Idaho Real Estate Broker Exam — All Questions

Idaho Code 54-2053 requires all advertising of listed property to contain, clearly and conspicuously:

• a.The broker's licensed business name✓
• b.The listing associate's personal telephone number
• c.The property's assessed value for the current tax year
• d.The commission rate the seller agreed to pay

Idaho Code 54-2053(2) states that "all advertising of listed property shall clearly and conspicuously contain the broker's licensed business name," and subsection (3) extends the same rule to branch offices. The point is that a consumer reading an advertisement can always identify the licensed firm standing behind it. A personal telephone number identifies an individual rather than the licensed entity and is nowhere required. Assessed value is a county assessor's figure under Title 63 and has no place in the advertising rule; publishing it as though it were market value would risk the misleading-information standard in 54-2053(4). The commission rate is negotiated between broker and client and is not disclosed to the public. Note also that a new business name may not be used in advertising until the Commission approves the change.

An Idaho broker's website names several people who market Idaho property. Idaho Code 54-2053(1) permits naming only those who are:

• a.Members of the local association of Realtors
• b.Actively licensed in Idaho✓
• c.Employed full time rather than part time
• d.Residents of the county where the property lies

Idaho Code 54-2053(1) provides that "only licensees who are actively licensed in Idaho may be named by an Idaho broker in any type of advertising of Idaho real property, may advertise Idaho property in Idaho or may have a sign placed on Idaho property." Active Idaho licensure is the whole test. Association membership is private and voluntary and confers no authority to advertise Idaho property. Full-time status is not a licensing category at all; it appears in the chapter only in 54-2016(4)(b), where full-time work elsewhere raises a presumption that a branch manager cannot supervise. County residency is not required anywhere in the chapter, and a licensee's license is statewide. An unlicensed assistant or an out-of-state licensee without an Idaho license therefore may not be named in the advertisement.

An Idaho sales associate ends her licensed association with her broker. She must give the broker written notice of the termination no later than:

• a.Three business days after the effective date✓
• b.Ten business days after the effective date
• c.Thirty calendar days after the effective date
• d.The close of the current license period

Idaho Code 54-2056(1) requires a sales associate who terminates a licensed association to "provide the broker written notice of the termination no later than three (3) business days after the effective date," and imposes the mirror-image duty on a broker who terminates an associate. Ten business days is the separate clock in 54-2056(3) for notifying the Commission when the termination is for cause, and thirty days and the end of the license period appear nowhere in the section. The statute also warns that written notice to the Commission does not relieve either licensee of the duty to notify the other. Under 54-2056(5) the departing associate must immediately turn over listings, keys, contracts and other property belonging to the broker.

An Idaho sales associate may accept a commission for licensed activity from:

• a.The buyer, paid directly at the closing table
• b.The title company that handles the escrow
• c.The broker with whom the associate is licensed✓
• d.Any Idaho broker who took part in the sale

Idaho Code 54-2054(9) provides that "no sales associate shall accept any commission, compensation or fee for the performance of any acts requiring a real estate license from any person except the real estate broker with whom the sales associate is licensed." Payment direct from the buyer bypasses the broker who is accountable for the transaction, and the same objection defeats payment from the title company, which merely disburses what the closing statement directs. Payment from any participating broker fails too: a cooperating broker pays the associate's own broker, not the associate. The narrow exceptions in the same subsection let an associate share with another associate of the same broker if the broker authorizes it, and take payment from an unlicensed entity the broker paid under 54-2054(2).

An Idaho broker intends to be paid by both the buyer and the seller in one transaction. Idaho Code 54-2054(7) allows this only if the broker first:

• a.Obtains the Commission's written approval of the arrangement
• b.Makes full disclosure in writing to all parties involved✓
• c.Reduces each of the two fees by one half
• d.Records the fee arrangement with the county recorder

Idaho Code 54-2054(7) states that no licensee "shall charge or accept compensation from more than one (1) party in any one (1) transaction, without first making full disclosure in writing of the broker's intent to do so, to all parties involved in the transaction." Disclosure in writing, in advance, to everyone, is the entire condition. The Commission does not pre-approve individual fee arrangements; it disciplines licensees who fail to disclose them. Halving the fees changes the amount but not the conflict, and the statute conditions the practice on disclosure rather than on price. Recording is for instruments affecting title under 55-813, not for compensation agreements. A related rule in 54-2054(6) requires written disclosure before closing of any rebate or fee a licensee will receive from a service provider.

