the employing broker that must be kept for _____ after the termination of employment
    • Written employment agreement
    • 3 years
  29. Everyone in a broker's office must be insured as employees under the __________
    Worker's Compensation Insurance Law
  30. A broker must notify the Commissioner upon _____ of a salesperson's license
  31. If a salesperson is fired for a violation of real estate law, the broker must immediately _____
    Send the Commissioner a Certified written statement of facts
  32. If a broker changes any of his office addresses, he must send written notice to the Commissioner within ______ following the change
    The next business day
  33. When a prepaid rental service is moving its office, notice of the new address and phone numbers must be provided to all its clients ________
    Prior to the move
  34. Upon termination of employment of the salesperson, a broker will return the license to the salesperson within _____
    3 days
  35. A broker must keep copies of listings, receipts, canceled checks, trust records, and any other transaction-related documents for ______ after the listing or closing date
    3 years
  36. When a broker uses electronic documents and signatures, he must still provide paper copies upon request to ______
    The BRE
  37. A separate checking account established by a broker to hold clients' money, with the purpose of not mixing clients' and broker's funds (comingling) and thus preventing legal issues
    Trust Fund Account
  38. A broker must place all funds received on behalf of principals in _____, _____, or _____ within ____ business days following receipt by the broker or salesperson
    • Trust account
    • Neutral escrow depository
    • Hands of principal entitled to them
    • 3
  39. When may a broker not place funds in a trust account?
    If there are written instructions from a buyer to hold a check unwashed until acceptance or rejection of offer
  40. A broker may not have more than $_____ of his own money in a trust account
  41. Any employee who is authorized by a broker may make ____ from the trust account. If unlicensed, must be ______ in the amount of whatever he has access to
    • Withdrawals
    • Fidelity Bonded
  42. A broker must balance (reconcile) his trust fund account on a ____ basis. The account balance should match that of the ______
    • Monthly
    • Broker's client liabilities
  43. Trust fund accounts of brokers must be in the name which appears on ______
    The broker's license
  44. A salesperson may use his or her license only when ________
    The license is being held by a licensed real estate broker
  45. Under CA Real Estate Law, a salesperson is considered to be _______ of a broker
    An employee
  46. Most real estate salespersons are considered to be ________ for income tax and social security tax purposes. Brokers report a salesperson's income as such to the IRS with a ______ form
    • Independent contractors
    • 1099
  47. A salesperson may receive compensation for real estate acts from _______ only
    His employing broker
  48. It would be illegal for a salesperson working for a real estate broker to receive a referral fee from a _______ (4)
    • Lender
    • Loan broker
    • Developer
    • Seller
  49. When you pass the salesperson exam, you have _____ from the date of the exam to apply for the license
    1 year
  50. A portion of the real estate license fees are put into a client _____ to portent the general public when they obtain ______ court judgments or arbitration awards against licensees
    • Recovery Account
    • Uncollectible
  51. REERA stands for
    Real Estate Education, Research, and Recovery Account
  52. Funds given out from the RE Recovery account are limited to _____ per transaction, and _____ maximum per licensee
    • $50,000
    • $250,000
  53. When funds are taken from the RE Recovery account, the licensee's license is ____ until _______
    • Suspended
    • The recovery funds are repaid, plus interest
  54. A real estate applicant who appears on the state's list of child support obligors may be issued a _________, and a real license cannot be issued until _____
    • 150 day temporary license
    • A release is obtained from the DA's office during the 150 days
  55. After obtaining a real estate license, both brokers and salespersons are required to renew their licenses every _______, and are required to complete courses covering ______ (5 topics, "AFTER")
    • 4 years
    • Agency
    • Fair housing
    • Trust fund handling
    • Ethics
