Exam (elaborations)
POST LICENSING 303 - NC LAW, RULES, AND LEGAL CONCEPTS
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POST LICENSING 303 - NC LAW, RULES, AND LEGAL CONCEPTS
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POST LICENSING 303 - NC LAW, RULES, AND LEGALCONCEPTS
You will be presented with a series of scenarios. Indicate whether the activities
performed are allowed (Deal) or not (No Deal). We will then walk through the scenarios
together.
An LLC homebuilder building in several subdivisions has W-2 employees in model
homes in each subdivision who show available properties, discuss design options,
answer consumers' questions, negotiate sales contracts, accept deposits, and
otherwise service the transaction from beginning to end. - Answers- Deal
The believed owners of 40 acres of land that has passed by intestate succession from
the two prior owners hire an attorney to confirm title, which he does.
The attorney discovers that the tract is landlocked due to an out-conveyance by a prior
owner.
The attorney negotiates easement rights with an adjoining property owner, records the
easement, and is paid for his time based on his hourly rate. - Answers- Deal
The owners now ask the attorney, having resolved the title and access issues, whether
he know someone who would be interested in purchasing the property?
The attorney, on the owners' behalf, contacts two different developers, both of whom
compete for the property.
The owners accept an offer, the transaction closes, and pay the attorney 2% of the
purchase price for his services. - Answers- No Deal
Sellers are under contract to sell but must begin their new jobs in another state two
weeks prior to settlement and won't be able to attend.
The sellers sign a power of attorney giving the wife's unlicensed brother authority to sign
the deed, the settlement statement, and any other documents required at closing. -
Answers- Deal
A fully competent owner of several rental properties doesn't like to be burdened with
"details" and persuades her tax preparer to handle the leasing and rent collections for
her rental properties, since he reports all income and expenses when he prepares her
taxes each year.
The tax preparer is authorized to withhold 8% of all rents collected as his fee. -
Answers-
A fully competent owner of several rental properties doesn't like to be burdened with
"details" and persuades her tax preparer to handle the leasing and rent collections for
her rental properties, since he reports all income and expenses when he prepares her
taxes each year.
The tax preparer is authorized to withhold 8% of all rents collected as his fee. -
Answers- No Deal
,Son lives rent-free in one-half of a duplex owned by his parents. He mows the yard,
maintains the property, answers repair requests, collects the monthly rent and conveys
to his parents, and provides access to prospective tenants during transitions. -
Answers- No Deal
A listing agent receives a full-price offer from an unlicensed and unrepresented buyer. A
condition of the offer is that the listing agent share $5,000 of their commission with the
buyer, which is significantly less than what the listing company would pay a buyer agent.
May the listing company (with the seller's consent and lender disclosure) pay the buyer
$5000? - Answers- Deal
A broker manages two 200-unit apartment complexes owned by different entities, as
well as 40 single-family homes for multiple owners. The broker hires unlicensed salaried
persons to staff the office at each apartment complex. They show the units, accept rent
applications and money, fill in blanks on preprinted lease forms, and create binding
contracts. - Answers- Deal
The broker/property manager also hires unlicensed salaried persons to help her
manage the 40 single-family homes. They show the properties to prospective tenants,
answer questions, do move-in/move-out and routine inspections, and can negotiate a
lower rental price than advertised if they know the broker has accepted less in the past.
- Answers- No Deal
A broker has management agreements with several corporate or LLC owners to
manage multi-tenant retail space each entity owns. The broker hires unlicensed, but
well-trained, individuals as W-2 employees to staff the office at each retail center. They
show available space, quote rental prices and terms, answer questions, complete and
sign preprinted lease forms, and oversee maintenance and repair services. - Answers-
Deal
Property is owned by four unlicensed individuals as tenants-in-common who agree that
one of them will handle all marketing, showing, and negotiating of offers and will be
entitled to receive 5% of the sales price for her efforts.
