Connecticut Real Estate Broker Exam — All Questions

A Connecticut broker's affiliated salesperson is sued by a third party over conduct in a listing the salesperson handled as an independent contractor. Under C.G.S. Section 20-312a, the broker is:

• a.Liable only for the portion of the commission that the broker actually retained
• b.Liable only if the broker directed the salesperson's conduct in writing
• c.Shielded from third-party liability by the independent contractor agreement
• d.Liable to the same extent as if the salesperson were the broker's employee✓

Section 20-312a states that "in any action brought by a third party against a real estate salesperson affiliated with a real estate broker as an independent contractor, such broker shall be liable to the same extent as if such affiliate had been employed as a real estate salesperson by such broker." The independent contractor label therefore changes the tax and employment relationship but not the broker's exposure to third parties, so treating the agreement as a shield inverts the statute. Nothing in the section scales the broker's liability to the commission split, which is a private accounting between broker and affiliate. And the statute imposes liability without regard to whether the broker gave written direction, which is why Section 20-320(b) separately says compliance with the chapter does not relieve a person of responsibility for the conduct of that person's agents or employees.

A Connecticut salesperson wants to bring a listing to a second brokerage while remaining affiliated with the first. Under C.G.S. Section 20-320(a)(4), doing so without the knowledge and consent of the salesperson's own broker is:

• a.A matter for the local board of realtors alone
• b.Permitted if the second brokerage pays the referral fee
• c.Grounds for suspension or revocation of the license✓
• d.Permitted, because listings belong to the salesperson

Section 20-320(a)(4) makes it a ground for discipline that a licensee "represented, or attempted to represent, a real estate broker, other than the real estate licensee's affiliated or supervising licensee, without the express knowledge and consent of such real estate licensee's affiliated or supervising licensee," and the commission may suspend, revoke or fine up to five thousand dollars per violation. A listing is a contract between the client and the brokerage, not property of the individual salesperson, so the claim that listings belong to the salesperson restates a common misunderstanding rather than the statute. Who pays a referral fee has no bearing on the consent requirement, and Section 20-320a separately bars referral fees for sending a buyer to a lender or attorney. A trade board may also discipline its own members, but the license itself is the commission's to suspend.

Under Conn. Agencies Regs. Section 20-328-2a(a), a Connecticut licensee who has a present or contemplated interest in a property must:

• a.Obtain the commission's written approval before proceeding with the sale
• b.Withdraw from the transaction before any offer is presented to the seller
• c.Disclose the interest only if a party asks about it in writing
• d.Disclose that interest specifically to all affected parties✓

The regulation provides that "a licensee shall not undertake to provide professional services concerning a property or its value where the licensee has a present or contemplated interest unless such interest is specifically disclosed to all affected parties." The duty is therefore satisfied by disclosure, not by withdrawal, so a rule requiring the licensee to step out of the deal states a stricter obligation than Connecticut imposes. The commission licenses and disciplines under Section 20-311b but does not pre-approve individual transactions, so waiting for its approval describes a procedure that does not exist. And the disclosure is affirmative: making it contingent on a party thinking to ask reverses the burden the regulation places on the licensee, and Section 20-320(a)(1) treats a material misrepresentation as separate grounds for discipline.

A Connecticut licensee prepares a purchase agreement and the parties sign it. Under C.G.S. Section 20-320(a)(7), the licensee must deliver a copy of the instrument to each party executing it:

• a.Immediately, on execution of the instrument✓
• b.Within three business days of execution
• c.Within ten calendar days of execution
• d.At the closing of title on the property

Section 20-320(a)(7) makes it grounds for discipline to have "failed to deliver immediately a copy of any instrument to any party or parties executing such instrument, where such instrument has been prepared by the real estate licensee or under such real estate licensee's supervision." Connecticut uses no grace period here, so a three-day or ten-day window reads a deadline into the statute that its text does not contain, and each would leave a signing party without the document that binds them. Delivery at closing is later still and defeats the purpose, which is to put the executed terms in the parties' hands while the transaction can still be acted on. Section 20-325m separately requires the broker to retain those contracts for at least seven years.

