Maryland Real Estate Broker Exam — All Questions

Section 17-502 requires a Maryland broker to deposit trust money promptly, and in no event later than:

• a.7 business days after both parties accept the contract✓
• b.5 business days after both parties accept the contract
• c.3 business days after both parties accept the contract
• d.10 business days after both parties accept the contract

Section 17-502(b)(1) requires the broker to deposit trust money 'promptly, but not more than 7 business days after the acceptance of a contract of sale by both parties' into an account held separately from the broker's own accounts and used solely for trust money. Two details decide the timing: the clock starts on acceptance by both parties, not on receipt of the check, and the days are business days. Before that, § 17-502(a) requires an associate broker or salesperson who takes in trust money to hand it to the broker promptly — the licensee never holds it. Subsection (b)(2) forbids using trust money for any other purpose, and § 17-503 requires the account to be at a State-located, federally or State-insured institution. The only exception to the deposit rule is written direction to the contrary as authorized by § 17-505(d).

COMAR 09.11.01.17 permits an unlicensed office employee to sign escrow account checks only when:

• a.A designated licensee also cosigns each check✓
• b.The amount of the check is under one thousand dollars
• c.The broker is out of the State on the day of signing
• d.The Commission has approved that employee in writing

COMAR 09.11.01.17 requires the real estate broker to be a signator, or at least one of the signators, on checks drawn on the escrow accounts the broker must maintain. The broker may name an alternate signator, but 'this designated alternate signator shall be a licensee.' The regulation then allows a nonlicensed person to be a cosignator only 'provided all checks are also cosigned by a designated licensee.' So an unlicensed bookkeeper is never a sole signature on client money — a licensee, answerable to the Commission, always signs too. The rule turns on who is accountable, not on the size of the check or on the broker's travel schedule, and there is no per-employee approval process at the Commission. COMAR 09.11.01.07A separately requires the broker to report the bank name and account number to the Commission as soon as trust monies are received, and to give written notice within 10 days of changing the account or the bank.

A Maryland listing expires without a sale. Section 17-507 requires the licensee to keep the transaction file for:

• a.3 years after the date of the listing
• b.7 years after the date of the listing
• c.5 years after the date of the listing✓
• d.10 years after the date of the listing

Section 17-507(b)(2)(i) sets a single retention period measured from one of two points: records must be kept 'for 5 years, starting on the date of the closing of a real estate transaction, or, if the transaction is not closed, 5 years after the date of the listing.' A listing that never produced a sale therefore runs from the listing date. Property management records run 5 years from termination of the management agreement. What must be kept is broad — listings and any other document executed or obtained in connection with providing brokerage services, including any electronic signature on a document. Subsection (c) permits electronic storage, but only if the stored record cannot be erased or edited, was made in the regular course of business, has an identifiable custodian, and sits in a reliable indexing system giving convenient access and chronological arrangement. Trust money records get their own rule in (a): they stay in a secured area within the broker's office.

A team leader and a branch office manager both supervise the same salesperson. Under §§ 17-320 and 17-545, the broker's own duty to supervise that salesperson is:

• a.Discharged, since the manager is closer to the salesperson
• b.Divided equally between the manager and the team leader
• c.Suspended, since a team leader must be an associate broker
• d.Unchanged, since their duties are added to the broker's own✓

Maryland stacks supervision rather than delegating it away. Section 17-320(c)(1) requires the broker to exercise reasonable and adequate supervision over anyone providing brokerage services on the broker's behalf, including independent contractors, and (c)(2) says that holds regardless of how the individual is affiliated. Section 17-320(d)(2) then states that the branch office manager's responsibility 'is in addition to, and not in lieu of, the responsibility of the broker,' and § 17-545(b) says the same of the team leader. Each layer adds a person who can be disciplined — §§ 17-322(b)(27) and (34) reach the broker and the branch manager separately — and none of it subtracts from the broker. COMAR 09.11.05.03C completes the picture: once a failure of supervision is shown, the burden is on the broker to prove the supervision provided was reasonable and adequate. A team leader may in fact be a salesperson with at least 3 years of experience under § 17-544(a).

A Maryland licensee lists a home whose mortgage is 90 days in default. Real Property § 7-302 keeps the licensee outside the Protection of Homeowners in Foreclosure Act only if the property is:

• a.Appraised by a Maryland-licensed appraiser before it is put on market
• b.Sold to a cash buyer who has had no prior dealings with the licensee
• c.Conveyed by quitclaim deed at least twenty days before the sale date
• d.Listed in the local multiple listing service and sold at a settlement✓

Real Property § 7-302(a)(6) exempts a Title 17 licensee from the Protection of Homeowners in Foreclosure Act only while the person is engaged in licensed activity and is not violating § 7-307 or Title 17, and only if the residence in default 'is listed in the local multiple listing service' and 'is sold or transferred through a settlement.' Those two conditions keep the transaction in the open market with a settlement record, which is exactly what the foreclosure-rescue schemes the Act targets avoid. A residence in default is defined in § 7-301(j) as owner-occupied residential property of not more than four units on which the mortgage is at least 60 days in default, so a 90-day default is squarely inside. The exemption does not turn on how the buyer pays or on getting an appraisal, and § 7-310(c) actually forbids using a quitclaim deed for such a sale except where a primary mortgage lender takes a deed in lieu of foreclosure. Section 7-302(b) removes the exemption entirely if the licensee is working to get title into their own hands or a relative's.

A Maryland broker plans to negotiate home improvement contracts with her sellers before listing their houses. Business Regulation §§ 8-101 and 8-601 let her do that only if she holds:

• a.An additional MREC branch office certificate
• b.A Maryland general contractor's surety bond
• c.A Commissioner of Financial Regulation permit
• d.A Home Improvement Commission license✓

Business Regulation § 8-101(n) defines 'sell a home improvement' as negotiating, or offering to negotiate, a home improvement contract with an owner, or seeking to get one. Section 8-601(b) then says a person 'may not sell or offer to sell a home improvement in the State unless the person has a contractor license or salesperson license' from the Maryland Home Improvement Commission, and § 8-601(c) makes a violation a misdemeanor carrying up to a $1,000 fine or 6 months on a first conviction. A real estate license authorizes brokerage services under Title 17 and nothing more, so an MREC branch office certificate does not reach this activity. The Commissioner of Financial Regulation licenses mortgage lenders and related credit businesses, not home improvement work. And a surety bond is a financial assurance a licensing scheme may require, not a substitute for the license itself. Section 8-101(g) excludes new home construction and work on apartment buildings of four or more units from 'home improvement'.