Arkansas Real Estate Broker Exam — All Questions

Under Ark. Code Ann. § 17-42-301, an unlicensed person who performs one act for another for compensation that requires a license has:

• a.committed a violation only if the transaction actually closed
• b.committed no violation, unless three or more acts occur in a year
• c.committed a violation, because a single act is enough✓
• d.committed no violation, because a course of conduct is needed

Section 17-42-301(c) is explicit: "The commission of a single act by a person required to be licensed under this chapter and not so licensed shall constitute a violation of this chapter." Subsection (b) reaches anyone who "offers, attempts, or agrees to perform any single act" described in § 17-42-103(10) or (12), "whether as part of a transaction or as an entire transaction," so neither repetition nor a completed closing is required. Section 17-42-109(a) allows a civil penalty of up to $5,000 for unlicensed real estate activity, and § 17-42-105(d) makes a violation of the chapter a Class D felony.

Which person is exempt from Arkansas real estate licensure under Ark. Code Ann. § 17-42-104?

• a.A leasing agent paid a commission on each lease signed at an apartment complex
• b.A resident manager who lives on the premises and leases units for that employer✓
• c.An unlicensed assistant who negotiates lease terms for a share of the rent
• d.A person who lists a neighbor's house for sale for a flat fee paid at closing

Section 17-42-104(a)(5) exempts "a person acting as a resident manager when the resident manager resides on the premises and is engaged in the leasing of real property in connection with his or her employment." The other three all involve acts described in § 17-42-103(10) or (12) done for compensation. Section 17-42-104(a)(6) does exempt an unlicensed person paid only at a salaried or hourly rate for narrow clerical leasing functions, but that exemption is lost the moment the person negotiates terms, is paid a commission, or otherwise performs a listed act.

In Arkansas, principal broker and executive broker are designations placed on a person who already holds a broker license. To qualify for that broker license, an applicant generally must show:

• a.a higher application fee, with no experience of any kind
• b.24 months of licensed experience plus 60 classroom hours✓
• c.a real estate license in another state for one week
• d.the 120 classroom hours the statute sets as a ceiling

AREC Regulation 4.1(a)(2) calls for not less than 60 classroom hours completed within the 36 months immediately preceding the application, of which at least 45 must be in a course developed by the Commission. Ark. Code Ann. § 17-42-303(b)(1) supplies the experience: an active, bona fide apprenticeship holding a valid salesperson license issued by the Commission, or a salesperson or broker license from another state, "for a period of not less than twenty-four (24) months within the previous forty-eight-month period immediately preceding the date of application." A single week of out-of-state licensure clears nothing, and a larger fee substitutes for neither the time nor the coursework. The 120-hour figure is real but § 17-42-303(a)(1) sets it as a ceiling on what the Commission may require, not as the requirement.

AREC Regulation 4.1(c)(4) requires an applicant's state and federal criminal background check to have been completed within:

• a.six months immediately preceding receipt of the application✓
• b.thirty days immediately preceding receipt of the application
• c.three years immediately preceding receipt of the application
• d.twelve months immediately preceding receipt of the application

Regulation 4.1(c)(4) provides that the criminal background check "shall be completed within six months immediately preceding the date the Application for Real Estate License Examination is received in the Commission's office, and if not, the application shall be returned to the applicant." Regulation 4.1(h) lets an applicant sit for the examination once the request has been sent to the Identification Bureau of the Arkansas State Police, but Ark. Code Ann. § 17-42-306(a)(4)(B) bars issuing the license until the Commission receives and approves the checks.

An applicant who passes the Arkansas licensing examination must pay the license fee and the Real Estate Recovery Fund fee within:

• a.12 months of the examination, or the results are invalidated
• b.90 days of the examination, though the results remain valid
• c.30 days of the examination, or the results are invalidated
• d.90 days of the examination, or the results are invalidated✓

Ark. Code Ann. § 17-42-306(b)(1)(A) requires payment "within ninety (90) days from the date of the licensing examination," and § 17-42-306(b)(2) says failure to pay in that window "shall invalidate the licensing examination results, and the applicant shall be required to make new application and retake the licensing examination as an original applicant." Regulation 4.3(c) repeats the ninety days and waives the recovery fund fee for an applicant who has already paid it. The one extension the statute allows is § 17-42-306(b)(1)(B)(i), for a federal criminal background check that has not yet come back.

The holder of an inactive Arkansas real estate license may:

• a.practice as a broker or salesperson on the licensee's own property
• b.practice as a broker or salesperson for ninety days while activating
• c.practice as a broker or salesperson if a principal broker supervises
• d.not practice as a broker or salesperson without first activating it✓

Ark. Code Ann. § 17-42-308(a)(2) says the holder of an inactive license "shall not practice as a real estate broker, salesperson, property management associate, or property management broker in this state without first activating the license," and Regulation 6.2(c) repeats it. Supervision does not cure it, no grace period runs while activation is pending, and there is no self-dealing exception, since § 17-42-312(a)(1) reaches a licensee's conduct "regardless of whether the transaction was for his or her own account." Regulation 6.2(d) sets what activation takes: seven classroom hours of approved continuing education for each year renewed inactive, capped at thirty.

