Iowa Real Estate Broker Exam — All Questions

Rule 481-2013.5 requires an Iowa broker to retain transaction records, contracts and closing statements for:

• a.At least two years, after which paper originals may be destroyed
• b.At least five years, and in electronic form if the copies stay legible✓
• c.At least ten years, in paper form only, at the principal place of business
• d.As long as the client asks, with no minimum period set by the rules

Rule 481-2013.5 requires every broker to retain for at least five years true copies of all business books, accounts including voided checks, records, contracts, closing statements, disclosures, signed documents, the listing, any offers to purchase, and all correspondence relating to each transaction handled and each property managed, available for reproduction and inspection during usual business hours. Rule 481-2013.5(3) permits electronic storage where the records can be readily retrieved and printed legibly, and provides that once an original is properly transferred the electronic record is considered the same as the original - so a paper-only rule is wrong, as is a ten-year period. Two years is far too short, and the period is set by rule rather than by what a client requests. The same five years recurs across the rules: rule 481-2011.4 for executed instruments, rule 481-2013.2(2) for trust records and transaction files, rule 481-2012.2(12) for agency disclosures including those with rejected offers, and rule 481-2014.1(2)"c" for property condition disclosures.

When an Iowa salesperson or real estate team advertises to the public, the advertisement must:

• a.Give a street address or post office box for the licensee placing the ad
• b.Display the brokerage name just before or just after the licensee's name✓
• c.Carry the seller's written approval of the wording used in the listing
• d.Show the licensee's license number and the date the license was issued

Section 543B.25 requires that "an individual licensee or real estate team shall conspicuously display the name of the brokerage immediately preceding or immediately following the individual licensee's name or real estate team name in any advertising or information made available to the public," and rule 481-2010.1 repeats it and defines conspicuously as an advertisement a reasonable person could identify or observe. Iowa does not require the license number or issue date in advertising. A street address or box number is the opposite of what the rule wants: "no real estate advertisement can show only a post office box number, telephone number or street address," because the point is that the public must be able to tell a licensee from a private party. The seller's approval of ad copy is a contractual matter, not an advertising rule, though written consent is required before placing a sign on property. Advertising covers signs, letterhead, email, websites, social media, business cards and even brokerage checks, is conducted under the broker's supervision, and a material error must be corrected promptly and within ten calendar days.

An Iowa salesperson resigns from a brokerage. The broker must ensure the commission receives the license:

• a.Within 72 hours of the date the salesperson's last commission is paid
• b.Only after the salesperson has found a new brokerage to affiliate with
• c.Within 72 hours of the termination date, with written notice to the licensee✓
• d.Within 30 days of the termination date, together with the transfer fee

Section 543B.33 requires the broker, on discharge or termination, to immediately deliver, mail or electronically submit to the commission a copy of the salesperson's license showing the date of termination, and to send a communication to the salesperson's last known residence address stating that this has been done, with a copy of that communication accompanying the license. Rule 481-2006.1 puts a clock on it: the releasing broker must make every reasonable effort to ensure the commission receives the electronic application within 72 hours of the discharge or termination date, and "the affiliated broker cannot refuse to comply" with a licensee's written request to return the license. Rule 481-2007.2(4) makes missing that deadline prima facie evidence of a section 543B.33 violation, and rule 481-2018.14(5)"c"(2) lists it as a civil-penalty violation. The duty does not wait on the salesperson finding a new firm or on the last commission check; the licensee must immediately stop all activity requiring an active license until the license is reassigned.

Before an Iowa licensee may show, list, or negotiate the rental of a property, the licensee's broker must hold:

• a.A current written property management agreement signed by the owner✓
• b.A current property manager registration issued by the state of Iowa
• c.A recorded management agreement filed in the county where the property sits
• d.A verbal authorization from the owner confirmed by email to the tenant

Rule 481-2015.1 bars a licensee from renting or leasing real estate, offering or negotiating a rental, listing property for rent, or showing property to prospective renters "unless the licensee's broker holds a current written property management agreement or other written authorization signed by the owner of the real estate or the owner's authorized agent." The authorization must be written and signed, so a verbal instruction confirmed to the tenant does not satisfy it. Nothing is recorded in the county, and Iowa has no separate property manager registration - property management is licensed activity under chapter 543B itself, because section 543B.3(6) reaches anyone who collects or agrees to collect rent for the use of real estate. Rule 481-2015.1(1) lists what the agreement must contain: identification of the property, the terms and the powers given to the broker, when income is remitted and when written statements of income and expenses are provided, which expenses the broker pays to third parties, the fee and when it is paid, the deposits and prepaid rents held, the effective date, the termination terms, and the signatures of broker and owner.

Under rule 481-2015.1, an Iowa broker's property management fees are:

• a.Deducted from each tenant's refundable deposit as the rent is collected
• b.Paid directly from the owner's trust account to the broker at year end
• c.Withheld from the interest that the trust account earns for the state
• d.Withdrawn at least monthly and deposited into the operating account✓

Rule 481-2015.1(7)"d" provides that management fees are withdrawn from the owner's account at least once a month unless the agreement provides otherwise, identified by the property name or account number for which they were earned, and deposited into the broker's business operating account - and then adds the sentence that decides this question: "fees are not paid directly from the owner's trust account to the broker." Waiting until year end fails both halves of the rule. Tenant money is not available for fees either: paragraph "e" requires conditionally refundable deposits to stay in a trust account until refunded or until they accrue to the owner under the tenant's agreement. Nor may a broker take the interest, since paragraph "g" sends it to the state under section 543B.46 absent a separate written agreement and says the property manager does not receive or benefit from it. Paragraph "c" also bars withdrawing more than the owner's remaining credit balance, and rule 481-2015.1(4) requires funds received for the owner to be deposited in trust within five banking days.

When an Iowa property management agreement terminates, the property manager must give the owner:

• a.Unobligated funds within 30 days and a final accounting within 60 days✓
• b.All of the tenant deposits within 10 days and an accounting on request
• c.Unobligated funds and a final accounting at the next annual statement
• d.A final accounting within 30 days and any funds due within 120 days

Rule 481-2015.1(5)"c" requires the property manager to provide the owner, not later than 30 days after the effective date of the termination, with any unobligated funds due under the agreement, and not later than 60 days after that date, a final accounting of the owner's ledger account, the amount of any obligated funds still held in the client trust account, a statement explaining why they are held, and a statement of when and to whom they will be disbursed. Reversing the two deadlines gets the order backwards - the money moves first and the accounting follows. Tenant deposits are not simply handed to the owner on a ten-day clock: paragraph "e" requires the manager to notify each tenant immediately that the conditionally refundable deposit is being transferred to the owner or to a new manager and to give that party's name and address. And the annual statement required by rule 481-2015.1(1)"c" is a running obligation during the agreement, not the deadline for winding it up. Unobligated funds may go only to the owner, or with the owner's written authorization to a new property manager the owner designates.