Alaska Real Estate Broker Exam — All Questions

An Alaska salesperson manages rental property. Under 12 AAC 64.550, that management activity must be conducted:

• a.in the registered name of the real estate company involved✓
• b.under a separate property management license from the state
• c.in the licensee's own name, as the fee is paid to the licensee
• d.in the owner's name, with the licensee acting as bookkeeper

12 AAC 64.550(a) requires that “[a] licensee engaged in property management shall conduct property management activity in the registered name of the real estate company with which the licensee is affiliated.” That follows from AS 08.88.331, under which a salesperson or associate broker performs licensed activity only through the employing broker. Alaska issues no separate property management license: AS 08.88.161(3) and (4) fold collecting rent, collecting property management fees, and practicing or negotiating to practice property management into the ordinary broker, associate broker and salesperson licenses.

An Alaska licensee owns a fourplex and rents the units out. Under 12 AAC 64.550, the licensee must disclose in writing to tenants and prospective tenants:

• a.that the licensee is licensed, and the affiliated firm's name✓
• b.the price the licensee paid and the current mortgage balance
• c.the licensee's commission split with the employing broker
• d.the names of the other tenants and the rent each one pays

12 AAC 64.550(e) requires that “[a] licensee that owns rental real property shall disclose in writing to all tenants and prospective tenants of that property that the licensee holds a real estate license and the name of the company with which the licensee is affiliated.” 12 AAC 64.570(b) adds more for licensee-owned rentals: the ownership must also be disclosed under AS 08.88.391 as a conflict of interest, and the broker must be given the ownership position and percentage, copies of all financial records and rental agreements, and an update whenever that information changes. What the rule does not require is disclosure of the licensee's own price, financing, compensation, or other tenants' business.

Under 12 AAC 64.240, an Alaska broker takes the property management fee out of the trust account:

• a.annually, when the owner's year-end accounting is delivered
• b.at any time, provided the ledger still shows a positive balance
• c.monthly, once that contract's receipts and expenses are settled✓
• d.in advance, at the start of each month of the management term

12 AAC 64.240(c) provides that a broker “shall disburse from a trust account the fee earned for providing property management services” and that “[t]he disbursal must be made on a regular monthly basis after the collection of monthly receipts and disbursement of expenses for that management contract are completed.” Taking the fee in advance or at will would also collide with 12 AAC 64.250, which forbids withdrawing trust funds without fully complying with the recordkeeping requirements of 12 AAC 64.220 and forbids paying the broker's own business or personal obligations out of trust money.

An Alaska licensee managing rentals does not put prepaid rents and security deposits into a trust account. Under 12 AAC 64.560, that failure is treated as:

• a.fraudulent or dishonest conduct under the licensing statute✓
• b.a bookkeeping lapse to be corrected at the next audit
• c.a matter for the landlord-tenant courts, not the commission
• d.acceptable where the owner gave written permission first

12 AAC 64.560 states that “[f]ailure of a licensee engaged in property management to deposit prepaid rents or security deposits in a trust account as required by AS 34.03 (Uniform Residential Landlord and Tenant Act) is considered fraudulent or dishonest conduct within the meaning of AS 08.88.071(a)(3)(A)(iv)” — the same disciplinary ground that reaches outright fraud in a sale. The owner cannot consent it away, and the commission's jurisdiction runs alongside whatever remedies the tenant has against the landlord. AS 34.03.070(c) is the underlying duty: prepaid rent and security deposits must be deposited promptly, wherever practicable, in a trust account at a bank, savings and loan association, or licensed escrow agent.

Rent on an Anchorage apartment is $1,400 a month. Under AS 34.03.070, the largest combined security deposit and prepaid rent the landlord may demand is:

• a.one month's periodic rent
• b.two months' periodic rent✓
• c.three months' periodic rent
• d.four months' periodic rent

AS 34.03.070(a) provides that a landlord “may not demand or receive prepaid rent or a security deposit, however denominated, in an amount or value in excess of two months' periodic rent,” and then lifts the ceiling entirely for expensive units: “[t]his section does not apply to rental units where the rent exceeds $2,000 a month.” At $1,400 the cap applies, so two months' rent is the limit. AS 34.03.070(h) allows one further deposit on top of that, but only for a pet.

On top of the ordinary deposit ceiling, AS 34.03.070 lets an Alaska landlord take an extra deposit for a tenant's pet. That extra deposit:

• a.may not exceed one month's rent, and not for a service animal✓
• b.may not exceed two months' rent, and applies to any animal
• c.is unlimited, as it is negotiated apart from the rental deal
• d.must be held by the tenant's veterinarian, not the landlord

AS 34.03.070(h) permits an additional security deposit “from a tenant who has a pet on the premises that is not a service animal,” provides that it “may not exceed the periodic rent for one month,” and requires it to be “accounted for separately from prepaid rent or a security deposit received under (a) of this section” and applied “only to the amount of damages that are directly related to the pet of the tenant.” AS 34.03.070(i)(2) defines a service animal as one individually trained to do work or perform tasks directly related to and for the benefit of an individual with a disability.

A month-to-month tenant gives proper 30-day notice, moves out and leaves no damage. Under AS 34.03.070, the landlord must mail the written notice and refund within:

• a.7 days after the tenancy ends
• b.14 days after the tenancy ends✓
• c.21 days after the tenancy ends
• d.30 days after the tenancy ends

AS 34.03.070(g) runs two clocks. Where the landlord or tenant has given notice complying with AS 34.03.290, “the landlord shall mail the written notice and refund … within 14 days after the tenancy is terminated and possession is delivered by the tenant,” except that the landlord “shall have 30 days … if costs are deducted for damages that the landlord has suffered because of the tenant's noncompliance.” Where the tenant did not give complying notice, the landlord gets 30 days. This tenant gave proper notice and there is nothing to deduct, so the 14-day clock governs. A willful failure to comply exposes the landlord to twice the amount withheld under AS 34.03.070(d).

An Alaska tenant's rent is unpaid when due. Under AS 34.03.220, the landlord may terminate only after written notice giving the tenant at least:

• a.3 days to pay the rent in full
• b.7 days to pay the rent in full✓
• c.10 days to pay the rent in full
• d.14 days to pay the rent in full

AS 34.03.220(b) provides that “[i]f rent is unpaid when due and the tenant fails to pay rent in full within seven days after written notice by the landlord of nonpayment and the intention to terminate the rental agreement if the rent is not paid within that period of time, the tenancy terminates.” Only one written notice of default is needed for any one default, and the landlord may accept a partial payment and extend the eviction date accordingly. The ten-day figure belongs to a different situation — AS 34.03.220(a)(2), material noncompliance with the rental agreement or with AS 34.03.120 affecting health and safety.

A property manager wants to show an occupied Alaska rental to a prospective buyer. Absent an emergency, AS 34.03.140 requires the landlord to give the tenant at least:

• a.12 hours notice of the intention to enter
• b.24 hours notice of the intention to enter✓
• c.48 hours notice of the intention to enter
• d.72 hours notice of the intention to enter

AS 34.03.140(c) provides that “[e]xcept in case of emergency or if it is impracticable to do so, the landlord shall give the tenant at least 24 hours notice of intention to enter and may enter only at reasonable times and with the tenant's consent,” and forbids abusing the right of access or using it to harass the tenant. AS 34.03.140(a) is the matching duty on the tenant: consent may not be unreasonably withheld where the landlord wants to inspect, make necessary or agreed repairs, supply agreed services, or exhibit the unit to prospective or actual purchasers, mortgagees, tenants, workers or contractors. AS 34.03.140(b) allows entry without consent in an emergency.