Unit 26: Virginia Brokerage Regulation
& Disclosures Exam Questions &
Answers
independent contractor vs. employee - ANSWER-licensees are either employees or
independent contractors based on the characteristics of the job they perform
Employment agreement - ANSWER-employment agreements include the type of
relationship between the broker and the licensee
Compensation - ANSWER-based on employment relationship and agreement;
salespersons and associate brokers may accept compensation only from the
supervising broker
Broker's supervisory requirements - ANSWER-include broker's availability to
licensees, providing training and written procedures, monitoring licensure and
activities, maintaining records, reporting to REB, no disciplinary action against
brokers for licensee violations if unknown to broker
death or disability of principal broker - ANSWER-firm can appoint individual to
complete broker's business within 180 days of death or disability; must select from
designated list of individuals
escrow account requirements - ANSWER-● escrow accounts used for rents and
deposits and purchase transactions
● maintained to hold funds belonging to others until transaction closes or cancels;
broker is responsible for accounts and must have signatory authority; funds to be
identified as to source and labeled "escrow," interest to be disbursed according to
contract; interest-bearing not required; interest allowed with disclosure
● broker must comply with proper maintenance of escrow funds; if broker fails, the
REB can file a petition with the court to protect the funds
deposits - ANSWER-lease transactions; deposit funds by end of 5th business day
withdrawals and disbursements - ANSWER-● no licensee withdrawal until closing
except by written agreement
● no disbursement unless funds sufficient
● if transaction fails to close, funds are to be disbursed based on agreement of
principals, court order, interpleader, or terms of contract
protection of escrow - ANSWER-REB may freeze broker escrow activity; court may
appoint receiver, charge broker for expenses
misuse of funds - ANSWER-illegal: commingling personal funds with others' funds
illegal; converting escrow funds for broker's own purposes
& Disclosures Exam Questions &
Answers
independent contractor vs. employee - ANSWER-licensees are either employees or
independent contractors based on the characteristics of the job they perform
Employment agreement - ANSWER-employment agreements include the type of
relationship between the broker and the licensee
Compensation - ANSWER-based on employment relationship and agreement;
salespersons and associate brokers may accept compensation only from the
supervising broker
Broker's supervisory requirements - ANSWER-include broker's availability to
licensees, providing training and written procedures, monitoring licensure and
activities, maintaining records, reporting to REB, no disciplinary action against
brokers for licensee violations if unknown to broker
death or disability of principal broker - ANSWER-firm can appoint individual to
complete broker's business within 180 days of death or disability; must select from
designated list of individuals
escrow account requirements - ANSWER-● escrow accounts used for rents and
deposits and purchase transactions
● maintained to hold funds belonging to others until transaction closes or cancels;
broker is responsible for accounts and must have signatory authority; funds to be
identified as to source and labeled "escrow," interest to be disbursed according to
contract; interest-bearing not required; interest allowed with disclosure
● broker must comply with proper maintenance of escrow funds; if broker fails, the
REB can file a petition with the court to protect the funds
deposits - ANSWER-lease transactions; deposit funds by end of 5th business day
withdrawals and disbursements - ANSWER-● no licensee withdrawal until closing
except by written agreement
● no disbursement unless funds sufficient
● if transaction fails to close, funds are to be disbursed based on agreement of
principals, court order, interpleader, or terms of contract
protection of escrow - ANSWER-REB may freeze broker escrow activity; court may
appoint receiver, charge broker for expenses
misuse of funds - ANSWER-illegal: commingling personal funds with others' funds
illegal; converting escrow funds for broker's own purposes
