What 4 criteria must a broker's office have?
1. enclosed room in a stationary building
2. provides privacy for negotiations and closings
3. all books, records and files must be kept here
4. may be in a brokers' home as long as sign displayed properly
What are 2 requirements for branch office?
1. broker must register each branch - cannot be moved; is not transferrable
2. FREC can determine that something is a branch ffice
3 Requirements of a Sole Proprietor Sign
-must display official sign on exterior/interior of entrance and must be easily observed and read by anyone
1. trade name
2. broker's name
3. Licensed Real Estate Broker OR Lic. Real Estate Broker
3 Requirements of a Brokerage Corp. Sign
1. name of firm
2. name of at least 1 broker
3. Licensed Real Estate Broker OR Lic. Real Estate Broker
4 Requirements of Advertising
1. must be in name of brokerage and under supervision of broker
2. sales assoc. may not advertise in their own names
3. broker responsible for all advertising
no matter who prepares it
4. must be wired so that reasonable people will know dealing with a li
What are blind advertisements?
-advertisements that fail to disclose the license name of brokerage
What is needed to use nicknames on advertising?
-legal names registered with DBPR must also be included
What are 2 requirements for internet advertising?
1. name of brokerage must be adjacent to or above/below...
2. ...point of contact information
What is point of contact information?
-refers to any means by which to contact the brokerage firm
Florida Law vs. Federal Law for Telephone Solicitations (4 things)
In Florida...
1. No Solicitation Calls Registry
2. Calls restricted 8AM - 9PM
3. $10,000 fine
4. FSBO exception
Federal...
1. National Do Not Call Registry
2. Calls restricted 8AM - 9PM
3. $11,000 fine
4. No FSBO exception
What is the definition of telephone solicitation?
-initiation of a phone call for purposes to encourage purchase
What is TCPA?
-1991
-Telephone Consumer Protection Act
-federal law concerning telephone solicitation
What are 3 exempt calls from TCPA?
1. political solicitations
2. telephone surveys
3. charitable organizations
What are 4 requirements for sending unsolicited fax?
1. sender must have an established business relationship
2. sender must have recede fax # voluntarily
3. sender must clearly state on 1st page an opt out statement
4. sender must honor opt-outs within 30 days
6 Key Concepts Regarding Escrow accounts
1. broker may open an escrow account
2. broker must be signatory
3. broker myst review and sign monthly reconciliation statements
4. broker must review company's escrow accounting procedures
5. funds may be held by attorney or title co.
6. broker must mai
What is EMD?
-Earnest Money Deposit
What are 2 other names of EMD?
1. good faith deposits
2. binder deposits
What is an escrow account?
-an account for the deposit of money 1 disinterested 3rd party holds in trust for others
-includes cash, checks, money orders
What is timeline to deposit escrow funds?
-brokers must place trust funds into escrow account immediately
-no later than end of 3rd business day after associate receives it
-sales assoc. must turn it over by the end of the 1st day after receive it
5 Keys Reporting Deadlines Regarding Escrow Accounts
1. sales assoc. deliver escrow to broker by end of next business day
2. broker deposit by end of 3rd business day
3. brokers must notify FREC in writing of conflicting demands or good faith bout within 15 business days
4. brokers must institute one of the
3 step procedure that must be followed if escrow funds placed with title company or attorney
1. licensee who prepared the sale contract must indicate on the purchase and sale agreement the title co.'s name, address and phone #
2. no later than 10 business days after each deposit is due broker must request a written verification of receipt of depo
What are 4 choices of acceptable depositories for escrow funds?
1. interest-bearing --- as long as both parties have written agreement that states who gets interest
2. non-interest bearing
3. FL based title company
4. FL attorney
How much money can be kept to maintain the escrow account? 2 scenarios
1. broker can place $1,000 personal brokerage funds
2. $5000 for property management account
What is commingle?
-illegal practice of mixing a buyer's, seller's, tenant's or landlord's funds with brokers own money
What is conversion?
-unauthorized control or use of another's personal property
When do conflicting demands occur?
-when the buyer and seller make demands regarding the disbursing of escrowed property
When must broker notify FREC of conflicting demands?
-within 15 days of receiving conflicting demands
When must broker institute 1 of 4 settlement procedures for receiving conflicting demands?
within 30 days
What are the 4 settlement procedures?
1. mediation
2. arbitration
3. litigation
4. EDO
What is an EDO?
Escrow Disbursement Order
What is mediation?
-with written consent
-informal non-adversarial process intended to reach negotiated settlement
-non-binding
What if mediation does not work?
-within 90 days failing party's last demands licensee must employ 1 of the other 3
What is arbitration?
-binding agreement
-written consent prior
-matter submitted to disinterested 3rd party
Litigation
1. interpleader
2. declaratory judgment
What is interpleader procedure?
-if broker has no claim to escrow
-broker deposits funds with court registry
-broker then excused from case
What is declaratory judgment?
-broker who believes they are entitled to portion of funds
-judge declares each party's rights
Acronym for 4 settlement procedures
Mediation
Arbitration
Litigation
EDO
What are 3 exceptions to the notice and settlement procedures?
