Idaho Real Estate Broker Exam — All Questions

Under Idaho Code 54-2038, the designated broker of an Idaho brokerage company is responsible for:

• a.Supervising the firm's licensees and its trust account✓
• b.Setting the commission rates charged across the market
• c.Appraising each property the office takes as a listing
• d.Approving each associate's application to the Commission

Idaho Code 54-2038 opens by placing on the designated broker the requirement that the brokerage be conducted in compliance with the license law and the brokerage representation act, and makes the broker "responsible for the actions of its licensees and associated unlicensed persons performed within the course and scope of their employment or agency, regardless of the location of the company's business." Subsection (1)(a) requires supervision and control of all office locations and all associated licensees and unlicensed persons, and 54-2041(1) makes the broker responsible for money entrusted to the broker or to any licensee representing the broker. Commission rates are negotiated in each engagement; neither a firm nor the state sets them across a market. Appraisal is separate work with its own credential, and 54-2038(3) limits a broker to a broker price opinion rather than an appraisal. License applications are decided by the Commission under 54-2012, not by the supervising broker.

Idaho Code 54-2038(1)(b) requires the designated broker to review and approve:

• a.Only the agreements on which the brokerage earns a fee
• b.All listing, purchase and brokerage representation agreements✓
• c.Only agreements written by newly licensed sales associates
• d.Only agreements in which entrusted funds exceed ten thousand dollars

Idaho Code 54-2038(1)(b) requires the designated broker to "review and approve all real estate agreements including, but not limited to, those related to listing, selling or purchasing property and brokerage representation agreements." The duty is written without qualification, and each of the three narrowing options invents a limit the sentence does not contain — by fee, by the associate's experience, or by dollar threshold. The review duty is what makes the delivery deadlines workable: 54-2051(3) puts a copy of any signed document in the broker's office before the end of the next business day and 54-2050(4) does the same for signed representation agreements, precisely so the broker can perform this review while the transaction is live. Subsection (1)(c) reinforces it by requiring the broker to remain reasonably available during business hours to manage and supervise, so as to prevent or curtail practices that would violate the chapter.

An Idaho broker terminates a sales associate for a disciplinary violation. Under Idaho Code 54-2056(3), the broker must notify the Commission in writing within:

• a.Three business days of the termination
• b.Ten business days of the termination✓
• c.Thirty calendar days of the termination
• d.The licensee's next scheduled renewal cycle

Idaho Code 54-2056(3) provides that any broker who terminates an associate for violating sections 54-2059 through 54-2065 shall, "within ten (10) business days of the termination, notify the commission, in writing, of the termination and the facts giving rise to the termination." Three business days is the separate clock in 54-2056(1) for the written notice the broker and the associate owe each other on any termination, whatever the reason, and confusing the two is the trap here. Thirty days and the renewal cycle appear nowhere in the section. Idaho Code 54-2079 states the reporting duty a second time for violations of 54-2060 through 54-2062, requiring the broker to "promptly file a written statement of the facts in reference thereto with the commission." The broker must also submit a written application in the Commission's form for each associate who licenses with the brokerage under 54-2056(2).

An Idaho broker is otherwise qualified to do business but cannot manage and supervise an office. Idaho Code 54-2038(2) allows that person to be licensed as:

• a.An inactive broker, with associates licensed under the broker
• b.A branch manager, responsible for one licensed location
• c.A limited broker, with no associates licensed under the broker✓
• d.A cooperative licensee, renewable once each calendar year

Idaho Code 54-2038(2) provides that "a broker who is otherwise qualified to do business in Idaho, but is not able to manage and supervise according to this section, may be licensed as a 'limited broker' in Idaho and shall not have any sales associates licensed under that broker." Definition 54-2004(30) repeats it. The inactive option contradicts itself: under 54-2018(4) an inactive licensee may not engage in the business at all, so no associate could be licensed under one. A branch manager is a different role, and 54-2016(4)(b) requires that person to be an associate broker who regularly occupies and supervises the branch — supervision is the job, not an exemption from it. A cooperative license under 54-2017 is for an out-of-state broker working one Idaho commercial transaction with an Idaho broker; it lasts twelve months and 54-2017(2) says it may not be renewed.

Before being designated, the designated broker of an Idaho business entity must have completed a commission-approved business conduct and office operations course within:

• a.One year immediately prior to the designation
• b.Two years immediately prior to the designation
• c.Three years immediately prior to the designation✓
• d.Five years immediately prior to the designation

Idaho Code 54-2016(1)(b) requires that the individual designated broker "shall, within three (3) years immediately prior to the designation, satisfactorily complete a commission-approved business conduct and office operations course." The same three-year window appears in 54-2016(2)(c) for a sole proprietor broker, in 54-2016(4)(b) for a branch manager, and in 54-2023(1)(b) for an inactive broker activating as a designated broker or branch manager, so one figure covers every route into the role. One, two and five years are simply not the period the chapter uses. The course is broker-specific, which is why the Pearson VUE candidate handbook lists the business conduct and office operations course among the Idaho resources marked for broker candidates only. It is separate from the continuing education required at renewal under 54-2023(1).

