Term
| Business Opportunity Brokerage |
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Definition
| Involves the sale or lease of an existing business, including the sale of tangible and intangible assets. If property is an asset, a Broker's license is required. |
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Term
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Definition
| Affects how land can be used and establish criteria such as minimum acquare footage, and so forth, to ensure that homes built in that subdivision are designed to protect and maintain the value and integrity of the neighborhood. |
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Term
Uniform Standards of Professional Appraisal Practice
(USPAP) |
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Definition
| A set of standards of practice to follow when providing appraisal services. |
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Term
Equal Credit Opportunity Act
(ECOA) |
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Definition
| States that individuals cannot be discriminated upon via factors that are not directly related to their creditworthiness. It prohibits creditors and lenders from considering a consumer’s race, color, national origin, sex, religion or marital status in deciding whether to approve their loan or credit application. Financial institutions also cannot deny credit based on age, as long as the applicant is of legal age and has the mental capacity to enter into a contract, nor can they deny credit because the applicant is receiving public assistance. |
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Term
Truth in Lending Act
(TILA) |
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Definition
| United States Federal Law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. |
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Term
| Categories of Residential Construction |
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Definition
Speculative - Purchasing one or more lots and constructing a home (or homes) without a buyer in advance of construction
Custom Homes - A custom builder constructs homes under contract with a buyer, often using building plans provided by an architect or the buyer.
Tract Homes - Buyers select a floor plan and a lot in a new subdivision |
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Term
Real Estate Settlement Procedures Act
(RESPA) |
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Definition
| Created to deter companies associated with buying and selling of real estate from engaging in providing undisclosed kickbacks to each other, inflating the cost of real estate transactions and obscuring price competition by facilitating bait-and-switch tactics. |
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Term
Florida Real Estate Appraisal Board
(FREAB) |
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Definition
| Regulates State-Certified, Licensed, and registered trainee appraisers. |
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Term
| The Major Real Estate Sales Specialities |
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Definition
1. Residential
2. Commercial
3. Industrial
4. Agricultural
5. Business |
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Term
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Definition
| A selected geographic area or a group of people from which to solicit real estate business and to which a real estate licensee devotes special attention and study. |
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Term
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Definition
| Local representative of an absentee owner. Responsible for maintenance and managing expenses. Protects owners investment and maximizes return. |
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Term
Multiple Listing Service
(MLS) |
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Definition
| A data base that allows real estate brokers representing sellers under a listing contract to share information about properties with real estate brokers who represent potential buyers. |
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Term
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Definition
| Continued correspondence with buyers and sellers following closing. |
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Term
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Definition
| Real Estate professionals who are members of a local board (or association) of Realtors and are affiliated with the Florida Realtors and NAR. |
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Term
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Definition
| Defined in Florida License Law 475, F.S. to mean 4 or fewer residential units, vacant land zoned for 4 or fewer residential units, or agricultural property less than 10 acres. |
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Term
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Definition
| Real Estate professionals who provide advice to individuals and firms regarding the purchase and use of real estate investments. Involves analyzing existing or potential problems and recommending a course of action. |
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Term
| Steps of the Real Estate Sale Process |
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Definition
1. Prospect for Sellers, and list Properties and Businesses
2. Market listing and prospect for buyers
3. Buyer Qualification
4. Offer, Negotiation Process & Signed Sale Contract
5. Loan Application & RESPA disclosures
6. Post-Contract Activities
7. Loan Approval & Title Search
8. Title Closing
9. Deed & Mortgage are Recorded
10. Follow-Up |
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Term
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Definition
| The industry or occupation whose activities involve real property transactions handled by licensed real estate professionals. |
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Term
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Definition
| Produces less money than is owed the lender; the lender releases it's mortgage so that the property can be sold free and clear to the new purchaser. |
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Term
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Definition
| A plan of a tract of subdivided land that is submitted by the developer to the government planning agency showing the size and location of individual lots, planned amenities, streets, and utilities. |
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Term
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Definition
| Real Estate activity devoted to leasing, managing, marketing, and overall maintenance of property for others. |
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Term
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Definition
| The process of estimating the value of real property; a supported, defended estimate of the value of real property as of a specific date. |
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Term
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Definition
| Owners who do not reside on the property and who usually rely on a property manager to supervise the real estate. |
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Term
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Definition
| Defined in Florida License Law to mean agricultural property of more than 10 acres. |
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Term
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Definition
| A person who, for a fee, acts as an intermediary between a person seeking to lease a housing accommodation and a property owner seeking to acquire a lease for a housing accommodation. Paid on a transactional basis. |
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Term
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Definition
| The gift of land by an owner to a government body for public use. |
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Term
Broker's Price Option
(BPO) |
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Definition
| A written opinion of the value of the real property. Is neither an appraisal or a comparative market analysis. |
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Term
Comparative Market Analysis
(CMA) |
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Definition
| A marketing tool that may not be referred to or represented as an appraisal; are developed by reviewing the real estate activity in the area, including recent sales of similar properties, properties currently offered for sale, and recently expired listings to indicate what a subject property might be worth based on current market activity. |
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Term
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Definition
| Real Estate licensees who engage in the sale, purchase or lease of Business. |
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Term
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Definition
| Private agreements that restrict the use of the real estate in some way, and are listed in the deed. |
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Term
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Definition
| The Profession in which Real Estate Brokers provide specialized services for others in return for compensation in the form of a commission, fee, or other valuable consideration. ie: Details of Property Transfer, Knowledge of Market Conditions, Knowledge of How to Market Real Estate, Knowledge of How to Analyze Buyer Needs, and Knowledge of Laws pertaining to Real Estate. |
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Term
Chapter 61J2
Florida Administrative Code |
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Definition
| A set of administrative rules set up by The Florida Real Estate Commission pursuant to the rule making process outlined in Chapter 120. |
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Term
Chapter 120
Administrative Procedure Act |
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Definition
Defines Procedural Process for ALL government entities authorized under the Florida Constitution.
