Real estate Rhode Island Law UPDATED
Exam Questions and CORRECT Answers
Real estate recovery act - Correct 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 - Correct 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? - Correct 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? - Correct Answer- 1000
Errors and omissions insurance - Correct 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 - Correct 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
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
Exam Questions and CORRECT Answers
Real estate recovery act - Correct 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 - Correct 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? - Correct 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? - Correct Answer- 1000
Errors and omissions insurance - Correct 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 - Correct 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
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