    • Risk Management
  56. License renewal courses require ____ hours of education, ____ of which must be consumer protection courses
    • 45
    • 18
  57. Licensees must renew their licenses within a ____ grace period if they wish to avoid taking the exam again
    2 years
  58. In an ad offering "Mega Buck" trust deeds for sale, disclosing a specific yield is legal if the _______ specified in the note and the _____ from the outstanding loan balance are disclosed
    • Actual interest
    • Discount
  59. Licensees may advertise "secured trust deeds" as long as they disclose ______
    To what extent the deeds are secured
  60. Advertising that does not disclose that an agent is representing a seller
    Blind advertising
  61. An ad placed in the newspaper by a real estate salesperson must also include ______
    The name of the broker
  62. Ads like "Move right in!" when referring to a house that is in disrepair is an example of ______
    Deceptive advertising
  63. A misleading map in an ad for a subdivision is considered _____________
    False advertising
  64. Occurs when a broker exaggerates features of a property by giving his opinion about something in an ad
  65. Puffing is only misrepresentation if _____
    Someone relies on it as fact
  66. A set of values by which individuals guide their own behavior and relationship to others
  67. An agent's relationship with customers, other agents, and the general public
  68. The unethical practice by a real estate licensee of withholding a new listing from the MLS until he has had time to find a buyer himself
    Pocket listing
  69. Options, net listings, and guaranteed sales are allowed in CA as long as the person involved in the transaction knows _______
    • The licensee's involvement
    • The legal effect of such an agreement
  70. Violations of the real estate law, by a licensee or non-licensee, can result in _____ (3)
    • $20,000 fine
    • Six months in jail
    • Loss of the real estate license
  71. When the Real Estate Commissioner believes a licensee has violated real estate law and has decided to take action against him, the Commissioner must first serve the licensee with ______
    An accusation
  72. Failure to disclose material facts, or simply lying
  73. The most common types of misrepresentation are _____ (3)
    • Innocent
    • Negligent
    • Fraudulent
  74. A false statement about what the promisor is going to do, and considered actual fraud
    False Promise
  75. Acting as an agent for more than one party in a  real estate transaction without the knowledge and consent of both parties--this will result in no commission!
    Undisclosed dual agency
  76. When an agent mixes a client's money with his own money, rather than depositing client's money into a trust account. Violates the Business and Professions Code, and is grounds for suspension or revocation of a license
  77. Stealing a client's money
  78. Illegal referral fees paid to real estate licensees by escrow, pest control, title, and home warranty companies
  79. When a broker wants to charge fees PRIOR to providing services, the advance fee contracts and ad materials must be submitted to the RE Commissioner for approval at least ______ before they are used
    10 days
  80. Advance fees must be kept ____ until used
    In the broker's trust account
  81. When a broker receives an advance fee for publishing a special pamphlet advertising properties he has not listed for sale, he must give _______, upon demand, for any funds he has collected for the advertising
    Accounting to the seller
  82. An advance fee contract used in real estate transaction must include: (3)
    • Description of services
    • Total amount charged to client
    • Date fee is to be paid
  83. An advance fee contract may NOT include ______
    A guarantee that the transaction will be completed
  84. Any broker who negotiates a loan or the sale of real property involving a trust deed must have the trust deed recorded _________
    BEFORE the funds are released from escrow
  85. If, in a trust deed sale, a lender gives written authorization for the release of funds before the trust deed is recorded, the broker must give the lender a written recommendation to record within ______
    10 days
  86. Any broker who services a loan by collecting payments must be authorized by __________ in ______
    • The lender
    • Writing
  87. A broker may retain the payments he collects for a loan in his trust account for no more than _______ without written authorization for the lender
