Florida Real Estate Broker Exam — All Questions

Under an exclusive agency listing, the seller owes the listing broker a commission if the property is sold by:

• a.Anyone at all, including the seller acting without a broker
• b.The listing broker or the seller, but not by any other broker
• c.The listing broker only, and by no other person at all
• d.The listing broker or any other broker, but not by the seller alone✓

An exclusive agency listing appoints one broker as the seller's exclusive agent, so a commission is earned if any broker procures the buyer, but the seller retains the right to sell the property personally without paying a commission. That reserved right is the single feature distinguishing it from the exclusive right of sale listing, under which the broker is paid no matter who sells, including the seller. An open listing pays only the broker who actually procures the buyer and leaves the seller free to give the same terms to any number of brokers. Section 475.25(1)(r), F.S., governs the contents of all written listing agreements.

Section 475.25(1)(r), F.S., requires a written Florida listing agreement to contain a definite expiration date and requires the broker to give the principal a signed copy within:

• a.48 hours of obtaining the written listing agreement
• b.24 hours of obtaining the written listing agreement✓
• c.72 hours of obtaining the written listing agreement
• d.10 days of obtaining the written listing agreement

Section 475.25(1)(r), F.S., makes it a ground for discipline if a broker fails to include in any written listing agreement a definite expiration date, a description of the property, the price and terms, the fee or commission, and a proper signature of the principal, or fails to give the principal a legible, signed, true and correct copy within 24 hours of obtaining the agreement. The same paragraph forbids a provision requiring the person signing the listing to notify the broker of an intention to cancel after the definite expiration date, which is how the statute bars automatic renewal clauses that would extend a listing indefinitely.

A Florida broker's entitlement to a commission under an open listing generally depends on the broker being:

• a.The first broker to show the property to any prospective buyer
• b.The broker who entered the property into the local MLS
• c.The broker holding the buyer's escrow deposit at closing
• d.The procuring cause of a ready, willing, and able buyer✓

Under an open listing the seller pays only the broker whose efforts actually produced the sale, so entitlement turns on procuring cause: an uninterrupted chain of events, begun by the broker, that leads the buyer to purchase on the seller's terms. The buyer must be ready, willing, and able, meaning both prepared to buy and financially capable. Merely being first to show the property does not establish procuring cause if another broker's efforts closed the sale, entering a listing in the MLS is a marketing step rather than proof of causation, and holding the escrow deposit is a custodial function unrelated to who earned the fee.

Under s. 475.25(1)(h), F.S., and rule 61J2-10.028, F.A.C., a Florida broker may lawfully share brokerage compensation with:

• a.A party to the transaction, with full disclosure to all parties✓
• b.An unlicensed person who referred the buyer to the brokerage
• c.An unlicensed assistant who arranged the property showings
• d.An unlicensed inspector who examined the property for the buyer

Rule 61J2-10.028(2), F.A.C., provides that the sharing of brokerage compensation by a licensee with a party to the real estate transaction, with full disclosure to all interested parties, is not a violation of chapter 475, part I. That is the familiar commission rebate to a buyer or seller. Section 475.25(1)(h), F.S., otherwise prohibits sharing a commission with, or paying a fee to, a person not properly licensed as a broker, broker associate, or sales associate under the laws of this state for the referral of real estate business or for any of the services in s. 475.01(1)(a), F.S. It does allow a Florida broker to pay a referral fee to a broker licensed under the laws of a foreign state or nation.

Under the Commercial Real Estate Sales Commission Lien Act, a Florida broker's lien for an earned commission attaches to:

• a.The commercial real property itself, ahead of a recorded mortgage
• b.The owner's net proceeds from the disposition, not the real property✓
• c.The commercial real property itself, behind a recorded mortgage
• d.The buyer's loan proceeds held by the closing agent at closing

Section 475.703(1), F.S., grants a broker a lien upon the owner's net proceeds from the disposition of commercial real estate for any commission earned under a brokerage agreement, and it states expressly that the lien is a lien upon personal property, attaches to the owner's net proceeds only, and does not attach to any interest in real property. That design keeps the broker's claim out of the chain of title and away from priority fights with mortgagees, which is why all three property-based choices are wrong. Section 475.709, F.S., directs the closing agent to reserve the claimed amount from the owner's net proceeds when a commission notice has been properly delivered or recorded.