Licensing and disciplinary process for Real Estate licenses are outlined. |
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Term
Chapter 445
Regulation of Professions and Occupations |
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Definition
| Defines legal practice and procedure for the Department of Business and Professional Regulation and the professions under the department. |
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Term
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Definition
| Any real estate activities involving compensation for performing the service for another. |
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Term
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Definition
| To enact and publish rules and regulations. To promote or make widely known. |
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Term
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Definition
| The Power of the Florida Real Estate Commission (FREC) to grant or deny license applications, to determine license law violations, and to administer penalties. Hears complaints, disciplines licensees, and grants or denies Recovery Fund claims. |
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Term
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Definition
| The Power of the Florida Real Estate Commission (FREC) to enact administrative questions and adopt rules regarding the practice of real estate. |
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Term
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Definition
| The Power of the Florida Real Estate Commission (FREC) to regulate and enforce license law. |
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Term
The Florida Real Estate Commission
(FREC) |
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Definition
| Regulatory body charged to protect the general public thru Real Estate regulation. Consumer Protection. |
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Term
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Definition
| A legal term used to refer to evidence that is good and sufficient on it's face to establish a given face or prove a case. Presumptive Evidence. "At First Face" |
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Term
| Qualifications for Sales Associate Licensure |
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Definition
- 18 years of age or older.
- High School Diploma or Equivalent
- Social Security Number
- Honest, Truthful, Trustworthy, of good character, Reputation of fair dealing.
- Competent and qualified to make transactions and conduct negotiations with safety. |
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Term
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Definition
| A written document issued by the Department of Business and Professional Regulation (DBPR) that serves as prima facie evidence that the person is licensed on the data shown. Indicates effective date, expiration date, name of Governor and DBPR secretary. |
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Term
| Mutual Recognition Agreement |
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Definition
| A transactional agreement between Florida and another state that provides for the two states to recognize each other's real estate pre license education. |
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Term
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Definition
| The practice of mutual exchanges of privileges. Some states have reciprocal arrangements for recognizing and granting licenses to licensed real estate professionals from other states. |
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Term
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Definition
| When the court determines that a defendant is not likely to again engage in a criminal act and that the ends of justice and the welfare of society do not require the defendant suffer the penalty imposed by law. After such determination, the court may withhold adjunction of guilt, stop the imposition of the sentence, and place the defendant on probation. |
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Term
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Definition
| A process by which the record of a criminal conviction is destroyed or sealed after expiration of time. |
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Term
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Definition
| The official placement of a real estate business or individual into the Department of Business and Professional Regulation's (DBPR) database. Includes: Name and address of each licensed broker and sales associate, name and business address of each sales associate's employer, sales associate and brokers license status, and job title |
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Term
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Definition
Establishes the Structure of the Executive Branch of Florida Government.
Provides for the Legislative, Executive and Judicial branches of Government. The Executive branch executes the programs and policies adopted by the Legislature. The Policies are implemented by the departments of the Executive branch, including the Department of Business and Professional Regulation (DBPR). |
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Term
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Definition
Latin: "Let the buyer beware"
The Buyer is responsible for their own knowledge in real estate transactions. |
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Term
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Definition
| Provides all services required to administer the Florida License Law. Duties are essentially administrative and ministerial (record keeping). Carries out the policies set by the Florida Real Estate Commission. Florida statute mandates that offices are located in Orlando. The Director is appointed by the Secretary of the Department of Business and Professional Regulation, subject to approval by majority vote of the Florida Real Estate Commission. The Director is a Senior Employee charged with the direct service assistance to FREC. |
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Term
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Definition
| For application and licensing purposes, is a person who has resided in Florida continuously for a period of 4 calendar months or more within the preceding year, regardless of temporary or permanent location. |
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Term
| 8 Services of Real Estate in Florida |
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Definition
Advertise Real Estate Services
Buy
Appraise
Rent (or provide rental info and lists)
Sell
Auction
Lease
Exchange |
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Term
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Definition
| Anything of value or a valuable consideration, directly or indirectly paid, promised, or expected to be paid or received. |
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Term
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Definition
| A plea of "no contest" entered in a criminal court of law. The defendant does not admit or deny the charges, though a fine or sentence may be imposed by the court. |
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Term
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Definition
| An individual who holds a brokers license but chooses to register under the direction of another broker. |
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Term
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Definition
| A person who performs Real Estate services for compensation or other consideration. Requires additional education, experience, and passing of the Broker License Exam. |
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Term
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Definition
| An unlicensed entity that sells, exchanges, or leases it's own property. |
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Term
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Definition
| A licensed person who performs real estate services for compensation but who does so under the direction, control, and management of an active Broker or Owner-Developer |
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Term
Chapter 475
The Real Estate Professional Practice Act |
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Definition
| Florida Statute which establishes the legal rights and responsibilities of Real Estate licensees and Real Estate appraisers. Part I (of IV) pertains to Real Estate Brokerage. Licensees are responsible for knowing the provisions. Provisions are implemented, interpreted and enforced by the Florida Real Estate Commission (FREC). |
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Term
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Definition
| Purchasing one or more lots and constructing a home (or homes) without a buyer in advance of construction. |
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Term
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Definition
| A custom builder constructs homes under contract with a buyer, often using building plans provided by an architect or the buyer. |
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Term
Department of Business and Professional Regulation
(DBPR) |
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Definition
| The agency charged with licensing and regulating businesses and professionals in the State of Florida. It is governed by Chapter 120, F.S. and is structured according to the requirements of Chapter 20.165, F.S. The Legislature, under Chapter 455, F.S., granted this agency the authority to investigate consumer complaints, issue subpoenas when conducting investigations, issue cease and desist orders to unlicensed individuals, and issue citations to licensed individuals. |
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Term
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Definition
| Regulates education courses and license examinations for each profession under the Department of Business and Professional Regulation (DBPR). |
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Term
| Division of Service Operations |
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Definition
Consists of two important units:
- The Customer Contact Center handles all incoming telephone, postal, and email inquiries from licensees and the general public.
