General Practice Flashcards

Which of the following situations requires disclosure of brokerage relationship to a customer? I. sale of improved property with four units or fewer II. leasing of property with four units or fewer unless the owner occupies one of the units III. sale of agricultural property with 10 acres or less

Answer: I and III

In Florida, disclosure of brokerage relationships is mandated for residential real estate transactions, which include the sale of improved property with four units or fewer, and the sale of un-improved residential property intended for four units or fewer. Additionally, the sale of agricultural property with 10 acres or less is typically considered residential for disclosure purposes. However, leasing property with four units or fewer does not require disclosure if the owner occupies one of the units, making statement II incorrect. Therefore, disclosure is required for situations I and III.

. Which brokerage relationship status requires that a broker disclose known facts that materially affect the value of residential property?

Answer: any status requires the disclosure.

In Florida, all real estate licensees, regardless of their specific brokerage relationship status (single agent, transaction broker, or no official brokerage relationship), have a fundamental statutory duty to disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer. This duty is a core consumer protection measure designed to ensure transparency and fairness in real estate transactions, preventing licensees from withholding crucial information from potential purchasers.

A licensed sales associate of a brokerage corporation may

Answer: own stock in that corporation.

In a real estate brokerage corporation, a licensed sales associate may own stock in that corporation as an investment. However, sales associates are generally prohibited from serving as officers or directors of the corporation. These management and leadership roles typically carry fiduciary duties and liabilities that are reserved for licensed brokers, who are responsible for the overall operation and compliance of the brokerage firm.

Dexter Bonham is purchasing property through Lawrence Hafner, licensed real estate broker. Hafner sold the same piece of property last year. Because Bonham is experiencing financial difficulties, Hafner tells him that the title was insured last year, and that he will go to the courthouse to determine if there have been any liens filed since then. This would save the buyer nearly $500. Which is correct?

Answer: Bonham should write a letter of commendation to the local Board.

A real estate broker is strictly prohibited from giving legal advice or rendering opinions on the status of title, even with good intentions to save a client money. This action constitutes the unauthorized practice of law, which is a serious violation of real estate license law. Only a qualified attorney or title company should provide such services, as they possess the necessary expertise and legal authority to interpret title records and provide legal opinions.

A single agent broker who wishes to remain loyal to the principal yet be involved in both sides of a transaction

Answer: must work with the other party in a "no official brokerage relationship" role.

In Florida, dual agency is prohibited. A single agent broker owes undivided loyalty to their principal. If a single agent wishes to work with the other party in the same transaction while maintaining loyalty to their principal, they cannot represent the other party as a single agent or transition to a transaction broker without both parties' written consent. The only way to interact with the other party without violating their single agency duty or creating an illegal dual agency is to work with that other party in a 'no official brokerage relationship' capacity, providing limited services without representation.

Permission to use another's property that may be withdrawn at will is

Answer: a license.

A license grants temporary, revocable permission to use another's property for a specific purpose. Unlike an easement, it does not create an interest in the land and can be withdrawn by the owner at any time. This makes it a flexible, non-possessory right that can be terminated at will.

An easement created when a person has been using a roadway without permission for over 20 years is called an

Answer: easement by prescription.

An easement by prescription is created when someone uses another's property openly, notoriously, continuously, and without permission for a statutorily defined period (often 20 years). This adverse use, if unchallenged by the owner, can ripen into a legal right to continue that use, similar to adverse possession but for a right of use rather than ownership.

All the following are methods of transferring legal title to real property except by

Answer: a sales contract.

A sales contract (or purchase agreement) is a legally binding agreement to transfer property, but it does not *itself* transfer legal title. It creates an equitable interest for the buyer and outlines the terms of the sale. Legal title is actually transferred later, typically by a deed, will, or through government action like eminent domain or a patent.

Jim, Matt and Jack were co-owners of a parcel of real property. Matt died, and his coownership passed, according to his will, to become part of his estate. The parties owned the property as

Answer: tenants in common.

In a tenancy in common, each co-owner holds an undivided interest in the property, and there is no right of survivorship. This means that upon the death of a tenant in common, their interest passes to their heirs or beneficiaries according to their will, rather than automatically to the surviving co-owners. This is distinct from joint tenancy, where the right of survivorship dictates that the deceased's interest automatically passes to the remaining joint tenants.

Which of the following is immediately south of Township 2 South, Range 6 West?

Answer: Township 3 South, Range 6 West

In the Government Survey System, townships are identified by their position relative to a principal meridian (East/West) and a base line (North/South). Moving 'south' from Township 2 South means increasing the 'South' number. Therefore, the township immediately south of Township 2 South, Range 6 West would be Township 3 South, Range 6 West, as the range (East/West) remains the same.

