Iowa Real Estate Broker Exam — All Questions

In Iowa, the licensee responsible for a brokerage firm's licensed activity and trust account is the:

• a.Listing coordinator for the office
• b.Most senior salesperson in the office
• c.Designated broker who acts for the firm✓
• d.Outside accountant retained by the firm

Section 543B.5(12) defines the designated broker as "a licensee designated by a real estate brokerage agency to act for the agency in conducting real estate brokerage services," and section 543B.62(3)"b" makes a broker responsible for supervising every salesperson or broker associate employed by or associated with the broker, adding that an independent contractor relationship or a special compensation arrangement does not relieve anyone of that duty. Section 543B.46 puts the common trust account in the broker's name and under the broker's control, and rule 481-2013.3 bars a salesperson from handling a closing except under the direct supervision or with the consent of the employing broker. Seniority confers nothing: a salesperson cannot hold the supervisory role no matter how experienced, and rule 481-2007.1(7) requires every actively licensed broker associate and salesperson to be licensed under a broker. A listing coordinator and an outside accountant are typically unlicensed support personnel, who under rule 481-2007.13 may perform only ministerial duties that require no discretion or licensee judgment.

A supervising Iowa broker discovers that a licensee failed to deliver the required property condition disclosure to a buyer. The broker should:

• a.Wait until after the closing to raise the issue with the licensee
• b.Do nothing, because the disclosure is solely the seller's concern
• c.Ensure the disclosure is delivered and address the licensee's conduct✓
• d.Cancel the transaction and hold the earnest money as a broker fee

Section 543B.62(3)"b" makes the broker responsible for supervising affiliated licensees, and rule 481-2014.1(2) puts the delivery duty squarely on the licensee representing the seller, so the right move is to get the disclosure delivered and then deal with the licensee's compliance failure. Doing nothing on the theory that disclosure is solely the seller's concern ignores both the licensee's part in delivering it and the broker's answerability for that licensee; rule 481-2018.14(5)"m" lists failure by a broker to supervise among the violations for which a civil penalty may be imposed. Canceling the transaction and keeping the earnest money would compound the problem, because rule 481-2013.1(9) forbids the broker from withholding any part of the earnest money when a transaction fails. Waiting until after closing destroys the buyer's statutory remedy: under section 558A.2(2) a late-delivered disclosure lets the buyer withdraw the offer or revoke the acceptance without liability within three days of personal delivery or five days of mail or electronic delivery.

An Iowa broker may pay an earned commission to a corporation wholly owned by an affiliated salesperson only if:

• a.The corporation performs no act that requires a real estate license✓
• b.The commission approves the arrangement in writing before it is paid
• c.The salesperson also holds a broker associate license under the broker
• d.The corporation is separately licensed as a real estate brokerage firm

Section 543B.34(1)"e" makes it sanctionable for a salesperson or broker associate to accept compensation for licensed acts from anyone except the employing broker, who must be a licensed real estate broker. Subparagraph 543B.34(1)"i"(2) creates the narrow exception and states its conditions: the corporation must be wholly owned by the salesperson or broker associate, or owned with a spouse; "the corporation does not engage in real estate transactions as a third-party agent or in any other activity requiring a license under this chapter"; the employing broker is not relieved of any obligation to supervise; and the licensee is not relieved of personal civil liability by interposing the corporate form. The corporation is precisely not licensed - licensing it would defeat the first condition. Nothing turns on which class of license the affiliated licensee holds, and the Iowa Real Estate Commission gives no advance written approval for the arrangement.

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.