- The Central Intake Unit processes all of the license applications and license fees that come in. The Central Intake Unit is also responsible for the issuance of all licenses and license renewal notifications for the Department. |
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Term
| Division of Florida Condominiums, Timeshares and Mobil Homes |
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Definition
| Provides consumer protection for Florida residents through education, complaint resolution, mediation and arbitration, and development disclosure. It regulates condominiums, cooperatives, time-shares, and mobil home parks. This division is also charged with providing complaint resolution for homeowner associations. |
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Term
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Definition
| Record keeping by the Division of Real Estate |
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Term
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Definition
| Regulates education courses and license examinations for each profession under the Department of Business and Professional Regulation (DBPR). Contracts with a professional testing service for exam services. Must ensure that the license examinations adequately and reliably measure an applicant's ability to practice Real Estate. |
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Term
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Definition
| New applicants for licensure are assessed an Initial Application Fee* in addition to the Biennial License Fee*. Applicants for initial licensure and for subsequent license renewal also pay an Un-licensed Activity Fee* and may be required to pay a Real Estate Recovery Fund Fee, if applicable. *Fees waved for military veterans who apply for a Real Estate license within 24 months after honorable discharge. |
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Term
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Definition
| The current residential address or P.O. Box a licensee uses to receive mail thru the U.S. Postal Service. Licensee must notify the Department of Business and Professional Regulation within 10 days of change of address. Failure is violation of FS 455, subject to citation and $500 fine. |
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Term
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Definition
| License law mandates that the initial license period must provide the licensee between 18-24 months of activity. All Real Estate licenses are issued with an expiration date of either March 31 or September 30. 90 days prior to expiration, Department of Business and Professional Regulation sends renewal notice. |
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Term
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Definition
| Post-License Education must be complete. Must complete 14 hours of continuing education per renewal period. If after expiration date will incur a late fee. |
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Term
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Definition
| The status required to engage in Real Estate services. Sales Associates find an employer and registering with the Department of Business and Professional Regulation under the employing broker or owner-developer. |
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Term
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Definition
| Licensee is qualified, but chooses not to engage in Real Estate services. Indefinite renewal provided continued education and free requirements are met. |
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Term
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Definition
| Failure to renew an active or voluntarily inactive license before the end of license period. If not renewed within 2 years becomes null and void. The status of a Sales Associate's when their Broker's license is suspended or revoked. |
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Term
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Definition
| The license status when a Sales Associate has failed to successfully complete post license education prior to the first renewal of the license or when a licensee has failed to renew two or more renewal cycles; the license status has been involuntary inactive for more than 24 months; When the FREC revokes a real estate license. When a license has been voluntarily relinquished. |
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Term
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Definition
| A license ceases to exist, effective as of the date approved by the Commission, and does not involve disciplinary action. |
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Term
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Definition
| The licensee requests that the Department of Business and Professional Regulation cancel the license. The DBPR will accept a licensee's request provided there is no investigation or discipline pending against the licensee. The licensee sends written communication to the DBPR indicating that the licensee is retiring or no longer desires to be licensed. |
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Term
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Definition
| The license exists, however the licensee cannot use it because the license is either inactive or has been suspended. |
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Term
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Definition
| When certain events occur, such as a broker changing a business address, the licensee cannot conduct business until the DBPR receives notification of the change. |
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Term
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Definition
| Licensee is active and up to date with respect to the Department of Business and Professional Regulation's requirements for licensure. |
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Term
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Definition
| The status of a current, valid license registered with the Department of Business and Professional Regulation. The status required to engage in the real estate business. |
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Term
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Definition
| An administrative penalty imposed by the Florida Real Estate Commission that allows the licensee to continue to practice real estate under the guidance of (FREC). |
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Term
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Definition
| A broker holds more than one broker's license for more than one broker's entities. |
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Term
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Definition
| Issued to a sales associate or broker associate employed by an owner-developer (real estate developer) who owns properties in the name of various entities. Entitles the licensee to work for the separate sales projects owned by the owner-developer. |
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Term
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Definition
| Owner-developers are not required to hold real estate licenses if they only sell their own properties so they are registered with the Department of Business and Professional Regulation under this instead. |
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Term
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Definition
| Licensees is not current or active with respect to the Department of Business and Professional Regulation's requirements and may not perform real estate services. |
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Term
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Definition
| The result of a disciplinary proceeding, the licensee is prevented from working for a period of time. |
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Term
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Definition
| The form by which a licensee may update their status through the DBPR's Processing Unit |
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Term
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Definition
| When an individual performs real estate services with a void license. |
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Term
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Definition
| Common law, Statutory law, and Administrative law |
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Term
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Definition
| Sometimes called "unwritten law", is law based on usage, general acceptance, and custom. It is judge-made law manifested in decrees and judgments of the courts (case law). Originated in England and was later incorporated into the U.S. legal system. Absolute Loyalty. |
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Term
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Definition
| Written statutes enacted by the legislature. |
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Term
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Definition
| Created by administrative agencies in the form of rules, regulations, orders, and decisions. |
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Term
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Definition
| Buyer or Seller who authorizes the agent to act on their behalf; is responsible for the actions of the agent. |
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Term
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Definition
| A person entrusted with another's business; the person authorized by the principal to act on the principal's behalf. |
