Regulatory Compliance and Ethics Flashcards
7 cards from real CRECI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance and Ethics flashcards as text
A commercial property manager discovers a tenant is operating without required business licenses. The property manager's ethical obligation is to:
Answer: Notify the property owner and advise them to require the tenant to obtain proper licensing
The property manager's primary duty is to the owner; they should inform the owner of the compliance issue and recommend appropriate action.
Which of the following best describes 'puffery' in commercial real estate advertising?
Answer: Subjective, exaggerated promotional claims that no reasonable buyer would rely upon as fact
Puffery consists of vague, subjective boasts ('best location in town') that are not actionable misrepresentations because reasonable buyers do not treat them as factual claims.
Under the Sarbanes-Oxley Act (SOX), which commercial real estate entities have mandatory compliance obligations?
Answer: Publicly traded real estate companies and REITs listed on US exchanges
SOX applies to publicly traded companies, including REITs and real estate companies listed on US stock exchanges, requiring strict financial reporting and internal controls.
A commercial broker learns confidential financial information about a seller's motivation to sell quickly. After the transaction closes, the broker may:
Answer: Continue to maintain confidentiality of the information indefinitely
The duty of confidentiality regarding a former client's confidential information survives the end of the agency relationship and continues indefinitely.
Which federal agency primarily enforces compliance with the Americans with Disabilities Act (ADA) for commercial properties?
Answer: DOJ (Department of Justice)
The Department of Justice (DOJ) is the primary federal agency responsible for enforcing ADA Title III, which covers public accommodations and commercial facilities.
In commercial real estate, 'redlining' refers to:
Answer: Refusing to provide financial services or insurance to properties in certain geographic areas based on demographics
Redlining is the discriminatory practice of denying financial services, loans, or insurance to residents or businesses in areas based on the racial or ethnic composition of the neighborhood.
A CRECI member overhears colleagues at a conference discussing fixing commission rates across competing brokerages. The ethical and legal obligation is to:
Answer: Report the discussion to appropriate authorities and refrain from participation
Commission rate fixing among competing brokerages violates antitrust laws; a professional must refuse to participate and may have an obligation to report the activity.