Maryland Real Estate Broker Exam — All Questions

Every brokerage agreement between a Maryland broker and a seller must contain:

• a.A definite termination date, effective without notice✓
• b.A guarantee of the seller's minimum net sale proceeds
• c.An automatic renewal clause running for six months
• d.A waiver of the seller's right to cancel the listing

Section 17-534(b)(1) requires the seller's brokerage agreement to 'have a definite termination date that is effective automatically without notice from the client,' and § 17-322(b)(10) makes accepting a listing without one a ground for discipline. Automatic termination is the point: the seller should not have to send anything to get free of the agreement. That is also why an automatic renewal clause runs against the statute rather than satisfying it, and why a waiver of the client's right to cancel is void — subsection (b)(5) affirmatively requires a cancellation provision. A guaranteed net return is separately prohibited: § 17-322(b)(11) and COMAR 09.11.01.01B both forbid the net listing, which would leave the licensee free to keep anything above the seller's number. The agreement must also state the compensation and explain what entitles the broker to it.

Under COMAR 09.11.01.10, a signed copy of a residential listing contract must reach the seller:

• a.Within five business days after the property is listed
• b.Only if the seller asks the listing broker for a copy
• c.At settlement, together with the closing disclosure
• d.Before the licensee advertises, shows, or offers it✓

COMAR 09.11.01.10 requires that all residential listing contracts — exclusive or open, for sale, rental, lease, or exchange — 'be in writing and signed, and a copy of the contract shall be given to the seller or owner before the licensee advertises, shows, or offers the property.' The trigger is the first act of marketing, not a fixed number of days, because the seller is entitled to hold the terms in hand before the licensee starts acting on them. A copy delivered five days later, or at settlement, arrives after the marketing it was meant to authorize. And the duty is unconditional — the Code of Ethics at COMAR 09.11.02.01H makes the same point generally, requiring copies of executed agreements to reach all parties within a reasonable time, whether or not anyone asks. Section 17-322(b)(14) and (15) separately require the licensee to furnish and keep copies of the listing, the contract of sale, and any lease.

In a residential transaction, the written agency disclosure required by § 17-530 must be made:

• a.Not later than ratification of the contract of sale
• b.Only after a consumer asks whom the licensee represents
• c.Within 72 hours of the first telephone call to a consumer
• d.Not later than the first scheduled face-to-face contact✓

Section 17-530(b)(1) fixes the moment: the disclosure 'shall occur not later than the first scheduled face-to-face contact with the seller or lessor or the buyer or lessee.' It has to come before the consumer starts talking, because the whole purpose is to tell people who is on their side before they say something a licensee owes to the other party. Waiting for ratification defeats that entirely, and so does waiting to be asked. Section 17-530(a)(3) covers the case where first contact is not face to face: the licensee must then disclose through whatever medium the contact occurs in, immediately rather than on a 72-hour clock. Section 17-530(b)(2) gives a single alternative — at an open house, a conspicuously displayed notice provided by the Commission satisfies the requirement. Section 17-530(a)(2) exempts a consumer who has already signed a brokerage agreement with the firm.

Having obtained written informed consent from all parties to act as a dual agent, a Maryland broker must then:

• a.Refer one of the two clients to a competing brokerage
• b.Assign a separate intra-company agent to each side✓
• c.Withdraw from the listing side of the transaction
• d.Report the dual agency to the Commission in writing

Section 17-530.1(a) begins by prohibiting dual agency outright; (b)(1)(i) then permits it where the broker obtains the written informed consent of all parties. Consent alone is not enough. Subsection (b)(1)(ii) requires the dual agent to 'assign a licensed associate real estate broker or licensed real estate salesperson affiliated with the real estate broker to act as the intra-company agent on behalf of the seller or lessor and another' to act for the buyer or lessee — two people, one for each side. Under (b)(1)(v) each intra-company agent must give their client the same service they would in an ordinary transaction, including advice on price and negotiating strategy, while (b)(1)(iii) blocks confidential information from crossing between them or being disclosed by the dual agent. Nobody is referred out and the broker does not step off the listing; § 17-530.1(e) lets the broker withdraw only from a client who refuses to consent. The consent is documented on the Commission's standard form under § 17-530.2, not filed with the Commission.

A Maryland salesperson makes an offer to buy a listed house for herself. The Code of Ethics requires her to disclose her licensing status in writing:

• a.Only if the seller asks whether she holds a license
• b.No later than the time that the offer is submitted✓
• c.Within ten days after the contract is ratified
• d.At settlement, on the closing disclosure form

COMAR 09.11.02.02D(1) requires a licensee seeking to acquire an interest in real property to disclose the licensee's licensing status in writing to the seller or lessor 'no later than the time that an offer is submitted.' The disclosure has to travel with the offer because that is when the seller decides, and a seller is entitled to know that the person on the other side reads the market for a living. Subsection D(2) extends the same duty when the licensee acts for an immediate family member, an entity the licensee has an interest in, or an employee of the brokerage or team; D(6) defines that family circle out to grandparents and grandchildren. The mirror-image rule in D(3) covers the licensee selling property they own — disclosure in writing at the time the property is offered — and D(5) allows the MLS to carry it. Section 17-322(b)(4) backs all of this with discipline for failing to disclose a material fact.

A Maryland seller elects the disclaimer, or 'as is', option on the statutory form. Under Real Property § 10-702 the seller must still disclose:

• a.The price the seller originally paid for the property
• b.The seller's reason for putting the house on the market
• c.Latent defects of which the seller has actual knowledge✓
• d.Every repair the seller made in the last three years

Real Property § 10-702(d)(1) requires the disclaimer statement itself to 'disclose any latent defects of which the vendor has actual knowledge,' and only then may the seller state that the property is otherwise sold as is, with no representation about its condition. Section 10-702(a) defines latent defects narrowly: material defects a purchaser could not reasonably be expected to find by careful visual inspection, that would pose a direct threat to the health or safety of the purchaser or an occupant. That definition is what excludes the other choices — they are not concealed physical dangers. What the seller paid is price history; why the seller is moving is personal circumstance; a list of past repairs describes work done rather than a hidden hazard, and the disclaimer route exists precisely so a seller need not catalogue condition. Under § 10-702(b) the section covers residential property of four or fewer single-family units, with exemptions including new construction, foreclosure and fiduciary sales, and unimproved land.

A Maryland buyer signs a contract of sale without ever receiving the disclosure or disclaimer statement. Real Property § 10-702 gives that buyer:

• a.A claim against the listing broker for the deposit paid
• b.A statutory reduction of the price at the settlement table
• c.An unconditional right to rescind and recover the deposit✓
• d.A one-year home warranty paid for by the seller's broker

Real Property § 10-702(f)(1) requires the vendor to deliver the completed statement to the purchaser on or before entering into the contract of sale. Subsection (h)(1) supplies the remedy when that does not happen: on written notice the purchaser has 'the unconditional right' to rescind at any time before receiving the statement or within 5 days after receiving it, and to the immediate return of any deposits. The right is not open-ended — (h)(2) terminates it once the buyer applies for a mortgage where the lender has disclosed that consequence in writing, or 5 days after such a lender disclosure. Subsection (k)(1) makes any attempted waiver in the contract void. Note the flip side in (g): a buyer who did receive the statement on time has no right to rescind based on what it says. Deposits held in a broker's trust account come back through the § 17-505 procedure, so the remedy runs against the transaction rather than as a damages claim against the listing broker.