To be the designated broker of an Idaho limited liability company, the individual must hold which position in it?

• a.A salaried employee
• b.A general partner
• c.A registered agent
• d.A member or a manager✓

Idaho Code 54-2016(1)(c) requires the individual designated broker to hold a specific legal position in the licensed entity: an officer of a corporation, a general partner of a partnership or limited partnership, or a member or manager of a limited liability company. For an LLC the answer is member or manager. General partner is the right answer for the wrong entity — it belongs to a partnership, and reading it across is the common error. A registered agent merely receives service of process for the entity and has no management authority. Salaried employment says nothing about the authority the statute demands, and 54-2016(1)(c) requires the designated broker to have full authority to act on behalf of the entity and to submit proof of it, including a list of the entity's officers, directors, members or managers. All acts of that individual as designated broker are considered acts of the licensed business entity.

An Idaho brokerage corporation's designated broker resigns. Under Idaho Code 54-2039(2), the entity may designate a qualified replacement within:

• a.Five business days, after which its license is suspended
• b.Ten business days, after which its license is terminated✓
• c.Thirty calendar days, after which its license is terminated
• d.Ninety calendar days, after which its license is suspended

Idaho Code 54-2039(2) provides that where the designated broker's license is refused, revoked, suspended or made inactive, or the individual surrenders the license or ceases to be connected with the entity, "the business entity shall have ten (10) business days in which to designate another qualified individual as designated broker before the entity's license is terminated, and the licenses of all associated licensees are made inactive." The identical sentence appears in 54-2016(1)(d). Note both halves of the consequence: the entity's license terminates rather than being suspended, and every associated licensee goes inactive with it. Five business days, thirty days and ninety days are not the chapter's figures. Under 54-2039(3) no change of designated broker takes effect until the Commission receives and approves written notice, and under 54-2039(4) the original designated broker remains responsible for trust funds, pending transactions and records in the meantime.

Under Idaho Code 54-2016(4), a separate branch office license is required only where the branch:

• a.Employs more than five licensed sales associates
• b.Advertises under a name different from the main office
• c.Maintains trust funds or original transaction files✓
• d.Sits in a county other than the one holding the main office

Idaho Code 54-2016(4) requires that "each branch office in which trust funds and original transaction files are maintained shall be separately licensed," and subsection (4)(e) states the converse plainly: "no separate branch office license or manager is required for business locations other than the main office unless trust funds or original transaction records are kept at the branch." Headcount, geography and county lines are not the test. A different business name is not merely irrelevant but forbidden — 54-2016(3) allows only one business name per entity and 54-2016(4)(g) requires every location to conduct business in the licensed name. Where a branch is licensed, 54-2016(4)(b) requires a branch manager who is an associate broker and who has completed the business conduct and office operations course within the prior three years, 54-2016(4)(c) bars managing more than one branch, and 54-2016(4)(f) keeps the records for any separate branch trust account at that branch.

The Commission audits an Idaho designated broker's real estate trust account and finds an irregularity it cannot resolve with the broker. Under Idaho Code 54-2058(2), the Commission may order:

• a.The depository to close the account without further notice
• b.The balance forfeited to the real estate recovery fund
• c.A complete audit by its own staff, paid for by the state
• d.A complete audit by a certified public accountant, at the broker's expense✓

Idaho Code 54-2058(2) vests the Commission with authority to conduct periodic inspections, surveys and audits of the transaction records and trust accounts of all Idaho licensed designated brokers, and provides that "if the analysis of a broker's real estate trust account indicates a deficiency or any irregularity which cannot be resolved between the commission and the broker, the commission may order a complete audit of the trust account by a certified public accountant at the broker's expense." Who pays is part of the rule, so the state-funded in-house option is wrong on both the auditor and the bill. Closing the account is not a power the section gives, and the Commission does not direct depositories. The real estate recovery fund under 54-2069 pays claimants who hold unsatisfied judgments for fraud, misrepresentation or deceit, up to $10,000 per licensee per calendar year under 54-2071(1); it is not a place client money is forfeited to. The same subsection requires the broker to produce out-of-state records promptly, at the licensee's own cost.

In an Idaho cooperative sale, which broker is the responsible broker accountable to the Commission for the transaction records and the closing?

• a.The broker whose associate first showed the buyer the property
• b.The broker who holds the entrusted funds in the trust account✓
• c.The broker whose associate drafted the offer that was accepted
• d.The broker the escrow closing agent designates at the closing

Idaho Code 54-2048 makes the broker who lists and sells the property the responsible broker, then addresses the cooperative sale directly: "in the case of a cooperative sale, the broker who holds entrusted funds in a real estate trust account while the transaction is pending, or who delivers or transfers the funds to the closing agency or any authorized party other than the cooperating broker in the transaction, shall be deemed the broker responsible for the transaction." Custody of the money is the test, not who showed the property or who wrote the offer, and the closing agent has no power to designate anyone. The consequences are substantial: under 54-2048(1) that broker must ensure the correctness and delivery of detailed closing statements to both buyer and seller even where a title company closes, under 54-2048(2) must show proof of delivery by signature or certified mail, and under 54-2048(3) must keep the transaction file for the retention period in 54-2049.