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Term
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Definition
| Involving trust, especially with regard to the relationship between a trustee and a beneficiary. Owing complete allegiance to the Principal. |
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Term
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Definition
| People conduct negotiations on their own behalf without trusting the other's fairness or integrity and without being subject to the other's control or influence. |
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Term
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Definition
| An agent authorized by the principal to perform all acts that the principal may personally perform and that may be lawfully delegated. |
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Term
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Definition
| Authorized by the principal to handle the affairs related to a business or trade, or to handle all the business at a certain location; ie: a property manager. |
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Term
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Definition
| An agent authorized by the Principal to handle only a specific business transaction or to perform a specific act. |
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Term
| Brokerage Relationship Disclosure Act |
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Definition
| Intended to inform and educate the public regarding the types of authority (brokerage relationships) that can be granted to a broker and the duties brokers have in each type of brokerage relationship. |
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Term
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Definition
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Term
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Definition
| A broker who represents as a fiduciary both the buyer and the seller in a residential real estate transaction; illegal in Florida. |
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Term
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Definition
| Mandates certain duties and obligations in each type of brokerage relationship. These duties and obligations apply to all real estate transactions. Written disclosures are required only when dealing in residential real estate sale transactions |
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Term
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Definition
| The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of ten or fewer acres. |
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Term
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Definition
| A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does not represent either party in a fiduciary capacity or as a single agent. The seller (or the buyer) is considered to be a customer of the real estate broker and not a principal. In a transaction broker relationship, the buyer or seller (customer) is not responsible for the acts of a licensee. A licensee may enter into a transaction broker relationship with both parties. |
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Term
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Definition
| A member of the public who is or may be a buyer or a seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship. One who chooses limited representation under the transaction broker relationship. |
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Term
| Duties of a Transaction Broker |
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Definition
1. Deal Honestly and Fairly
2. Account for All Funds
3. Use Skill, Care and Diligence in the Transaction
4. Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
5. Present all offers and counteroffers in a timely manner.
6. Exercise limited confidentiality, unless waived in writing by a party.
7. Perform any additional duties that are mutually agreed to with a party. |
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Term
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Definition
| Prevents disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential. |
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Term
| Scope of Limited Representation |
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Definition
| When a Transactional Broker and customer agree that the customer will handle some responsibilities and Transactional Broker will handle others. The parties give up their rights to the undivided loyalty of a licensee. |
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Term
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Definition
| A broker who represents either the buyer or the seller (but not both) and has a fiduciary relationship with the party represented. |
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Term
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Definition
| A person authorized to assist and represent the agent and whose duties are delegated by the original agent. |
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Term
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Definition
| Undivided Loyalty and Trust. Sales associates and broker associates owe the same obligations to the broker's principals as does their broker. |
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Term
| Duties of a Real Estate Licensee |
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Definition
1. Deal Honestly and Fairly
2. Loyalty
3. Confidentiality
4. Obedience
5. Full Disclosure
6. Account for All Funds
7. Use Skill, Care and Diligence in the Transaction
8. Present all offers and counteroffers in a timely manner.
9. Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer. |
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Term
| Duties applying only to single agent relationships |
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Definition
Confidentiality
Obedience
Loyalty
Disclosure (full) |
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Term
| No Brokerage Relationship |
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Definition
- Deal honestly and fairly.
- Disclose all known facts that materially affect the value of residential real property that are not readily observable to the buyer.
- Account for all funds entrusted to the licensee. |
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Term
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Definition
| Under Florida law, it is presumed that all licensees are operating as transaction brokers unless another brokerage relationship is established. The duties of the chosen relationship must be fully described and disclosed in writing to a buyer or the seller, either as a separate and distinct disclosure document or included as part of another document. |
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Term
| Designated Sales Associates |
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Definition
| A nonresidential real estate transaction where the buyer and seller each have assets of $1 million or more, and the broker (at the request of the buyer and seller) designates two sales associates to act as single agents for the buyer and seller in the same transaction. In this arrangement, the broker serves as an advisor to each agent—not to the buyer or the seller. |
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Term
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Definition
| Brokers must keep possession of brokerage relationship disclosure documents and buyer broker agreements for 5 years for all residential transactions that result in a written contract to purchase and sell real property and all nonresidential transactions that use designated sales associates. If a transaction fails to close, the licensee should keep the brokerage relationship disclosure documents with the purchase and sale contract, escrow documentation, and other documents associated with the property, and place them in the "dead" (failed to close) file. |
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Term
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Definition
| When the objectives have been accomplished according to the terms of the contract that created the brokerage relationship and notice is given. A principal is justified in revoking a single agent relationship with if the broker-agent breaches any of the fiduciary duties. |
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Term
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Definition
| The term used to describe a licensee's boasting of a property's benefits. The law allows real estate agents to enthusiastically describe the value of real estate and/or the potential of the property. Licensees may not, however, exaggerate, conceal, or misrepresent by making statements they know to be untrue. |
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Term
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Definition
| The misstatement of fact or the omission or concealment of a factual matter. Can lead to fraud. |
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Term
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Definition
| Must consist of at least one enclosed room in a building of stationary construction that will provide privacy to conduct negotiations and closings of real estate transactions. The broker's books, records, and real estate transaction files are to be kept here. Florida law does not require the broker to have a telephone, desk, business checking account, or an escrow account. If local zoning permits, this may be in the broker's residence, provided the required sign is displayed properly. |
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Term