An owner wishes to have a survey made of a commercially-zoned parcel. It is 90 feet on the front, 159 feet on the north side, 120 feet on the back and 180 feet on the south side. It is not in a recorded subdivision. Which survey method would be most appropriate for the parcel?

Answer: metes and bounds

Metes and bounds is the most appropriate survey method for irregularly shaped parcels, especially those not part of a recorded subdivision. This method describes property boundaries by starting at a known point of beginning and then defining the perimeter using courses (directions) and distances (metes) and physical markers (bounds). Given the varying side lengths and lack of subdivision, metes and bounds provides the precise description needed.

Which of the following is not required on a contract?

Answer: execution and two witnesses

While a contract needs an offer and acceptance, competent parties, and a legal object to be valid, execution (signing) by both parties is generally sufficient. The requirement for *two witnesses* is typically specific to certain legal documents like deeds or wills in some jurisdictions, but it is not a universal requirement for *all* contracts to be valid.

To be valid, a deed must be

Answer: signed and witnessed.

To be valid and legally transfer title, a deed must be signed by the grantor (seller) and typically requires two witnesses in many states. While acknowledgment (notarization) is usually required for recording, and recording provides public notice, these are not always essential for the deed's *validity* between the parties. Delivery and acceptance are also crucial for title transfer, but signing and witnessing are fundamental to the deed's form.

Title to real property passes to the grantee when the deed is

Answer: delivered and accepted

Legal title to real property passes to the grantee (buyer) when the deed is *delivered by the grantor* with the intent to transfer title and *accepted by the grantee*. While signing, witnessing, and recording are important steps, the actual transfer of ownership occurs at the moment of delivery and acceptance, signifying the grantor's relinquishment and the grantee's acquisition of ownership.

Henry has a capital gain on the sale of his home of $197,000. He has owned the property for two years. The sales price was $425,000. Costs of sale were $7,000, qualified fix-up costs were $1,000 and moving costs were $2,000. How much must Henry pay in capital gains taxes on this sale if his normal tax rate is 25%?

Answer: $-0-

Under current tax law, a single individual can exclude up to $250,000 of capital gains from the sale of a primary residence, provided they owned and lived in the home for at least two of the five years preceding the sale. Henry's capital gain of $197,000 is less than the $250,000 exclusion limit, so he would pay $0 in capital gains taxes.

If an owner arrives before the foreclosure sale and pays the entire debt, court costs and legal fees, and interest on the property, he is exercising his

Answer: right of redemption.

The right of redemption allows a property owner facing foreclosure to reclaim their property by paying off the entire debt, including principal, interest, court costs, and legal fees, before the foreclosure sale occurs. This is known as equitable right of redemption. Some states also have a statutory right of redemption, allowing the owner to reclaim the property even after the sale for a specified period.

A subdivision developer gives the county title to streets in a subdivision. The county accepts the streets for maintenance. This transfer of title is known as

Answer: dedication.

Dedication is the voluntary transfer of private property by its owner to the public for public use, such as streets, parks, or utilities. When a developer gives the county title to streets and the county accepts them for maintenance, this formal act of transferring ownership for public benefit is known as dedication. This process ensures that public infrastructure within a subdivision is properly maintained and accessible.

Which of the following acts as an insurance agency?

Answer: FHA

The Federal Housing Administration (FHA) acts as an insurance agency by insuring loans made by FHA-approved lenders. This insurance protects lenders against losses if a borrower defaults on their mortgage, making it easier for individuals to qualify for home loans. While Fannie Mae and Freddie Mac are government-sponsored enterprises that buy mortgages, and the VA guarantees loans for veterans, only the FHA primarily functions as a mortgage insurance provider.

Which happens to the monthly payments on a fixed payment mortgage?

Answer: Interest portion of each payment decreases.

In a fixed-payment, amortizing mortgage, the total monthly payment remains constant over the loan's life. However, the allocation of this payment between principal and interest changes over time. Initially, a larger portion of the payment goes towards interest, but as the principal balance is gradually reduced with each payment, the amount of interest owed on the remaining balance decreases. Consequently, a larger portion of subsequent payments is then applied to the principal.

The most common method used by the Federal Reserve Board to control the supply of money is by

Answer: Open Market Operations.

The Federal Reserve Board primarily controls the money supply through Open Market Operations (OMO), which involve the buying and selling of government securities in the open market. When the Fed buys securities, it injects money into the banking system, increasing the money supply. Conversely, selling securities removes money from the system, decreasing the money supply, making OMO the most frequently used and effective tool for monetary policy.