REAL ESTATE LAW COMPREHENSIVE STUDY
GUIDE FULLY SOLVED EDITION WITH TESTED
QUESTIONS AND CORRECT ANSWERS
‣ Real estate recovery act . Answer: Dept of business regulation
establishes this account
Covers anyone aggrieved by an act, misrepresentation, transaction or
conduct of a licensed real estate broker upon the grounds of fraud,
misrepresentation or deceit may recover no more than 50000 per one
license
Can't be used to reimburse any broker or salesperson
Agents pay a fee for the deposit in the real estate recovery fund when
they first get their license
Dec 31 of any year if the recovery fund is less than 200000 agents pay a
fee of $25 when renewing their license
Agents/ brokers must pay back the recovery fund plus 12% a year
‣ Real estate commission . Answer: 9 people at least one from each
county
,Citizen of the state for at least 10 years
3 current licensed brokers who have been brokers for at least 5 years in
the state
4 have to be members of the general public
‣ Who is exempt from licensing? . Answer: 1. Any person, partnership,
association, corporations or any of their employees who want to acquire,
lease, sell of deal in real estate that will be held for investment
1. Same as above just any owner, lessee, or lessor
‣ If you violate the rules and regulations how much money can the
director levy an administrative penalty? . Answer: 1000
‣ Errors and omissions insurance . Answer: In order to have a license
you must have and maintain errors and omissions insurance covering all
business activities
Must obtain the insurance independently
Dept of business regulation determine the terms and condition of
coverage
,Certificate of coverage must be filed with the dept of business regulation
by the annual license renewal date
Min requirements for E&O Insurance:
Individual licensee- insurance needs to be at least 50,000 and 150,000
aggregate
For brokers blanket policy:
The minimum coverage needs to be at least 50,000 x amount of
salespersons and 150000 x Amount of salespersons
Brokers blanket policy needs to be in total of 300000 and 1 million
dollars in one case at any time
‣ How to lose your license . Answer: Misrepresentation
Fraud
False promise
Misleading advertising
Failing to deposit money into escrow
Failing to keep 3 years of records
Acting as a dual facilitator without consent
Placing for sale sign without consent
Failing to show a copy of records
, Not writing a termination date of contract
Inducing someone to break contract so they can use me as a salesperson
Accepting money for a referral
Not disclosing intentions to a client
Convicted of criminal felony
Violating rules/regulations
Broker not overseeing salesperson
Refusing to provide info
Soliciting real property
Paying or accepting money for referral
Failing to have listing agreements in writing
No net listing
Negotiating a property when someone is already in contract with another
agent
Accepting an agency and failing to make an effort to sell property
Advising against use of an attorney
Representing lenders/party interest of property's a false sales contract
Commingling escrow money
Advertising property of another in a manner is being made by a party not
engaged in real estate business
Can't advertise the property under anyone else's name but mine
No advertisements in publications containing only address, phone
number
Have to hand over all records to broker
GUIDE FULLY SOLVED EDITION WITH TESTED
QUESTIONS AND CORRECT ANSWERS
‣ Real estate recovery act . Answer: Dept of business regulation
establishes this account
Covers anyone aggrieved by an act, misrepresentation, transaction or
conduct of a licensed real estate broker upon the grounds of fraud,
misrepresentation or deceit may recover no more than 50000 per one
license
Can't be used to reimburse any broker or salesperson
Agents pay a fee for the deposit in the real estate recovery fund when
they first get their license
Dec 31 of any year if the recovery fund is less than 200000 agents pay a
fee of $25 when renewing their license
Agents/ brokers must pay back the recovery fund plus 12% a year
‣ Real estate commission . Answer: 9 people at least one from each
county
,Citizen of the state for at least 10 years
3 current licensed brokers who have been brokers for at least 5 years in
the state
4 have to be members of the general public
‣ Who is exempt from licensing? . Answer: 1. Any person, partnership,
association, corporations or any of their employees who want to acquire,
lease, sell of deal in real estate that will be held for investment
1. Same as above just any owner, lessee, or lessor
‣ If you violate the rules and regulations how much money can the
director levy an administrative penalty? . Answer: 1000
‣ Errors and omissions insurance . Answer: In order to have a license
you must have and maintain errors and omissions insurance covering all
business activities
Must obtain the insurance independently
Dept of business regulation determine the terms and condition of
coverage
,Certificate of coverage must be filed with the dept of business regulation
by the annual license renewal date
Min requirements for E&O Insurance:
Individual licensee- insurance needs to be at least 50,000 and 150,000
aggregate
For brokers blanket policy:
The minimum coverage needs to be at least 50,000 x amount of
salespersons and 150000 x Amount of salespersons
Brokers blanket policy needs to be in total of 300000 and 1 million
dollars in one case at any time
‣ How to lose your license . Answer: Misrepresentation
Fraud
False promise
Misleading advertising
Failing to deposit money into escrow
Failing to keep 3 years of records
Acting as a dual facilitator without consent
Placing for sale sign without consent
Failing to show a copy of records
, Not writing a termination date of contract
Inducing someone to break contract so they can use me as a salesperson
Accepting money for a referral
Not disclosing intentions to a client
Convicted of criminal felony
Violating rules/regulations
Broker not overseeing salesperson
Refusing to provide info
Soliciting real property
Paying or accepting money for referral
Failing to have listing agreements in writing
No net listing
Negotiating a property when someone is already in contract with another
agent
Accepting an agency and failing to make an effort to sell property
Advising against use of an attorney
Representing lenders/party interest of property's a false sales contract
Commingling escrow money
Advertising property of another in a manner is being made by a party not
engaged in real estate business
Can't advertise the property under anyone else's name but mine
No advertisements in publications containing only address, phone
number
Have to hand over all records to broker