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Definition
| Disseminating (or cause to be disseminated by any means) any false or misleading information for the purpose of offering for sale, or for the purpose of causing or inducing any other person to purchase, lease, or rent, real estate located in the state or for the purpose of causing or inducing any other person to acquire an interest in the title to real estate located in the state. Publication of false or misleading information by means of radio, television, or written matter for the purpose of inducing someone to buy, lease, rent, or acquire an interest in title to real property is illegal. |
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Term
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Definition
| An advertisement that provides only a telephone number, a post office box, and/or an address without the licensed name of the brokerage firm. |
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Term
| Point of Contact Information |
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Definition
| Any means by which to contact the brokerage firm or individual licensee, including mailing address(es), physical street address(es), email address(es), telephone number(s), or facsimile (fax) telephone number(s). |
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Term
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Definition
| The initiation of a telephone call for the purpose of encouraging the purchase of, or investment in, property, goods, or services. |
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Term
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Definition
| A sum of money, or its equivalent, delivered to a real estate licensee as earnest money, payment, or partial payment in connection with a real estate transaction. |
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Term
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Definition
| Money given as good faith to accompany an offer to purchase or lease real property. |
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Term
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Definition
| An account for the deposit of money held by a third party in trust for another for safekeeping. |
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Term
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Definition
| Cash, checks, money orders, or other items that can be converted to cash and that are held by a third party in connection with a real estate transaction. |
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Term
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Definition
| No later than the end of the third business day after their sales associate (or an employee of their brokerage company) has received it (see below). The first day of the three-business-day time period coincides with the day that the sales associate must turn over the deposit to the broker. |
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Term
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Definition
| The seller's approval must be obtained before accepting. Once accepted, the broker should secure the instrument in a proper place, such as an office safe, until the date on the check becomes current, and then immediately deposit the check into the broker's escrow account. A broker will not be held responsible for the nonpayment of an escrow check, provided the broker timely deposits the check into the escrow account and the broker's own culpable negligence did not cause the check not to be honored. |
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Term
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Definition
| Brokers may maintain either an interest-bearing or non-interest-bearing escrow account in a Florida commercial bank, credit union, or savings association. Some brokers do not want the responsibility and liability of maintaining an escrow account. Instead they may choose to have a Florida-based title company that has trust powers to maintain the escrow funds, or alternatively, if designated in the sale contract, a Florida attorney may escrow the funds. |
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Term
| Signatory on Escrow Account |
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Definition
| The escrow accounts must be properly reconciled each month, and the broker must review, sign, and date the monthly bank reconciliations. The broker may designate another person, such as a bookkeeper, to sign checks on the account in the ordinary course of business. Brokers should use caution when delegating escrow responsibilities to another person. Florida law holds the broker accountable for reviewing the brokerage firm's escrow accounting procedures to ensure compliance with Florida license law. |
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Term
| Title Company and Attorney Escrow Accounts |
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Definition
The real estate licensee who prepared or presented the sale contract must indicate on the purchase and sale agreement the title company's name (or attorney's name, if applicable), address, and telephone number.
No later than 10 business days after each deposit is due under the terms of the sale contract, the licensee's broker must request a written verification of receipt of the deposit. The broker's request to the title company (or to the attorney) must be in writing. If the deposit is held by a title company or by an attorney nominated in writing by the seller or the seller's agent, the verification is waived.
No later than 10 business days after the date the broker made the written request for verification of the deposit, the broker must provide the seller's broker with a copy of the written verification. If the title company (or attorney) failed to provide the broker with a written verification, this information must be given to the seller's broker no later than 10 business days after the request for verification of the deposit. If the seller is not represented by a broker, the licensee's broker must notify the seller directly. |
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Term
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Definition
| The illegal practice of mixing a buyer's, seller's, tenant's, or landlord's funds with the broker's own money or mixing escrow money with the broker's personal funds or brokerage funds. |
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Term
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Definition
| To put to a wrong use. To apply wrongfully or dishonestly, as funds entrusted to one's care. Embezzlement. |
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Term
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Definition
| The unauthorized control or use of another person's personal property. |
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Term
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Definition
| The buyer and seller make demands regarding the disbursement of escrowed property that are inconsistent and cannot be resolved. |
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Term
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Definition
| An informal, non-adversarial process intended to reach a negotiated settlement that is not binding. |
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Term
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Definition
| A process whereby, with the prior written consent of all parties to the dispute, the matter is submitted to a disinterested third party who makes a binding judgment. |
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Term
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Definition
| One of the settlement (escape) procedures that provides for the matter to be resolved in a court of law when there are disputing parties regarding escrow funds. |
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Term
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Definition
| A legal proceeding whereby the broker, having no financial interest in the disputed funds, deposits with the court the disputed escrow deposit so that the court can determine the rightful claimant. |
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Term
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Definition
| A court action filed with the judge in a court of law if the broker believes that the broker is entitled to a portion of the disputed escrow funds. |
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Term
| Escrow Disbursement Order (EDO) |
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Definition
| A determination by the FREC of who is entitled to disputed funds |
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Term
| The Four Settlement Procedures |
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Definition
M Mediation (non-binding)
A Arbitration (binding)
L Litigation
E Escrow disbursement order (EDO) |
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Term
| Exceptions to the Notice and Settlement Procedures for Sales Escrow Accounts |
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Definition
1. Brokers who are entrusted with an earnest money deposit concerning a residential sale contract used by HUD in the sale of HUD-owned property are exempted. In such cases, the broker is required to follow HUD's Agreement to Abide, Broker Participation Requirements.
2. If a buyer of a residential condominium unit timely delivers to a licensee written notice of the buyer's intent to cancel the contract as authorized by the Condominium Act, the licensee may return the escrowed property to the purchaser without notifying the Commission or initiating any of the settlement procedures.
