NY REAL ESTATE EXAM STUDY GUIDE
QUESTIONS AND ANSWERS
1. Independent contractor must pay their own expenses.
ANS According to IRS code section 3508[A, B],
real estate agents are statutory non-employees and are therefore independent contractors.
The code also states that there must be a written contract between the broker and the sales associate, also
reviewed every 12-15 months
·All records must be kept for 3 years
·If sales associate not deemed independent then they will not be able to file "SCHEDULE C' of the federal
return
·The Independent Contractor Relationship
Ø Salespersons are free to engage in outside
employment Ø Either party may terminate the
relationship at any time
2. License Law & Regulations
ANS The New York Department of State, Division of licensing Services is the
regulatory agency that oversees and administers the licensure process.
1/
40
,Most of the law pertaining to salespersons and brokers is contained in Article 12-A of the real property law.
3. A real estate broker
ANS is any person, partnership, association or corporation who, for another, and for
compensation of any kind, negotiates any form of real estate transaction.
Real estate brokers supervise and are responsible for the activities of associate brokers and salespersons in
their employ.
4. A salesperson or an associate broker
ANS cannot operate independently. Although licensed, they must work under a licensed
Real Estate Broker
5. Duties That Require Licensure
ANS * Selling or purchasing real estate at an auction
*Negotiating the sale of a business for which the values of the real estate transferred is not merely
incidental to the transaction (RE value is worth more than the business
*Salespersons must be 18 years of age.
*Brokers must be 20 years old with 2 years experience
*Points for Broker License work as salesperson & 3500 points or 3 years and 5250 points.
*Licenses are renewed every two{2} years
2/
40
,6. Exemptions to Licensure
ANS Building superintendents or maintenance workers who perform tasks such as rent
collecting for one owner, company or entity.
7. Classes of Licensure for Brokers
ANS Ø Each officer of a corporation or member of a co-partnership must be licensed as a
broker.
Ø Salespersons licenses are not issued to officers of corporations or members of co-partnerships.
Ø Salespersons and associate brokers may not be principals in the brokerage firm and may not own
voting stock in the licensed brokerage corporation.
8. License and Pocket Card
ANS Ø Pocket Cards must be carried at all times and shown on demand.
·Fees, Office Requirements, and Terms of Licensure
Ø Brokers must pay $150.00 and Salespersons $50.00 for
each term. Ø Additional licenses for each branch office cost
$150.00.
9. An apartment-sharing agent
ANS is an individual who, for a fee, arranges and coordinates meetings
between the current owners of real property, including apartment housing who wish to share their housing
with others.
3/
40
, 10. A mortgage banker
ANS is an individual or entity licensed by the New York Banking Department to engage in the
business of making residential mortgage loans. Licensed and lends.
11. Compensation and Fee Splitting
ANS Ø Salespersons may not accept compensation except from their sponsoring brokers
Ø If brokers improperly pay any part of compensation to anyone who is not licensed or who is not exempt
from the license law, they are in violation of the license law,
this payment is called a kickback.
12. Lawsuits for Commissions
ANS An unlicensed person, co-partnership or corporation cannot bring about a lawsuit to
collect compensation for real estate services rendered because-
only a licensed real estate broker or salesperson is entitled to a judgment by the courts.
13. Violations of Real Estate License Law
ANS Ø Failing to provide adequate disclosure regarding any or all of the following
a) if licensees purchase property listed by their firm, they must make their position clear to the seller,
b) the licensee must make clear their position regarding the party for whom they are acting in a
4/
40
QUESTIONS AND ANSWERS
1. Independent contractor must pay their own expenses.
ANS According to IRS code section 3508[A, B],
real estate agents are statutory non-employees and are therefore independent contractors.
The code also states that there must be a written contract between the broker and the sales associate, also
reviewed every 12-15 months
·All records must be kept for 3 years
·If sales associate not deemed independent then they will not be able to file "SCHEDULE C' of the federal
return
·The Independent Contractor Relationship
Ø Salespersons are free to engage in outside
employment Ø Either party may terminate the
relationship at any time
2. License Law & Regulations
ANS The New York Department of State, Division of licensing Services is the
regulatory agency that oversees and administers the licensure process.
1/
40
,Most of the law pertaining to salespersons and brokers is contained in Article 12-A of the real property law.
3. A real estate broker
ANS is any person, partnership, association or corporation who, for another, and for
compensation of any kind, negotiates any form of real estate transaction.
Real estate brokers supervise and are responsible for the activities of associate brokers and salespersons in
their employ.
4. A salesperson or an associate broker
ANS cannot operate independently. Although licensed, they must work under a licensed
Real Estate Broker
5. Duties That Require Licensure
ANS * Selling or purchasing real estate at an auction
*Negotiating the sale of a business for which the values of the real estate transferred is not merely
incidental to the transaction (RE value is worth more than the business
*Salespersons must be 18 years of age.
*Brokers must be 20 years old with 2 years experience
*Points for Broker License work as salesperson & 3500 points or 3 years and 5250 points.
*Licenses are renewed every two{2} years
2/
40
,6. Exemptions to Licensure
ANS Building superintendents or maintenance workers who perform tasks such as rent
collecting for one owner, company or entity.
7. Classes of Licensure for Brokers
ANS Ø Each officer of a corporation or member of a co-partnership must be licensed as a
broker.
Ø Salespersons licenses are not issued to officers of corporations or members of co-partnerships.
Ø Salespersons and associate brokers may not be principals in the brokerage firm and may not own
voting stock in the licensed brokerage corporation.
8. License and Pocket Card
ANS Ø Pocket Cards must be carried at all times and shown on demand.
·Fees, Office Requirements, and Terms of Licensure
Ø Brokers must pay $150.00 and Salespersons $50.00 for
each term. Ø Additional licenses for each branch office cost
$150.00.
9. An apartment-sharing agent
ANS is an individual who, for a fee, arranges and coordinates meetings
between the current owners of real property, including apartment housing who wish to share their housing
with others.
3/
40
, 10. A mortgage banker
ANS is an individual or entity licensed by the New York Banking Department to engage in the
business of making residential mortgage loans. Licensed and lends.
11. Compensation and Fee Splitting
ANS Ø Salespersons may not accept compensation except from their sponsoring brokers
Ø If brokers improperly pay any part of compensation to anyone who is not licensed or who is not exempt
from the license law, they are in violation of the license law,
this payment is called a kickback.
12. Lawsuits for Commissions
ANS An unlicensed person, co-partnership or corporation cannot bring about a lawsuit to
collect compensation for real estate services rendered because-
only a licensed real estate broker or salesperson is entitled to a judgment by the courts.
13. Violations of Real Estate License Law
ANS Ø Failing to provide adequate disclosure regarding any or all of the following
a) if licensees purchase property listed by their firm, they must make their position clear to the seller,
b) the licensee must make clear their position regarding the party for whom they are acting in a
4/
40
