Kansas Real Estate Broker Exam — All Questions

A Kansas firm runs a primary office and one branch office. Under K.S.A. 58-3035, the licensee responsible for the branch is:

• a.The supervising broker, who answers for every office of the firm
• b.The branch broker, a designation separate from supervising broker✓
• c.Any associate broker assigned there, with no separate designation
• d.The office manager on site, whether or not that person is licensed

Kansas separates the two supervisory roles by definition rather than by practice. K.S.A. 58-3035(p) defines a supervising broker as an individual, other than a branch broker, who has a broker's license and has been designated as responsible for the supervision of the primary office and the salespersons and associate brokers assigned to that office. K.S.A. 58-3035(d) defines a branch broker as a broker designated to supervise a branch office and the licensees assigned to it, and K.S.A. 58-3060(b) puts the two together: a supervising broker is designated for the primary office, and each additional place of business is a branch office with a branch broker designated to supervise it. So the first option states the very thing the definition excludes with the words 'other than a branch broker.' An associate broker holds a broker's license and can be designated a branch broker, but the designation is what creates the responsibility, and K.S.A. 58-3060(c) requires the supervising broker to notify the Commission in writing within five days of any change in who is designated. An unlicensed manager cannot fill either role, because supervising licensed activity is itself licensed activity.

A Kansas supervising broker wants to do business under a trade name. K.S.A. 58-3079 requires that the name be:

• a.Filed with the register of deeds in each county the firm serves
• b.Different from the name used at the firm's own branch offices
• c.Built around the surname of at least one licensed associate broker
• d.Registered with and approved by the Kansas Real Estate Commission✓

K.S.A. 58-3079(a) requires each supervising broker who wants to do business under a trade or business name other than the broker's own name to register with and obtain approval from the Commission, and lets the Commission disapprove a name that would be misleading or confusing to the public, including where that name or a similar one is in use, or has been in use during the past two years, in the same marketing area. Subsection (b) then reverses the second option outright: a branch office shall use the same trade or business name as the primary office. The register of deeds records instruments affecting land and has no role in approving a brokerage's name. No surname requirement appears anywhere in the section. Two related provisions are worth carrying into the exam: K.S.A. 58-3042(c) ties the trade-name approval to the designation of a primary office and a supervising broker, and K.S.A. 58-3050(l) lets the Commission deny continued use of a business name that includes the name of a licensee whose license has been revoked.

How long must a Kansas broker keep the records of the broker's real estate business?

• a.Three years, in the broker's paper or digital files✓
• b.Two years from the expiration of the broker's license
• c.One year from the date the transaction file is opened
• d.Seven years, in paper form kept at the primary office

K.A.R. 86-3-10 requires each broker to retain, for at least three years, in the broker's paper or digital files, a copy of all records relating to the broker's real estate business, and then lists what that includes: real estate sales contracts, option agreements and nonresidential lease agreements handled for an owner, purchaser, lessor or lessee; closing statements; each escrow agent's receipt required by K.S.A. 58-3062(d); correspondence; and the trust account records required by K.A.R. 86-3-18. Because the regulation says paper or digital, a rule confining the file to paper at one location misstates it. The period runs from the record, not from the license, so tying it to expiration is wrong, and one year is short of the regulation. Two companion rules travel with this one on the exam: K.A.R. 86-3-22 requires a unique transaction number on each contract, option agreement and nonresidential lease and on every record kept under K.A.R. 86-3-10 and 86-3-18, and K.S.A. 58-3061(e) requires the broker to make all records relating to the real estate business available for inspection by the Commission at such time as the Commission directs.

A Kansas salesperson is arrested and charged with a misdemeanor. Commission rules require the licensee to notify KREC:

• a.In writing within 10 days of the date of occurrence✓
• b.At the next renewal of the salesperson's own license
• c.Only after a court enters a conviction on the charge
• d.Within 30 days, and then only if the charge is a felony

K.A.R. 86-3-15(a) requires each licensee to report to the Commission, in writing and within 10 days of the date of occurrence, any charge of, arrest or indictment for, plea of guilty or nolo contendere to, or conviction of any misdemeanor or any felony. The trigger is therefore the charge, not the outcome, and the duty is not confined to felonies, which disposes of the third and fourth options. The same 10-day duty covers a settlement of litigation against the licensee or a company the licensee owns in whole or part, any final judgment or dispositive order, a change of name, residence address or e-mail address on file, and any denial, suspension, revocation or other discipline of a real estate or other professional license by another jurisdiction. Waiting for renewal misses the point of a reporting rule, which is that the Commission learns of the event while it can still act. Note the separate and shorter deadline that applies to office administration: K.S.A. 58-3060(c) and (d) give a supervising broker five days to report a change of name, business or trade name, office location, or designated broker, and five days to report the closure of a primary or branch office.