3. If a buyer of real property in good faith fails to satisfy the terms specified in the financing clause of a contract for sale and purchase, the licensee may return the escrowed funds to the purchaser without notifying the Commission or initiating any of the settlement procedures. |
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Term
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Definition
| A party's honest intent to transact business, free from any intent to defraud the other party, and generally speaking, each party's faithfulness to his or her duties or obligations as set forth by contract. |
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Term
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Definition
| Prohibits a real estate licensee from collecting an advance fee for the listing of a time-share unit. |
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Term
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Definition
| State and federal laws designed to maintain and preserve business competition. |
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Term
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Definition
| Competing brokers conspire to establish a standard commission. |
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Term
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Definition
| An agreement between brokers to split up competitive market areas among themselves and not compete in each other's areas. |
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Term
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Definition
| A pending legal action, or a formal notice of this. |
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Term
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Definition
| A right to keep possession of property belonging to another person until a debt owed by that person is discharged. |
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Term
Chapter 475, Part III
The Commercial Real Estate Sales Commission Lien Act |
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Definition
| Gives a broker lien rights for earned commission. Applies only to commercial property. The lien is only against the owner's net proceeds (personal property) from the sale and does not apply to the commercial real property. |
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Term
Chapter 475, Part IV
The Commercial Real Estate Leasing Commission Lien Act |
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Definition
| Gives a broker lien rights for earned commission associated with a brokerage agreement to lease commercial real estate. If the landlord is the person obligated to pay the leasing commission, the broker's lien attaches to the landlord's interest in the commercial real estate. If the tenant is the person obligated to pay the leasing commission, the broker's lien attaches to the tenant's leasehold estate. |
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Term
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Definition
| A broker receives money from someone other than the buyer or the seller, such as for referring a buyer or seller to a particular vendor for services. |
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Term
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Definition
| A collection of office rules and regulations created to inform sales associates and employees of the standards and procedures in that particular office. |
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Term
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Definition
| A business owned by one person with no legal separation between the owner and the business. Are personally liable not only for their own actions but also for the actions of any employees acting within the scope of their employment. |
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Term
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Definition
| An association of two or more persons for the purpose of jointly conducting a business together and each to share the profits and losses of the business. |
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Term
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Definition
| One or more general partners and one or more limited partners. At least one general partner must be licensed as an active broker. Must register with the DBPR under the limited partnership name. |
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Term
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Definition
| Quasi-Partnership, is not intentionally created. The parties do not form a real partnership but act or do business in such a manner that the public, having no knowledge of the private relations of the parties, would reasonably be deceived into believing that a partnership exists. The conduct of two or more persons creates the "appearance" that a partnership exists. |
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Term
| Limited Liability Partnership |
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Definition
| Features protection from personal liability in much the same way as limited partners in a limited partnership. Is not liable for obligations or liabilities of the partnership arising from contract, errors or omissions, negligence, malpractice, or wrongful acts committed by another partner or by an employee, agent, or representative of the partnership. |
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Term
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Definition
| An artificial person or legal entity created by law and consisting of one or more persons that is formed by filing articles of incorporation. |
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Term
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Definition
| A corporation organized under the laws of another state but that does business in Florida. |
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Term
| Limited Liability Company (LLC) |
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Definition
| A form of business organization that offers the best features of a corporation and a partnership; members are protected from personal liability as in a corporate form of ownership and the tax advantages of a partnership. |
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Term
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Definition
| An ecclesiastical or church organization that should not be confused with a corporation for profit. It is normally headed by a bishop or other clerical official who has been empowered by a church to hold title to church property. However, the title descends to successors in office and not to heirs. A broker should obtain a written opinion from a lawyer who has experience in such titles. May not register as a Broker. |
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Term
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Definition
| A temporary form of business arrangement where two or more parties combine their efforts to complete a single business transaction or a fixed number of business transactions. No written agreements are required for the formation. The rights, duties, and obligations are similar to those of partners in a partnership, except that they are restricted to the transaction for which the arrangement was formed. May not register as a Broker. |
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Term
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Definition
| A form of business entity that may be created to engage in transactions involving its own real property. Formed by any number of persons who make an investment at a stipulated amount per unit. The monies collected in this manner are then used to buy, develop, and/or sell real estate. Title to real property acquired is taken in the name of a trustee or group of trustees. May not register as a Broker. |
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Term
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Definition
| Permitted to conduct commercial business and to convey, sell, or buy its own property. May not register as a Broker. |
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Term
| Unincorporated Associations |
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Definition
| Generally recognized as groups of people associated for some noncommercial common purpose. They are not regarded as partners and are not incorporated. Can incur liabilities, and members are liable for debts to creditors in the same manner as partners. May not be registered as real estate brokers. |
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Term
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Definition
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Term
|
Definition
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Term
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Definition
| A business name other than the legal name of the person doing business. T/A or D/B/A |
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Term
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Definition
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Term
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Definition
| "Professional Limited Company" |
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Term
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Definition
| Individuals hired by a licensee to perform administrative tasks associated with real estate transactions. The tasks performed by a personal assistant determines whether the assistant must be a real estate licensee. |
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Term
| May NOT register as a Broker. |
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Definition
| Corporation Sole, Joint Venture, Business Trust, Cooperative Association, Unincorporated Associations |
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Term
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Definition
| A real estate broker is required to open an office and register it with the DBPR. |
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Term
| The brokerage office sign must contain |
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Definition
| (1) the trade name (if applicable), (2) the broker's name, and (3) the words "Licensed (or Lic.) Real Estate Broker." If desired, the names of the sales associates and broker associates may be added below the broker's name(s), provided the appropriate title (sales associate or broker associate) appears after their name. A line or space must separate the brokers' names from the associates' names. |