Idaho Code 54-2049 requires a broker to keep transaction files, trust ledgers and reconciliation records for:

• a.One calendar year after the year the event occurred
• b.Three calendar years after the year the event occurred✓
• c.Five calendar years after the year the event occurred
• d.Seven calendar years after the year the event occurred

Idaho Code 54-2049 requires the listed records to be "kept by a broker for three (3) calendar years after the year in which the event occurred, the transaction closed, all funds were disbursed, or the agreement and any written extension expired." The list itself is worth memorizing: accepted, countered and rejected offers; listing and buyer representation agreements and consent-to-limited-dual-representation forms; transaction files; trust account ledger records; and all trust account reconciliation records. One year is shorter than the statute allows and would destroy records while the Commission could still audit them. Five and seven years are longer than the statute requires; seven years is the property-tax recovery period in 63-602G(6), not a real estate retention rule. The clock runs from the end of the year, not the date of the event.

An Idaho sales associate obtains a seller's signature on a counteroffer. A true and legible copy must reach the designated broker's office:

• a.Before the end of the next business day✓
• b.Within three business days of the signing
• c.Within ten business days of the signing
• d.At the time the transaction closes

Idaho Code 54-2051(3) provides that upon obtaining any document signed by a buyer or seller, "a sales associate shall provide a true and legible copy of such document to the designated broker or broker's office prior to the end of the next business day," and the same subsection requires a fully executed purchase and sale agreement, counteroffer or addendum to go to both the buyer and the seller as well. Three and ten business days would leave the broker who answers to the Commission for the file unaware of a live document for most of a week. Waiting until closing is worse still, since the broker must review and approve agreements under 54-2038(1)(b) while the deal is alive. The identical next-business-day rule applies to signed brokerage representation agreements under 54-2050(4).

A buyer hands an Idaho salesperson an earnest-money check along with a written offer. Idaho Code 54-2045(4) requires the salesperson to:

• a.Deposit it in her own account and remit to the broker
• b.Hold it until the seller accepts, then mail it to the seller
• c.Endorse it over to the title company named in the offer
• d.Deliver it immediately to the broker or the broker's office✓

Idaho Code 54-2045(4) provides that "all consideration, including cash, checks held in uncashed form and promissory notes, received by a sales associate in connection with a real estate transaction shall be immediately delivered to the broker or the broker's office." An associate never holds client money in a personal account; under 54-2041 the broker is responsible for everything entrusted to any licensee representing the broker. Holding the check until acceptance is a decision about deposit timing, not delivery: 54-2045(2) does permit a check to be held uncashed, but only with written instructions in the offer, and the associate must still get it to the broker first. Endorsing it to the title company requires the written instruction of both parties under 54-2041(1), which an unaccepted offer has not yet produced.

An Idaho broker receives entrusted money and has no written instruction to do otherwise. Idaho Code 54-2045(1) requires deposit:

• a.On or before the banking day immediately following receipt✓
• b.Within three banking days after the day of receipt
• c.Within five banking days after the day of receipt
• d.On or before the day the transaction is scheduled to close

Idaho Code 54-2045(1) states that "all moneys received by a broker for another in a real estate transaction are to be deposited on or before the banking day immediately following the receipt day of such funds, unless written instructions signed by the party or parties having an interest in the funds direct the broker to do otherwise." Three and five banking days are longer windows the statute does not grant, and holding funds until closing would leave client money outside a trust account for the life of the transaction. The only lawful delay is the written instruction the statute names — typically a direction in the purchase and sale agreement to hold the check uncashed until the seller accepts. Note that 54-2041(2) states the general rule even more sharply: "immediately upon receipt, the broker shall deposit entrusted moneys in a neutral, qualified trust fund account."

An Idaho broker who manages rentals for several owners must hold the rents and security deposits:

• a.In the brokerage operating account with a monthly summary
• b.In each owner's own bank account under that owner's name
• c.In a real estate trust account with a ledger for each owner✓
• d.In an interest-bearing account with the interest paid to the broker

Money a broker holds for another in a regulated real estate transaction goes into a real estate trust account under Idaho Code 54-2041 and 54-2045, and 54-2044(2) requires an individual trust ledger to be created "whenever a broker, or any licensed or unlicensed person representing the broker, receives earnest money or other consideration," showing the parties, the property, each deposit and disbursement and the current balance. A pooled operating account fails twice: 54-2041(3) forbids commingling entrusted money with the broker's own, and a summary is not the ledger the statute describes. Leaving funds in the owner's personal account puts them outside the broker's control, yet 54-2041(5) keeps the broker accountable until a full accounting is given. Interest is the sharpest error: 54-2042(1) requires trust accounts to be noninterest-bearing, and the single-transaction exception in 54-2043 needs both parties' written direction and a written agreement on who receives the interest.