A Florida sales associate helping a buyer prepare an offer on a preprinted, approved contract form may:

• a.Draft an added clause creating a new financing condition
• b.Fill in the blanks with the terms the parties have agreed on✓
• c.Advise the buyer on the legal effect of the title exceptions
• d.Prepare a deed conveying the property at the buyer's request

A Florida licensee may complete a preprinted, approved contract form by filling in the blanks with the business terms the parties have negotiated, because that is incidental to the brokerage service the licensee is licensed to perform. Composing original contract language, counseling a party on the legal consequences of title exceptions, and drafting instruments of conveyance such as deeds are all the practice of law. A licensee who crosses that line risks discipline under s. 475.25(1)(b), F.S., for violating a duty imposed by law, in addition to the separate consequences of unauthorized practice. The right response to a legal question is to refer the customer to an attorney.

Under s. 725.01, F.S., which agreement must be in writing and signed to be enforceable in Florida?

• a.A buyer's oral instruction to submit a written offer today
• b.A lease of real property for a term of exactly 6 months
• c.An oral agreement to pay a cooperating broker a referral fee
• d.A lease of real property for a term longer than 1 year✓

Section 725.01, F.S., Florida's statute of frauds, provides that no action shall be brought upon any contract for the sale of lands, tenements or hereditaments, or of any uncertain interest in or concerning them, or for any lease thereof for a period longer than 1 year, unless the agreement is in writing and signed by the party to be charged. A six-month lease falls below that threshold and may be oral. The statute reaches contracts for the sale of land and longer leases rather than every real estate related promise, so an oral fee arrangement between brokers and an oral instruction to a licensee are outside its terms even though both are unwise.

Section 689.261, F.S., requires a buyer of Florida residential property to be given a disclosure summary warning that the buyer should not rely on:

• a.The seller's current insurance premium as the buyer's future cost
• b.The seller's current mortgage balance as the property's market value
• c.The seller's current utility bills as the buyer's monthly expense
• d.The seller's current property taxes as the amount the buyer will owe✓

Section 689.261(1), F.S., requires that a prospective purchaser of residential property be presented a property tax disclosure summary at or before execution of the contract for sale, either included in the contract or attached as a separate summary. The prescribed language warns that the buyer should not rely on the seller's current property taxes as the amount of property taxes the buyer may be obligated to pay in the year subsequent to purchase. The warning exists because a change of ownership triggers reassessment, so the homestead assessment cap the seller enjoyed does not carry over. Insurance, mortgage balance, and utilities are not the subject of this statutory summary.

Under Florida's Johnson v. Davis rule, a seller of a home must disclose facts that:

• a.Materially affect value, are known to the seller, and are readily observable
• b.Are known to the seller, whatever their effect on the property's value
• c.Materially affect value, are known to the seller, and are not readily observable✓
• d.Would affect a buyer's decision, whether or not the seller knew of them

Johnson v. Davis, 480 So. 2d 625 (Fla. 1985), holds that where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them. All three elements matter: the fact must be known to the seller, it must materially affect value, and it must not be readily observable. A defect the buyer can plainly see needs no disclosure, a known fact that does not affect value falls outside the duty, and a seller cannot be charged with disclosing something the seller never knew. Section 475.278, F.S., imposes a parallel duty on licensees.

Under s. 689.25, F.S., which fact is not a material fact that must be disclosed in a Florida real estate transaction?

• a.That the roof leaks badly whenever it rains heavily
• b.That a homicide occurred in the house some years ago✓
• c.That the foundation has visible structural cracking
• d.That an open building permit covers unfinished work

Section 689.25(1)(b), F.S., provides that the fact that a property was, or was at any time suspected to have been, the site of a homicide, suicide, or death is not a material fact that must be disclosed in a real estate transaction, and paragraph (1)(a) says the same of an occupant infected with HIV or diagnosed with AIDS. The statute also bars a cause of action against an owner or agent for failing to disclose those facts. The protection is narrow and covers stigma rather than condition: a leaking roof, an open permit, and cracked foundations are physical and legal conditions that materially affect value and fall under the Johnson v. Davis duty.

Section 404.056(5), F.S., requires that radon gas notification be provided on at least one document executed at or before:

• a.The closing of the sale, or the tenant's occupancy of the premises
• b.The first showing of the building to a buyer or prospective tenant
• c.The contract for sale and purchase, or execution of a rental agreement✓
• d.The listing of the building with a Florida real estate brokerage

Section 404.056(5), F.S., titled Notification on Real Estate Documents, requires notification on at least one document, form, or application executed at the time of, or prior to, contract for sale and purchase of any building or execution of a rental agreement for any building, and it prescribes the exact language beginning RADON GAS. Because the notice must come at or before the contract, giving it at closing or on taking occupancy is too late, while requiring it at first showing or at listing is earlier than the statute demands. The requirement does not apply to residential transient occupancy of 45 days or less.