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Term
| If brokerage charges a fee for rental information |
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Definition
| The tenant must receive a receipt that outlines two refund provisions: (1) if the rental information is in error, there is a 100% refund; and (2) if the prospective tenant is unable to find a suitable rental, there is a 75% refund. The request for refund must be made verbally or in writing within 30 days following the day of purchase. |
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Term
| The penalty for a first-degree misdemeanor |
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Definition
| A fine of not more than $1,000 and/or up to one year in jail. |
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Term
| Types of business entities that MAY register as a Brokerage Entity |
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Definition
| Sole Proprietorship, General Partnership, Limited Partnership, Limited Liability Partnership, Corporation, and Limited Liability Company |
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Term
| Sales Associates and Broker Associates |
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Definition
| May not be members of the board of directors or officers of a real estate brokerage corporation, and are not allowed to register as general partners of a real estate brokerage general or limited partnership. |
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Term
| What amount of a broker's own personal funds may the broker place in the property management escrow account? |
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Definition
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Term
| For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR? |
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Definition
| Five years regardless of whether trust (escrow) funds were collected. |
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Term
| Which settlement procedure involves a Negotiated Settlement between the disputing parties? |
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Definition
| Mediation is an informal, non-adversarial process intended to reach a Negotiated Settlement. |
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Term
| What is the fine per telephone call for a violation of Florida's Telemarketing Act? |
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Definition
| Violators may be fined $10,000 per call. |
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Term
| Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation? |
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Definition
| Formed for income tax purposes only and is employed by and registered under either a licensed real estate broker or an owner-developer. |
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Term
| A real estate broker does NOT have to report to the FREC conflicting demands regarding escrowed property if the escrowed funds are maintained by which method? |
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Definition
| Florida Attorney's Trust Account. Real estate license law governs only broker's escrow accounts held in Florida commercial banks, credit unions, or savings associations. Real estate license law has no authority over title company escrow accounts or attorney escrow accounts. Therefore, if a title company or an attorney is the escrow agent, the broker has no obligation to report an escrow dispute to the FREC. |
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Term
| A broker who has a good faith doubt regarding who is entitled to escrow funds should take which action? |
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Definition
| Notify the FREC in writing within 15 business days. |
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Term
| Which statement is TRUE regarding interest-bearing escrow accounts? |
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Definition
| The broker must get written permission from all parties before placing the funds into the account. The written authorization must specify who is entitled to the interest earned. |
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Term
| A sales associate may hold which position? |
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Definition
| Limited partner in a real estate brokerage limited partnership. May not be an officer or director of a real estate brokerage corporation. |
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Term
| A broker made a request to the Commission that it issue an escrow disbursement order (EDO) regarding disputed escrowed funds. Prior to the EDO being issued, the escrow dispute was settled between the parties. How long does the broker have to notify the FREC that the matter has been resolved? |
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Definition
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Term
| What is the maximum finder's fee that may be paid in the form of a credit toward rent paid to the tenant for referring a person to the management company if that person later becomes a tenant of the complex? |
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Definition
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Term
| A licensed real estate broker has a successful real estate business. The broker has branch offices in Fort Myers, Naples, and Bradenton, Florida. The broker wants to close her Bradenton office and open a new branch office in Sarasota, Florida. Which statement applies to this situation? |
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Definition
| The broker must register the new branch location and pay the branch office license fee. Registrations issued to branch offices are not transferable. |
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Term
| A couple tours several model homes in a new subdivision. The couple decides to purchase one of the available lots and have the builder construct one of the model floor plans on the lot. Which type of construction is this? |
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Definition
| Tract homes are a type of speculative building. A new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to have a home constructed in the new subdivision. |
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Term
| In which way does state government influence the real estate business? |
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Definition
| Identification of coastal regions. Property taxation, occupational licensing, and zoning. |
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Term
| An individual who received a four-year degree in real estate from a state university is NOT exempt from which license requirement? |
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Definition
| State license exam. Individuals who have received a four-year degree in real estate from an institution of higher education are exempt from the prelicense FREC Courses I and II. Such individuals are also exempt from post-license education requirements. |
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Term
| Attorneys who are active members in good standing with The Florida Bar are exempt from which education requirement? |
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Definition
| FREC Course I. Active members in good standing with The Florida Bar are also exempt from the continuing education requirements for real estate licensees. Attorneys are not exempt from the state license examinations for sales associates and brokers, the post-license requirements, or from FREC Course II. |
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Term
| Which task must a sales associate complete prior to the expiration of the initial sales associate license? |
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Definition
| 45 hours of post-license education. |
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Term
| A sales associate has held an active real estate license since 2008. The licensee neglected to renew his real estate license prior to the expiration date in March of this year. Which statement applies to this situation? |
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Definition
| The license reverts to involuntary inactive status. When a licensee has been in involuntary inactive status for 12 months or less, the licensee may satisfy the education requirement by completing 14 hours of FREC-approved continuing education. The 28-hour course is required if the license has been expired for more than 12 months but less than 24 months. |
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Term
| After what period of time does an involuntary inactive license automatically expire and become null and void? |
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Definition
| When a license is in involuntary inactive status for more than 2 years, the license automatically expires, and it becomes null and void. |
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Term
| How many Florida Real Estate Commission members may be licensed as real estate sales associates? |
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Definition
| 4 members must be licensed as brokers and 2 members must be consumer members. The 7th member may be either a licensed broker or a sales associate who has held an active license during the 2 years preceding appointment. |
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Term
| The FREC's power to determine license law violations is an exercise of which type of power? |
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Definition
| Quasi-judicial: responsibilities include the power to grant or deny license applications, to determine license law violations, and to administer penalties. |
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Term
| The Director of the Division of Real Estate is appointed by |
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Definition
| Secretary of the DBPR, subject to approval by majority vote of the FREC. |
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Term
| What is the maximum number of consecutive years a Commissioner may serve on the Florida Real Estate Commission? |
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Definition
| A Commissioner may not serve more than 2 consecutive 4-year terms. (8 years) |
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Term