Idaho Code 54-2042(7) caps the broker's own funds held in a real estate trust account at:

• a.One hundred dollars
• b.Three hundred dollars✓
• c.One thousand dollars
• d.Two thousand five hundred dollars

Idaho Code 54-2042(7) permits a broker to deposit firm funds "for the purpose of opening and maintaining the account and for the payment of anticipated bank service charges," then sets the limit: "in no event shall the balance of broker or firm funds in the account exceed three hundred dollars ($300)." The same subsection adds that those maintenance funds may not be disbursed for any purpose other than bank charges levied directly on the trust account. One hundred dollars is below the figure the statute allows and would understate what a broker may lawfully keep on deposit; one thousand and two thousand five hundred exceed the cap and would be commingling under 54-2041(3). Idaho also requires a separate maintenance-fund ledger for these dollars under 54-2044(1), filed with the broker's current open ledgers and kept current at all times.

An Idaho seller has already accepted an offer when a second written offer arrives before closing. The listing broker must:

• a.Present the second offer only if it beats the accepted price
• b.Hold the second offer unless the pending transaction collapses
• c.Return the second offer because the property is under contract
• d.Tender the second offer to the seller as promptly as practicable✓

Idaho Code 54-2051(1) requires a broker or sales associate "as promptly as practicable, to tender to the seller every written offer to purchase obtained on the real estate involved, up until time of closing," and adds that a purchase and sale agreement signed by a prospective buyer "shall be deemed in all respects an offer to purchase." The phrase "up until time of closing" is what decides this item: an accepted offer does not switch the duty off. Holding the offer in reserve, returning it, and screening it against the accepted price all substitute the licensee's judgment for the seller's, and the client is entitled under 54-2087(3) to receive and timely consider all written offers. Whether the seller may accept a second offer is a contract question for the seller and the seller's lawyer, not a reason to withhold it.

A transaction collapses and both parties demand the earnest money the Idaho broker holds. Idaho Code 54-2047 first requires the broker to:

• a.Notify each party in writing of the other party's demand✓
• b.Deposit the money with the Idaho Real Estate Commission
• c.Divide the deposit equally and close out the ledger
• d.File an interpleader action in the district court

Idaho Code 54-2047(1) requires that whenever more than one party makes demand on funds the broker holds, the broker shall "notify each party, in writing, of the demand of the other party" and keep all parties informed of any action taken with the disputed money. Written notice comes first; only then do the options in subsections (2) and (3) open up. The Commission regulates and audits trust accounts under 54-2058(2) but is not a depository, so sending it the money would leave no one accountable for the deposit. Splitting the money down the middle substitutes the broker's convenience for the contract; 54-2047(2) lets the broker disburse only by reasonably relying on the terms of the purchase and sale agreement, and warns that even a proper discretionary disbursement may still expose the broker to civil liability. Interpleader is the parties' or a court's route, while the broker may simply hold the funds under 54-2047(3) pending a court order.

An Idaho designated broker moves the brokerage to a new location without notifying the Commission. Under Idaho Code 54-2040(1):

• a.The license previously issued is automatically inactivated✓
• b.A late fee accrues but the license remains in full force
• c.Nothing occurs until the next scheduled license renewal
• d.The branch manager becomes the responsible broker instead

Idaho Code 54-2040(1) requires each designated broker to maintain a definite, physical place of business, requires written notice to the Commission of any change of business name, location or mailing address, and then states the consequence plainly: "a change of business name or location without notification to the commission shall automatically inactivate the license previously issued." The same subsection bars using a new location as the main office until the Commission acknowledges proper notice. A late fee is the mechanism 54-2018(3) uses for a late renewal, not for an unreported move. Waiting for the renewal cycle would let an unlocatable brokerage keep trading. And nothing in the chapter transfers the designated broker's responsibility to a branch manager; under 54-2039(4) the original designated broker remains responsible for trust funds, pending transactions and records.

An Idaho broker pays the brokerage's office rent out of money held in the real estate trust account. This is:

• a.Permitted, if the broker restores the funds before closing
• b.Permitted, because the broker controls the trust account
• c.A violation of license law and grounds for discipline✓
• d.A private matter between the broker and the depository

Idaho Code 54-2046 states that all funds "must be disbursed from the real estate trust account only in accordance with this section" and that "failure to comply with this section is a violation of license law and will subject the broker to discipline"; subsection (1) permits no disbursement at all without written, signed authorization from the parties or a court order. Office rent has neither. Restoring the money later does not cure the disbursement, and 54-2060(3) makes failure to account for or remit money belonging to another an independent ground for discipline. Control of the account is exactly why the duty attaches: under 54-2042(3) the account is under the broker's full control and under 54-2041(5) the broker remains accountable until a full accounting is given. And this is not a private banking dispute — 54-2058(2) gives the Commission authority to audit the account and 54-2059(1) to revoke the license.