    25 days
  88. One of a series of notes that is less than three years old and is secured by liens on parcels in a subdivision.
    Promotional Note
  89. After ______, a promotional note ceases to be promotional is no longer regulated as a real property security
    3 years
  90. Property managers usually receive ______ plus _______ over the term of the lease
    • Flat fee
    • A percentage of the gross income
  91. The amount of a property manager's compensation is set by ________ between ______ and _____
    • Mutual agreement
    • The owner
    • The property manager
  92. The most essential document needed to establish the relationship between a property management company and the property owner
    Written Property Management Agreement
  93. ______ has the ultimate responsibility for periodic inspections and maintenance of rental property
    The owner
  94. When leasing industrial space, the owner and/or property manager is required to make sure the property complies with _________
    All applicable building codes
  95. A national organization of individual property managers who have met exacting educational and experience requirements
    Institute of Real Estate Management (IREM)
  96. A member of the Institute of Real Estate Management is designated as a "_______"
    Certified Property Manager (CPM)
  97. 4 steps to converting a mobile home into real property
    • 1) Obtain building permit
    • 2) Attach mobile home to approved foundation
    • 3) Record document reflecting that home has been affixed
    • 4) Obtain certificate of occupancy
  98. A real estate license does not allow an agent to sell _____ Mobile homes, but he may handle the sale of _____ mobile homes, which happens when the mobile home has been ______ and ______
    • New 
    • Used
    • Sold to a buyer
    • Registered with the Dept of Housing & Community Development
  99. A real estate licensee must withdraw any advertisement of a mobile home for sale/lease/exchange within ______ of his receipt of notice that the mobile home is no longer available
    48 hours
  100. The document used to transfer and/or encumber a registered mobile home when it is NOT attached to a permanent foundation
    Certificate of Title (Certificate of Ownership)
  101. When a real estate broker sells a registered mobile home, the broker must give written notice of the transfer to the ______ no later than ______ after the sale
    • Dept of Housing & Community Development
    • 10 calendar days
  102. A real estate licensee may sell a mobile home once _______
    It has been registered
  103. Personal property involving the sale or lease of both the inventory and good will of an existing business enterprise or opportunity
    Business Opportunity
  104. Business opportunities are classified as ______, and the document used to transfer title is _____
    • Personal property
    • Bill of sale
  105. When purchasing a business, the buyer (transferee) should request a _______ from the _________ during escrow
    • Certificate of Clearance
    • State Board of Equalization
  106. A certificate of clearance in a business purchase is a __________, protecting the ______ from successor's liability for unpaid taxes
    • Receipt proving the seller has remitted the sales tax
    • Buyer
  107. The buyer of a franchise is buying the right to ________
    Conduct business under the seller's (franchisor's) marketing plan
  108. Law designed primarily to protect prospective franchisees when considering the purchase of a franchise
    Franchise Investment Law
  109. Franchisors would normally raise money from _____ (3)
    • Loans
    • Stock sales
    • Franchise fees
  110. Escrow must be used in the sale of a business that includes a ________
    Liquor license
  111. The US Supreme Court case decided in _____ upheld anti-discrimination laws on the basis of the ______ Amendment to the Constitution
    • 1968
    • Thirteenth
  112. The Thirteenth Amendment is the basis of _____ throughout the United State
    Fair Housing laws
  113. Law that prohibits discrimination in housing transactions
    Title VIII of the Civil Rights Act of 1968
  114. Title VIII of the Civil Rights Act of 1968 is also known as _________ or ________
    • Federal Fair Housing Act
    • Federal Open Housing Law
  115. Complaints of discrimination according to the Fed Fair Housing Act must be filed with the ________ within _____ of the discrimination
    • Dept of Housing and Urban Development (HUD_
    • 1 year
  116. The Civil Rights Act of 1968 allows victims of housing discrimination to enforce their rights by bringing a civil action in _____, _____, or a complaint filed with ________
    • Federal court
    • State/local court
    • HUD
  117. The Federal Fair Housing Act is enforced by _______ when a conspiracy exists to resist the law
    The US Attorney General
  118. CA State law that prohibits discrimination in supplying housing accommodations based on race, color, religion, sex, marital status, national origin, ancestry, age, familial status, or disability
    Fair Employment and Housing Act
  119. Another name for the (California) Fair Employment and Housing Act is ________
    Rumford Act
  120. "Housing Accommodations," as described in the Fair Housing and Employment Act, refer to property consisting of ________ dwelling units