1. broker with EMD ... HUD
2. buyer of residential condo unit delivers timely notification to cancel a contract
3. buyer fails to satisfy terms
What is good faith?
-used to describe a party's honest interest to transact business, free from any intent to defraud the the other party
What is timeline when licensee has good faith doubt as to which party should receive the escrow?
-broker notifies FEC in writing within 15 business days and instates 1 of the settlement procedures within 30 days
what must a broker do with a commission or partial commission received BEFORE completing real estate service?
-must be placed into broker's escrow until service completed
Timeline and fees for rental lists issues
1. rental not obtained - 75% of fee within 30 days
2. info not correct - 100% within 30 days
What is possible criminal charge for selling list that is not correct?
-subject to a fine up to $1000 and imprisonment for 1 year
-subject to license suspension/revocation
-misdemeanor of 1st degree
What is purpose of antitrust laws?
-protect competition
What are 2 anti-trust laws?
1. Sherman Antitrust act
2. Clayton Antitrust Act
-violation is criminal offense
What is price-fixing?
-occurs when competing brokers conspire to establish a standard rate
What is market allocation?
-occurs when brokers agree to split up competitive market into areas and not complete in other's areas
What does a broker have to do for nonpayment on commission on residential property?
-required to take legal action to collect
Commercial Real Estate Sales Associate Commission Lien Act
-Chapter 475 Part III
-broker may place a lien against owner's net sales proceeds for unpaid commission on commercial property
What is Commercial Real Estate Leasing Commission Lien Act?
-gives a broker lien rights for earned commission assoc. with brokerage agreement to lease commercial real estate
How is commission paid?
-monies earned by sales assoc. must be paid to sales assoc. by their employer
-sales assoc. are compensated by splitting commission paid to their broker
-all commission listings are legal property of broker
What is kickback?
-unearned fee paid to a licensee associated with real estate for non real estate services
5 Important Facts about Kickbacks
1. prior to payment and receipt the buyer and seller must be fully informed of all facts
2. kickback must not violate RESPA
3. person receiving kickback must be licensed to if license is required to perform service
4. prohibits from sharing commission wit
Timeline for notifying DBPR of new employer
-DBPR must be notified within 10 days after the change
-sales assoc. may not perform real estate services until registers with new employer
5 business entities that may register as real estate broker
1. corporations
2. LLC
3. LLP
4. partnerships- general and limited
5. sole proprietorships
5 types of business that may NOT register as broker
1. corporation sole
2. cooperative association
3. unincorporated association
4. joint ventures
5. business trust
What is a sole proprietorship?
-business owned by 1 person
-are personally liable
What is a partnership ?
-a general partnership is an association of 2 or more persons for purpose of jointly conducting a business
What are 3 responsibilities and powers of each partner in a partnership?
1. each is responsible for all debts incurred in the business
2. each has power to bind
3. each is entitled to share profit in amount agreed by parties
How is a general partnership created?
-by a contract either in written, oral or implied from conduct of parties
4 Requirements for brokers forming general partnerships
1. partnership must register with DBPR under name
2. at least 1 partner must be licensed as active broker
3. partners who deal with public in real estate services must be licensed as brokers
4. sales assoc and broker assoc may not be general partners
What is a limited partnership?
-created by written instrument filed with FL Dept of State
-must be 1 or more general partners and 1 or more limited partners
-limited partners must make investment of cash, not services
What is a difference of liability of limited partners?
-limited partners liable only for their part of contribution
-not liable to creditors unless name is in partnership name
6 Requirements Regarding Real Estate Brokerage Limited Partnerships
1. must register with DBPR
2. general partners who practice real esate must be licensed
3. at least 1 partner must be licensed active broker
4. all other general partnes must be registered
5. sales assoc. and brokers assoc. may be limited partners
6. limi
What is ostensible partnership?
-not intentionally created
-conduct of 2 or more persons creates the appearance that partnerships exists
What does LLP stand for?
Limited Liability Partnership
What is LLP? 4 things
1. enjoy protection from personal liability
2. not liable for obligation
3. is liable for errors
4. must register as LLP
What is a corporation? 4 things
-an artificial person or legal entity created by law
-consists of 1 or more persons
-owners are the stockholders
-stockholders elect board of directors
What is a domestic corporation?
-incorporated in Florida and does business in Florida
What is a foreign corporation?
-organized under laws of another state but does business in Florida
7 Requirements for Real Estate Brokerage Corporations
1. must register with DBPR under corp. name
2. at least 1 officer/director must be licensed as active broker
3. registered, active and unlicensed people may serve as officers
4. all officers and directors must be registered with DBPR
5. inactive brokers a
Timeline for when only active broker of brokerage dies
-14 calendar days
What does LLC stand for?
Limited Liability Corporation
What are 4 aspects of LLC?
a form of business organization that offers best features of a corp. AND a partnership
-provides owner protection from personal liability
-IRC treats LLC as partnership
-income taxed only once
What is corporation sole?
-ecclesiastical or church organization and NOT corp. for profit
-cannot be registered as broker
What is join venture?
-temporary form of business arrangement
What is a business trust?
-a form of business entity may be created to engage in transaction involving its own real property
what is a read name?
- a business name other than the legal name of person doing business