Rhode Island General Real Estate Study Guide Questions with Complete Solution

Rhode Island General Real Estate Study Guide with Complete Solution Real estate recovery act ✔✔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, misreprese ntation 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 recove ry 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 ✔✔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? ✔✔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? ✔✔1000 Errors and omissions insurance ✔✔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 conditio n 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 brok ers 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 licen se ✔✔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 i s 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 Advertisi ng 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 Giving commission to someone who isn't a real estate licensee Soliciting the sale of a property because a specific race is in the neighborhood Broker needs to tell the director within 10 days that he or she is leaving the office The director can penalize up to 1000 for any of these violations t Escrow deposit rules ✔✔Must maintain an escrow account under principal broker Can not commingle deposit money Need to keep deposit/withdrawal records for 3 years Office/admin needs to keep a monthly report of escrow account May be applied to the commission when earned by the listing company If there is a dispute about the money in the escrow the broker needs to give the money to the general treasurer within 180 days until the dispute is over Escrow agents ✔✔Funds placed in escrow held by a person legally authorized to do so Ex: real estate broker or attorney Dual activities ✔✔Real estate transactions wh ere the broker holds more than one title Ex: builder, contractor, insurance agent Unlawful appropriation ✔✔Licensee to whom any money or property is entrusted as escrow funds who uses the money or property from his or herself by transferring money to a company or personal account