    Not more than 4
  121. State agency created under the Fair Housing and Employment Act, responsible for enforcing fair housing laws on the state level
    Dept of Fair Employment and Housing
  122. Victims of discrimination according to the Fair Housing & Employment  Act have _____ to file a complaint
    1 year
  123. If the Fair Employment and Housing Act is violated: (4)
    • 1) The owner must complete the sale/rental
    • 2) The complainant is entitled to the next available unit
    • 3) Owner may be held liable for civil damages
    • 4) Owner may be liable for up to $1000 in punitive damages
  124. The Fair Employment and Housing Act does NOT apply to ______
    Renting or leasing to a boarder in a single-family house
  125. California state law that makes discrimination in lending practices illegal
    Housing Financial Discrimination Act
  126. The Housing Financial Discrimination Act is also called ________
    The Holden Act
  127. The Housing Financial Discrimination Act prohibits ________ and _______
    • Redlining
    • Lending institutions from charging an extra annual fee on loans to non-English speaking borrowers
  128. Charging higher interest rates or not lending in certain neighborhoods based upon suspect characteristics, such as race, age, national origin
  129. A California state law prohibiting discrimination by businesses
    Unruh Civil Rights Act
  130. Showing minority buyers homes that are only in segregated areas, and thus violates fair housing laws
  131. The race, color, sex, national origin, or religion, of a buyer or tenant is not ________ and should not be disclosed by an agent to his principal, even if asked
    A material fact
  132. It is a violation of fair housing law for a landlord to discriminate against ______ tenants, or even to make any written or oral inquiry concerning the _________ of a prospective tenant
    • Single
    • Marital status
  133. Quoting ______ to minorities cause both a seller and his agent to be ____________
    • Incorrect prices
    • Liable for damages in a lawsuit
  134. Discrimination in housing transactions based upon race, religion, color, marital status, national origin or sex, or the buyer/seller/etc., is considered ________ under the fair housing laws (3)
    • Unenforceable
    • Contrary to public policy
    • Illegal
  135. A racial deed restriction is _______ and _______, but the sale is _____. Racial deed restrictions may be removed by ________
    • Unconstitutional
    • Unenforceable
    • Valid
    • Court order
  136. Occurs when agents attempt to persuade neighbors to sell by telling them that members of another ethnic group are moving into the neighborhood
    Panic Selling
  137. Other names for Panic Selling
    • Panic Peddling
    • Blockbusting
  138. Panic selling is a violation of ______________
    Both state and federal law
  139. A buyer of a home is _________ of discrimination when the seller and real estate agent conspired to discriminate by refusing to sell to a minority buyer
    NOT guilty
  140. A real estate broker is subject to discipline by the RE Commissioner, in violation of fair housing laws, if he __________ (2)
    • Practices panic selling or steering
    • Hires salespersons from only one ethnic group
  141. An agent is not guilty of discrimination if she refuses to show a home to a minority buyer ONLY WHEN _____
    The seller is away and has requested no showings period
  142. The law which requires equal access to public buildings for handicapped persons
    Americans with Disabilities Act (ADA)
  143. Program of the HUD that is intended to make affordable housing available to very low-income individuals/families, senior citizens, and persons with disabilities by providing rent subsidies to private landlords
    Section 8 Program
  144. A seller must provide a buyer with a _______, which discloses the condition of the property (after seller makes a reasonable inspection of the property). Includes both condition of improvements and condition of the land
    Transfer Disclosure Statement (TDS)
  145. A seller must give a TDS to the buyer of _____ residential units, even when selling the property "______," or when an owner sells his home as a "______"
    • 4 or less
    • As is
    • For sale by owner
  146. A Transfer Disclosure Statement is NOT required for: (6)
    • Husband-wife transfers
    • Probate sales
    • Foreclosure sales
    • Bankruptcies
    • REO's
    • When one co-owner sells to another co-owner
  147. If a seller refuses to fill out the TDS truthfully at the time of the listing, the agent should _____
    Not take the listing
  148. In addition to the seller filling out the TDS, the agents involved in a transaction must _______
    Also do visual inspections of the property and add anything else they see
  149. _______ is responsible for delivering the TDS to the buyer, and it should be delivered ____
    • The broker who procured the offer
    • As soon as practicable before transfer of title
  150. A buyer has _____ to sue a real estate licensee for failure to disclose known defects in the TDS
    2 years
  151. If the TDS or amended TDS is delivered after the execution of an offer, the buyer has _____ after delivery in person, or _____ if by mail, to terminate the offer in writing