The cotenants also agree that no offer will be binding until it is signed by all four
cotenants. - Answers- Deal
A municipal housing authority is the tenant under several long-term leases for multi-
family dwellings and also owns several properties. It leases or subleases and manages
these properties through regular salaried employees of the housing authority as
permitted under NCGS Chapter 157. - Answers- Deal
Adult child is appointed as the guardian for a parent who is suffering dementia and no
longer can manage their financial affairs.
,The guardian advertises the parent's home for lease, shows it, and after carefully vetting
an applicant enters into a written lease agreement, begins collecting the monthly rent,
and uses it to pay any property-related expenses. - Answers- Deal
A fully competent owner of several rental properties doesn't like to be burdened with
"details" and persuades her tax preparer to handle the leasing and rent collections for
her rental properties, since he reports all income and expenses when he prepares her
taxes each year.
The tax preparer is authorized to withhold 8% of all rents collected as his fee. -
Answers- No Deal
Of the forms of business ownership, which one is NOT an entity: - Answers- Sole
proprietorship
Entities: LLC, Partnership and Corporation
A licensee who is responsible for an office location is a: - Answers- BIC
Regarding firm licenses the following are true: - Answers- Failure to have a BIC with a
firm license results in an inactive license.
Failure to renew a firm license results in an expired license.
Every firm license must be renewed each year by June 30th.
All of the following is true regarding a BIC: - Answers- Full brokers may work for more
than one BIC with mutual consent of all BICs.
A BIC can only be the BIC of more than one firm provided they share the same location.
Every real estate location must have a BIC.
BIC and BIC eligible status can be maintained by: - Answers- Renewing license by
June 3rd and taking BICUP plus one elective by June 10th.
Regarding a BICs: - Answers- A BIC is responsible for an office location.
An active real estate license is required for: - Answers- Providing brokerage services.
**Selling could be FSBO and salaried employees are allowed to show units without
having a license.
A broker who is qualified to serve as a BIC but not currently serving as the BIC of any
office location is: - Answers- BIC Eligible
, A successful broker with a broker's assistant, closing coordinator and brokers
exclusively for listing and buyers describes the: - Answers- Evolution of a team.
The NCREC BIC Update recommends that BICs do all of the following EXCEPT: -
Answers- X Take the blame for a provisional broker's mistake.
Following a sale, the broker representing the buyer is surprised to learn that the listing
brokerage, which isn't a member of the same cooperative listing service, will not share
any compensation for the transaction. The broker should have: - Answers- Requested a
fee sharing agreement with the brokerage before submitting the buyer's offer.
An active broker works for a firm whose license expired on July 1. Which of the
following statements are true: - Answers- The broker may no longer be entitled to
compensation for services performed before July 1.
A broker recommends a plumber to new tenants. The broker and the plumber have an
agreement that the plumber will the broker 5% of the first fee paid by referred clients.
The broker is required to inform the tenants of: - Answers- The kickback arrangement
orally. Brokers must disclose kickback arrangements to any relevant party. Altough
written disclosure is highly recommended, it is not required.
When is a broker required to share some of the brokerage fee with the party principal: -
Answers- Never. Though a broker can share a portion of a brokerage fee with a party
principal, regardless of whether the party principal has a real estate license, the broker
is never REQUIRED to share such a fee.
A description of the compensation made in sufficient time to aid a reasonable person's
decision-making is known as: - Answers- Timely Disclosure
Which of the following properties could be subject to a commercial real estate broker
lien: - Answers- An office building. A commercial real estate broker lien can only apply
to a property that is used"... primarily for sales, office, research, institutional, or mining
purposes for multifamily residential purposes involving five or more dwelling units"... or
property that is zoned to permit such use, or which is subject to a petition for rezoning,
or which is in good faith intended to be immediately used for such purposes.
A broker recommends to a property owner a landscaping service and pays the service
provider from rents made on that property. In exchange, the landscaper pays the broker
a kickback. Which of the following is required for this arrangement to be legal: -
Answers- Written consent from the owner.
Regarding an unrepresented seller agreement: - Answers- Creates no other warrantied
or obligation between broker and seller.
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