| An individual on active duty with the U.S. Navy has up until what period of time after discharge from active duty to renew a real estate license? |
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Definition
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Term
| A sales associate moved from Lake City, Florida to Key West, Florida. What action must the licensee take? |
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Definition
| Licensees must notify the DBPR in writing within 10 days of a change in current mailing address. |
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Term
| Which power is given to the Florida Real Estate Commission? |
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Definition
| Make determinations of license law violations and impose administrative penalties. |
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Term
| Which information must be disclosed to a prospective buyer regarding a particular property? |
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Definition
| All known facts that materially affect the value of a residential property. |
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Term
| In commercial real estate transactions that meet specific criteria, a real estate brokerage may use one sales associate to work as a single agent of the buyer and another sales associate to act as a single agent of the seller. Which criteria must be met? |
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Definition
| The broker must serve as a neutral party helping to facilitate the process without giving guidance or representation to the parties in the transaction. |
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Term
| How long is a broker required to retain the brokerage relationship disclosure documents? |
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Definition
|
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Term
| Elements of a cause of action for Fraud: |
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Definition
| (1) the licensee made a misstatement or failed to disclose a material fact; (2) the licensee either knew or should have known that the statement was not accurate or that the undisclosed information should have been disclosed; (3) the buyer relied on the misstatement; and (4) the buyer was damaged as a result. |
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Term
| The presumed brokerage relationship in Florida |
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Definition
|
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Term
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Definition
| The breaking of a promise of obligation. Any violation or omission of a legal or moral duty. |
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Term
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Definition
| To mix the money or other personal property of a buyer or a seller with a broker's own money or property, or to combine escrow money with personal or business funds. Sometimes called intermingle. |
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Term
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Definition
| The withholding of information or a material fact. In a fiduciary relationship, for example, the broker has a duty to speak, unless the principal knows the information or fact. |
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Term
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Definition
| A licensee's personal use or misuse of client (or customer) monies. |
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Term
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Definition
| Involves negligent conduct that, while not intentional, involves a disregard of the consequences likely to result for one's actions. |
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Term
| Failure to Account For and Deliver |
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Definition
| The act of failing to pay money to a person entitled to receive it. |
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Term
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Definition
| The intent to misrepresent a material fact or to deceive to gain an unfair advantage or to harm another person. |
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Term
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Definition
| Information that affects the value of the real property and is relevant to a person making a decision about the property. |
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Term
|
Definition
| An untrue statement of fact or the concealment of a material fact. |
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Term
|
Definition
| Conduct contrary to honesty, good morals, justice, and accepted custom. |
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Term
| Process of Dealing with Complaints of Alleged Violations: |
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Definition
1. A complaint is filed
2. The complaint is investigated
3. Probable cause is determined
4. Formal complaint is issued if probable cause is found
5. Informal hearing or formal hearing is conducted
6. Final order is issued
7. Judicial review (appeal) of the final order occurs |
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Term
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Definition
| An alleged violation of a law or rule. |
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Term
|
Definition
| A complaint contains facts indicating that a violation of Florida statute, DBPR rule, or FREC rule may have occurred. |
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Term
|
Definition
| The person who makes an allegation or a charge against another person (the respondent). |
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Term
|
Definition
| An emergency suspension that must be issued by the DBPR secretary or the secretary's designee. DBPR or FREC may decide that the licensee cannot be allowed to continue to practice real estate during the normal disciplinary process. Aka: Emergency Suspension Order |
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Term
| Emergency Suspension Order |
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Definition
| To cause to cease operating for a period of time; the temporary withholding of a person's license rendering it ineffective; a period of enforced inactivity. Aka: Summary Suspension |
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Term
|
Definition
| Reasonable grounds (sufficient facts and evidence) to warrant prosecution. Is made by majority vote of a board's panel, or by the DBPR, if the profession does not have a board. The FREC panel is composed of two individuals. One of the panel members must be a current member of the Florida Real Estate Commission. The other panel member may be a former Commissioner. |
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Term
|
Definition
| An outline of charges against a licensee. (Also called an administrative complaint.) |
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Term
|
Definition
| An outline of allegations of facts and charges against the licensee. (Also called a formal complaint.) |
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Term
|
Definition
| An agreement as to the penalty reached between the attorneys for the DRE and the licensee or licensee's attorney. |
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Term
| Voluntary Relinquishment for Permanent Revocation |
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Definition
| Permanently puts the licensee out of the real estate business |
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Term
|
Definition
| normally held at a regular Commission meeting, the licensee-respondent is given an opportunity to explain the details of the case with supporting evidence and/or witnesses. Any Commissioners who served on the probable-cause panel for the particular complaint may not participate in this informal hearing. If any party raises an issue of disputed fact during an informal hearing, the hearing is terminated and a formal hearing will be scheduled before an administrative law judge. The FREC will determine based on the admitted facts whether the licensee is guilty of the charges alleged in the complaint. If the licensee is found guilty of the charges, the FREC will determine which penalties are appropriate based on the details of the case, taking into consideration any mitigating circumstances (reasons to reduce the impact of the violation), and it will issue a final order |
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Term
|
Definition
| The type of hearing used if the licensee-respondent either requests a formal hearing or if the licensee-respondent disputes the allegations. |
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Term
| Division of Administrative Hearings (DOAH) |
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Definition
| The entity that employs administrative law judges (ALJs) to conduct formal hearings of administrative complaints against licensees. |
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Term
|
Definition
| A command to appear at a certain time and place to give testimony. |
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Term
|
Definition
| The administrative law judge's findings, conclusions, and recommended penalty. |
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Term
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Definition
| FREC's final decision as to innocence or guilt and the determination of the appropriate penalty. The final order must be in writing. It must include the facts established during the proceeding and state each conclusion of law separately. A copy is mailed to each party in the case. The notice must inform the recipient of the appeal process. |
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Term
|
Definition
| The licensee-respondent may challenge a final order within 30 days by filing an appeal. Must be filed with the DBPR and with the appropriate district court. |
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Term
|
Definition
| Stops the enforcement of a suspension or revocation in the final order pending the outcome of the appeal process. |
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Term
|
Definition
| An order issued by a court that supersedes the action of the Commission and allows the licensee to continue to practice until the case can be heard on appeal. |
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