    • 3 days
    • 5 days
  152. A TDS must include _____ of which the seller is aware, including radon, lead-based paint, asbestos, etc.
    Environmental hazards
  153. If either the seller or seller's agent gives a buyer the "Environmental Hazards" pamphlet, neither the seller nor the agent has to ______
    Say anything else about environmental hazards, assuming no awareness of such a problem
  154. A California court decision which led to the creation of the Transfer Disclosure Law
    Easton v. Strassburger
  155. Statement that must be given to a buyer who is entitled to the TSD. The seller must also make these disclosures when selling any property in flood zones, earthquake fault zones, etc.
    Natural Hazard Zone Disclosure Statement
  156. The Natural Hazard Zone Disclosure Statement must be made when selling any property in the following areas: (6)
    • Special Flood Hazard Area
    • Area of Potential Flooding
    • Very high fire hazard severity zone
    • Wildland area
    • Earthquake fault zone
    • Seismic hazard zone
  157. An area in which an earthquake may cause strong ground shaking, soil liquefaction, or landslides
    Seismic Hazard Zone
  158. Natural hazard area that contains substantial forest fire risks and hazards
    Wildland Area
  159. An area shown on a map that would be inundated if a dam failed
    Area of potential flooding
  160. In regards to the Natural Hazard Zones, there is no such thing as a "_______" Zone
    Severe Weather Hazard
  161. The Homeowner's Guide to Earthquake Safety must be given to the buyer of any real property improved with a residential dwelling built prior to ______, and consisting of ___ units, any of which are of ___________ construction
    • January 1, 1960
    • 1-4
    • Conventional, light-frame
  162. The Commercial Property Owner's Guide to Earthquake Safety must be given to the buyer of any masonry building with ____ frame floors or roofs built before ______. This guide is also given to ____ property buyers
    • Wood
    • January 1, 1975
    • Residential
  163. Guides that include maps and information on geologic and seismic hazard conditions for all areas of the state, explanations of the related structural and nonstructural hazards, and recommendations for mitigating the hazards of an earthquake
    Earthquake Safety Guides
  164. Exemptions for the obligation to deliver the Earthquake Safety Guides are very similar to the exemptions of the _______
  165. If a buyer receives a copy of the Homeowner's Guide to Earthquake Safety, neither the seller nor the broker are obligated to _______, the one exception being that they both must disclose that a property is ________
    • Provide additional info regarding geologic/seismic hazards
    • In an earthquake fault zone
  166. The buyer of housing built prior to 1978 must be given a ________ prior to entering into a contract to purchase the home, otherwise the buyer has the right to _____, and the seller/agent who violates this may be subject to _____ penalties
    • Lead-based Paint Disclosure
    • Cancel the contract
    • Civil and/or criminal
  167. Refers to housing built prior to 1978 that must be accompanied with a lead-based paint disclosure
    Target Housing
  168. Target housing does NOT include pre-1978 housing which is designated for ________, unless ______ reside there
    • The elderly or handicapped
    • Children