A terminated Arkansas licensee's transfer application to a new firm must be signed by the new principal broker and accompanied by the transfer fee and:

• a.a statement that the former principal broker consents to the licensee's move
• b.a statement that the licensee has completed seven hours of continuing education
• c.a statement that the licensee is taking no documents belonging to the old firm✓
• d.a statement that the licensee has settled all commissions the old firm owes

Regulation 7.5(b) requires the transfer application to be accompanied by "a statement that the licensee is not taking any listings, management contracts, appraisals, lease agreements, or copies of any such documents, or any other pertinent information belonging to the former principal broker or firm," plus a transfer fee. Ark. Code Ann. § 17-42-310(e) states the same requirement. The former broker's consent is not part of it, and neither continuing education nor a commission settlement is a condition of transfer. A temporary interim license may be issued when the application and accompanying items are filed.

When a licensee's association with an Arkansas principal broker ends, Regulation 7.5(a) gives the principal broker how long to notify the Commission and return the license and pocket card?

• a.Seven days, and the notification automatically inactivates the license✓
• b.Seven days, though the license stays active until the licensee transfers
• c.Thirty days, and the notification automatically inactivates the license
• d.Sixty days, and the notification automatically inactivates the license

Regulation 7.5(a) provides that "within seven (7) days after the employment or association of a licensee with a principal broker ends, such principal broker shall notify the Commission of such termination and return to the Commission the license and pocket card of the terminated licensee. Such notification shall automatically inactivate the license." Ark. Code Ann. § 17-42-310(d)(1) says the same. The terminated licensee must deliver the pocket card to the principal broker immediately, and under Regulation 7.5(d) the duty falls on the licensee if the principal broker is dead, unavailable, or unwilling to act.

Arkansas real estate licenses expire on December 31 each year. Under AREC Regulation 6.1(b), the renewal application and fee must be filed with the Commission no later than:

• a.September 30✓
• b.June 30
• c.December 31
• d.November 30

Regulation 6.1(a) provides that "unless renewed as active or inactive, every real estate broker or salesperson license shall expire on December 31 of each calendar year," and Regulation 6.1(b) requires renewal applications with the fee to be "filed with the Commission no later than September 30," by postmark or receipt. Renewal notices go out about July 15. A renewal application filed after the deadline "shall be treated as an application to renew an expired license," which carries the higher expired-license fee set by Regulation 3.1(a)(6).

How often must an Arkansas real estate license be renewed, and what is required?

• a.Only once, because an Arkansas license is permanent
• b.Annually, with AREC-approved continuing education✓
• c.Every two years, with AREC-approved continuing education
• d.Every ten years, with a new licensing examination

Regulation 6.1(a) puts every broker and salesperson license on a calendar-year cycle expiring December 31. Regulation 6.1(c) conditions active status on completing "annually seven (7) classroom hours of continuing education approved by the Commission," of which one hour "must focus on how real estate professionals can limit risk to preserve personal safety for agents and consumers." Ark. Code Ann. § 17-42-307(b)(1)(A) sets the statutory band at not less than six nor more than seven hours. A two-year cycle is the norm in many states but not in Arkansas, and Arkansas conditions renewal on coursework rather than on retesting.

Upon a change of name, address, or place of business, an Arkansas licensee must notify the Commission:

• a.within one year, by letter to the executive director, and pay the transfer fee
• b.promptly, on a form the Commission prescribes, and pay the reissuance fee✓
• c.at the next annual renewal, on the renewal form, and pay the reissuance fee
• d.only if the change also moves the licensee to a different real estate firm

Regulation 7.6(a) requires the licensee to "promptly notify the Commission of such change or loss on a form prescribed by the Commission," after which the Commission issues a new license for the unexpired period "upon the payment of the license reissuance fee." Ark. Code Ann. § 17-42-310(a) states the same duty. Regulation 7.6(b) adds that all licensees, active and inactive, must keep the Commission informed in writing of their personal residence address, physical business address, and mailing address. Waiting for renewal or for a year misses "promptly," and the duty is not limited to changes of firm.

AREC Regulation 10.16(a) requires a licensee convicted of, or pleading guilty or nolo contendere to, any crime other than a traffic violation to report it to the Commission within:

• a.thirty days after the conviction or plea✓
• b.six months after the conviction or plea
• c.thirty days after the sentence is served
• d.ten days after the conviction or plea

Regulation 10.16(a) requires the written report "within thirty (30) days after the conviction or plea," and it must include the dates of the offense and of the conviction or plea, the court, the specific crime, the sanctions imposed, copies of the charging document and judgment, and the licensee's explanation. The clock runs from the conviction or plea, not from completion of any sentence. Regulation 10.16(b) imposes a parallel thirty-day report when another occupational license is surrendered, denied, revoked, suspended, or sanctioned.