A Connecticut broker receives a buyer's earnest money deposit. Under C.G.S. Section 20-324k, the broker must place it in:

• a.The listing agent's personal account until closing
• b.An interest-bearing account held in the broker's own name
• c.The brokerage operating account, tracked by ledger entry
• d.A separate escrow or trust account in a Connecticut bank✓

Section 20-324k(a) requires each broker who "receives, accepts and holds any moneys on behalf of any principal, client or other person" to "at all times maintain a separate escrow or trust account, distinct from his own account, in a bank of his choice doing business in this state." Running the money through the operating account is commingling however carefully it is ledgered, and Section 20-320(a)(10) makes commingling grounds for discipline. Holding client money in an account in the broker's own name fails the statute's "distinct from his own account" requirement whether or not it earns interest. Routing it to an individual agent's personal account is worse on both counts, and Section 20-324k(b) lets the commission examine and audit the trust account whenever it deems that necessary.

Under C.G.S. Section 20-324k(c), money a Connecticut broker accepts and is not legally entitled to must be deposited in the escrow or trust account within:

• a.Two banking days of the date the broker receives the funds
• b.Ten calendar days of the date the broker receives the funds
• c.Three banking days of the date all necessary parties sign✓
• d.Five business days of the date all necessary parties sign

Section 20-324k(c) requires the broker to "deposit such moneys in his escrow or trust account within three banking days of the date the agreement evidencing such transaction is signed by all necessary parties to such transaction, pending final legal disposition of such moneys." Two features of that sentence decide the item: the count is three banking days, and it runs from full execution of the agreement rather than from the moment the broker takes the check, which is why the options starting the clock at receipt misstate the trigger even before their numbers are considered. Five business days and ten calendar days appear nowhere in the section. Section 20-324k(e) adds that a willful violation carries a fine of not more than one thousand dollars, imprisonment of not more than six months, or both.

A Connecticut applicant willfully misrepresents a fact required to be disclosed on a license application. Under C.G.S. Section 20-324, the penalty is a fine of not more than:

• a.One thousand dollars, imprisonment of not more than one year, or both
• b.Five thousand dollars, imprisonment of not more than six months, or both
• c.Ten thousand dollars, with no term of imprisonment
• d.Five hundred dollars, imprisonment of not more than six months, or both✓

Section 20-324 provides that any person "willfully misrepresenting any fact required to be disclosed in any application or in any other form, paper or document required to be filed with the commission in connection with an application for a license under this chapter shall be fined not more than five hundred dollars or imprisoned not more than six months or both." Connecticut's chapter carries several different money figures and the exam tests whether a candidate can keep them apart. One thousand dollars with six months is the criminal penalty in Section 20-325 for engaging in the real estate business without a license, not the application-misrepresentation penalty, and the term there is six months rather than a year. Five thousand dollars is the administrative fine the commission may impose per violation under Section 20-312(d) or Section 20-320(a). No provision of the chapter sets a ten thousand dollar penalty.

Under C.G.S. Section 20-311(21), which of the following is a "nonmaterial fact concerning real property" in Connecticut?

• a.That the basement has taken on water during periods of heavy rain
• b.That the roof was replaced after storm damage in the past two years
• c.That a boundary encroachment is disputed by the adjoining neighbor
• d.That the property was suspected to have been the site of a death✓

Section 20-311(21) defines a nonmaterial fact as one that includes, but is not limited to, the fact that "(A) an occupant of real property is or has been infected with a disease on the list of reportable diseases, emergency illnesses and health conditions issued by the Commissioner of Public Health pursuant to section 19a-2a, or (B) the real property was at any time suspected to have been the site of a death or felony." The category is deliberately narrow and stigma-related. A roof replacement, a disputed encroachment and water in the basement are all physical conditions of the property itself, and the residential condition report prescribed by Section 20-327b asks the seller about each of them by name, which is the clearest signal that Connecticut treats them as facts to be disclosed rather than as nonmaterial ones.