Under Kansas advertising rules, a salesperson's advertisement of a listed property must:

• a.Prominently display the supervising broker's trade or business name✓
• b.Show the salesperson's own name in the largest type used on the page
• c.Be approved in writing by the Commission before it is published
• d.Carry the license number of every licensee mentioned in the ad

K.S.A. 58-3086(b) requires all advertising conducted by a licensee to be under the direct supervision of the supervising or branch broker and to include the supervising broker's trade name or business name, prominently and conspicuously displayed or announced in a readable and identifiable manner. K.A.R. 86-3-7 then goes further in the salesperson's direction and shows why the second option inverts the rule: a salesperson's or associate broker's name or team name may not use 'realty', 'brokerage', 'company' or any term suggesting a separate firm, may not be more than two times larger in font size than the supervising broker's trade or business name, and must sit adjacent to that name in any internet, website, social media or social networking advertisement. Kansas requires no pre-publication approval by the Commission and no license numbers in advertisements. Two narrow exceptions repay reading: under K.S.A. 58-3086(c) the broker's name may be omitted where unlisted property is personally owned by a licensee or the licensee has an interest in it, but subsection (e) then requires that same advertising to inform the public that a licensee owns or has an interest in the property.

K.S.A. 58-3076 lets a Kansas licensee solicit a referral fee only where:

• a.The licensee has advertised referral services in the same market
• b.An introduction of business or a contractual relationship exists✓
• c.The client has signed a written waiver of the referral disclosure
• d.The receiving broker is licensed in Kansas rather than elsewhere

K.S.A. 58-3076(a) says a licensee shall not solicit a referral fee without reasonable cause, and then defines reasonable cause exhaustively: it does not exist unless an actual introduction of business has been made, a contractual referral fee relationship exists, or a contractual cooperative brokerage relationship exists. Advertising a referral service creates none of those three, and no waiver signed by a client is contemplated anywhere in the section. Where the receiving broker is licensed is not the test either. K.S.A. 58-3038(c) preserves the right of a person properly licensed as a broker or salesperson in another jurisdiction to collect a referral fee, while K.S.A. 58-3062(a)(4) forbids paying a referral fee to any licensee, Kansas or out-of-state, if the licensee knows the payment will result in a rebate. The rest of K.S.A. 58-3076 is aimed at relocation practice: subsection (b) forbids threatening to reduce or withhold employee relocation benefits or otherwise acting adversely to another licensee's client, and forbids counseling that client on how to terminate or amend an existing agency agreement or sales contract.

Every Kansas contract for the sale of residential real estate must contain language telling the buyer:

• a.That the seller has never occupied the property as a residence
• b.Where to find information about Kansas offender registration✓
• c.The name of the title company that will close the transaction
• d.That the buyer waives any claim against the listing brokerage

K.S.A. 58-3078(a) prescribes the exact paragraph, and it has been mandatory on and after July 1, 2008: each contract for the sale of residential real estate shall contain language stating that Kansas law requires persons convicted of certain crimes, including certain sexually violent crimes, to register with the sheriff of the county in which they reside, and that a buyer who wants information about those registrants may find it on the Kansas Bureau of Investigation homepage or by contacting the local sheriff's office. Because the statute supplies the words, the requirement is a drafting item rather than a judgment call, and subsection (b) makes the section part of and supplemental to the license act, so omitting it is a license-law failure. Nothing in the act requires a statement about the seller's own occupancy or the identity of the closing agent. A waiver of claims against the brokerage would run the other way entirely: K.S.A. 58-30,106(d)(1) requires a seller's agent to disclose adverse material facts actually known even to a customer, and K.S.A. 58-3062(a)(13) makes fraud or substantial misrepresentation a prohibited act.

A Kansas supervising broker learns that a salesperson placed a misleading advertisement omitting the brokerage's name. The broker should:

• a.Have the salesperson keep running it until it is replaced
• b.Treat the advertisement as the salesperson's own business
• c.See the ad corrected and address the licensee's conduct✓
• d.Wait for the Commission to send a complaint before acting

K.A.R. 86-3-31(a) spells out what failure to properly supervise means, and two of its paragraphs land directly on these facts: (a)(6) failing to take timely action to correct or mitigate a violation of the license act, BRRETA or the Commission's regulations by an associated or employed licensee where the broker has actual knowledge of it, and (a)(8) failing to ensure that all advertising by associated or employed licensees complies with the applicable statutes, regulations and office policies. K.S.A. 58-3062(c)(3) makes failure to properly supervise a prohibited act in its own right, so the broker can be disciplined for the supervision failure separately from whatever the salesperson did. Treating the advertisement as the licensee's private affair misreads the duty, which exists precisely because the firm's name and the public are exposed. Instructing the licensee to keep running it converts an oversight failure into the deliberate direction that (a)(4) forbids. And waiting for the Commission inverts the order of things; K.A.R. 86-3-31(b) treats written policies and prompt corrective action as mitigating factors, which presupposes that the broker acts first.