Under C.G.S. Section 20-327g, a seller of residential property who gives the purchaser written notice that a list of local properties used for hunting or shooting sports may be available at the town clerk's office:

• a.Has satisfied the duty to disclose even if the list is inaccurate✓
• b.Becomes liable for any error the town clerk's list contains
• c.Must compile the list if the town clerk has not already done so
• d.Must also obtain the list and attach it to the sales contract

Section 20-327g(a) says that on giving that written notice before or upon entering the contract, "the seller and any real estate licensee shall be deemed to have fully satisfied any duty to disclose the presence of local properties upon which hunting or shooting sports regularly take place, even if (1) the list is not available at the office of the town clerk, or (2) there is an error, omission or inaccuracy in the list." The notice is the whole of the obligation, so requiring the seller to obtain and attach the list adds a step the statute does not. Subsection (c) states expressly that no seller or licensee shall be required to compile or contribute to compiling the list. And subsection (b) says nothing in the section imposes liability for failing to disclose those properties, which is the opposite of the safe harbor being read as a source of liability. Section 20-327f gives the same shape of protection for hazardous waste facility lists.

Under C.G.S. Section 20-312c(d), every advertisement placed by a Connecticut associate broker must include:

• a.A statement that the associate broker owns the brokerage firm
• b.The name of the supervising licensee, at a prominent location✓
• c.The associate broker's license number and the date it was issued
• d.The street address of the office at which the listing file is kept

Section 20-312c(d) requires each associate broker to "comply with all advertising requirements and standards that apply to real estate brokers, and shall include the name of the supervising licensee who controls and supervises such associate broker at a prominent location in all of such associate broker's advertisements." The point is that the consumer can see which brokerage stands behind the advertisement. The subsection names no license number and no issue date, and it asks for no office address; those appear in the registration and record-keeping provisions rather than in the advertising duty. A claim of ownership would be false in the ordinary case, since Section 20-311(3) defines an associate broker as a broker who works on behalf of a supervising licensee. Section 20-312(e)(1) sets parallel naming rules for team advertising.

C.G.S. Section 20-325b requires every written agreement fixing a Connecticut broker's compensation to carry a boldface notice stating that the amount or rate of broker compensation:

• a.Is reviewed and set by the Connecticut Real Estate Commission each year
• b.May not exceed the rate that is customary in the local market
• c.Is not fixed by law and may be negotiable between the parties✓
• d.Is payable only out of the proceeds of the closing of title

Section 20-325b requires the statement, in not less than ten point boldface type or in a manner that otherwise stands out from the surrounding text: "NOTICE: THE AMOUNT OR RATE OF REAL ESTATE BROKER COMPENSATION IS NOT FIXED BY LAW. IT IS SET BY EACH BROKER INDIVIDUALLY AND MAY BE NEGOTIABLE BETWEEN YOU AND THE BROKER." The notice exists precisely to contradict the belief that some authority sets the rate, so an answer naming the commission as the rate-setter states what the statute is written to deny. A ceiling tied to what is customary locally would be the same error in softer form, and agreeing on rates by reference to a market custom raises antitrust exposure of its own. Nothing in the section dictates the source of payment, which the parties fix in their agreement.

Under C.G.S. Section 20-329(11), an unlicensed person employed by a Connecticut broker to perform clerical services may:

• a.Prepare and process paperwork at the broker's direction✓
• b.Negotiate the terms of an agreement with a prospective buyer
• c.Sign as a signatory on the broker's escrow or trust account
• d.List a property for an owner who asks for that help directly

Section 20-329(11) excepts from licensure "any person who is employed by a broker to perform clerical services, which person shall not negotiate the terms of an agreement, list a property unless on behalf of a real estate licensee, open or be listed as a signatory on a broker's escrow or trust account or sell, buy or lease real property for another person for compensation." Clerical support is what the exception permits, and the rest of the sentence is a list of what it forbids. Negotiating terms is the first prohibition in that list. Being a signatory on the trust account is expressly barred, which matters because Section 20-324k makes the broker accountable for that account. And listing a property is allowed only on behalf of a licensee, so taking the listing at an owner's direct request falls outside the exception.