New Hampshire Real Estate Broker Exam — All Questions

A New Hampshire salesperson believes a commission was underpaid and wants to sue. Under RSA 331-A:32, II, the salesperson may bring that action in their own capacity only:

• a.Against the broker with whom the salesperson is or was licensed✓
• b.Against the seller who signed the listing agreement for the property
• c.Against the cooperating firm whose buyer client bought the property
• d.Against the closing agent who disbursed the proceeds of the sale

RSA 331-A:32, II provides that "no salesperson may sue in such person's own capacity for the recovery of a fee, commission or compensation for services as a salesperson unless the action is against the broker with whom the person is licensed or was licensed with at the time the act or service was performed." The rule follows the structure of the license itself. RSA 331-A:26, XX makes it prohibited conduct for a salesperson or broker to accept a commission from anyone "except the licensed real estate principal broker with whom the salesperson or broker is licensed," so the only party who ever owes the salesperson money is that principal broker. The seller and the cooperating firm pay the principal broker, not the individual licensee, and the closing agent merely disburses on instruction. RSA 331-A:32, I adds the wider bar: nobody may sue for compensation for brokerage services at all unless they were duly licensed at the time.

Rea 404.04(f) defines a listing on which the commission is the difference between the selling price and a minimum price acceptable to the seller. In New Hampshire that arrangement is:

• a.Permitted where the seller consents to it in a signed writing
• b.Prohibited outright by the commission's brokerage contract rules✓
• c.Permitted only on commercial real estate, not on dwellings
• d.Permitted only where the licensee is acting as a facilitator

Rea 404.04(f) states it in two sentences: "Net listings shall be prohibited. 'Net listing' means a listing wherein the commission to be received is the difference between the selling price and a minimum selling price acceptable to the seller." The prohibition is flat, so consent, the commercial character of the property and the licensee's capacity make no difference. The reason is the conflict the structure creates: on a net listing the licensee's pay rises with every dollar the seller gives up, which sits directly against the RSA 331-A:25-b, I(b)(1) duty to seek a sale at the price and terms stated in the brokerage agreement or otherwise acceptable to the seller. What Rea 404.04(b)(4) requires instead is a professional fee "stated as a dollar amount, percentage or other specific consideration" written into the contract, alongside the execution date, the property and asking price, the names and addresses of the parties, and the expiry date.

Rea 404.04(g) governs a New Hampshire licensee acting for a buyer or lessee on a purchase, exchange or lease. The licensee may act on the buyer's behalf only:

• a.After the buyer has been prequalified by a lender
• b.Once the buyer has made a written offer on a home
• c.Under a written contract signed by all the parties✓
• d.When the listing broker agrees to share a commission

Rea 404.04(g) provides that "no broker or salesperson shall act on behalf of a buyer or lessee with regard to the purchase, exchange or lease of any real estate or of the improvements thereon without a written contract signed by all parties," mirroring the seller-side requirement in Rea 404.04(a). Rea 404.04(h) then lists what that buyer agency or tenant representation contract must contain: the date of execution, a general description, location and price range of the real estate sought, the names and addresses of all parties, the professional fee stated as a dollar amount, percentage or other specific consideration, and the date the contract expires. Prequalification, a written offer and a cooperating commission are all features of transactions, not preconditions to representation. Rea 404.04(i) adds one thing to look for inside the same document: consent to designated agency must be obtained within the buyer agency contract itself, under RSA 331-A:25-e, II.

RSA 331-A:25-a, II names the relationships a New Hampshire licensee may hold: seller agent, buyer agent, disclosed dual agent or subagent. If some other relationship is intended, the statute requires that it be:

• a.Approved in advance by the New Hampshire Real Estate Commission
• b.Described in writing and signed by all parties before services begin✓
• c.Disclosed orally at the first showing and noted in the transaction file
• d.Recorded at the registry of deeds for the county where the land lies

RSA 331-A:25-a, II reads: "A licensee may be a seller agent, a buyer agent, a disclosed dual agent, or a subagent. If another relationship between the licensee who performs the services and the seller, landlord, buyer, or tenant is intended, it must be described in writing and signed by all parties to the relationship prior to services being rendered." Three elements travel together - in writing, signed by everyone, and before the work starts - and an oral disclosure noted in the file satisfies none of them. The commission does not pre-approve individual brokerage relationships; it licenses and disciplines. Recording is for instruments affecting title under RSA 477:3-a, not for agency arrangements. RSA 331-A:25-a, I supplies the backdrop: a licensee serving a client through a brokerage agreement is bound by loyalty, obedience, disclosure, confidentiality, reasonable care, diligence and accounting.

Rea 701.01 requires a New Hampshire licensee to give a consumer a written brokerage relationship disclosure. When must it be given, and on what document?

• a.At the first showing of a property, on a brokerage relationship form of the firm's own design
• b.Before any written offer is prepared, on the purchase and sale agreement itself
• c.Within three days of a signed listing, on the commission's dual agency consent form
• d.At the time of the first business meeting, on the commission's Brokerage Relationship Disclosure Form✓

Rea 701.01(a) requires the licensee to "provide a written brokerage relationship disclosure to the consumer at the time of first business meeting," and Rea 701.01(c) requires the specific document: "Licensees shall use the 'Brokerage Relationship Disclosure Form', effective June 2017, adopted by the commission." A firm's own form is not a substitute, and the purchase and sale agreement comes far too late, since the whole purpose is to tell the consumer whom the licensee may represent before the consumer confides anything. There is one carve-out and one fallback. Rea 701.01(d) excuses the form at an open house if the licensee discloses the brokerage relationship with the seller by sign, poster, pamphlet or other conspicuous means. Rea 701.01(f) covers refusal: if the consumer will not sign, the licensee notes that fact on a copy of the form and retains it for three years.

RSA 331-A:25-b, II requires a New Hampshire seller's agent to disclose to a prospective buyer any material physical, regulatory, mechanical or on-site environmental condition of which the licensee has actual knowledge. The same subparagraph adds that this duty:

• a.Requires a professional home inspection before any offer may be written
• b.Creates no affirmative obligation to investigate any material defects✓
• c.Requires the licensee to obtain a signed waiver of defects from the buyer
• d.Applies only once the buyer has signed a purchase and sale agreement

RSA 331-A:25-b, II(c) requires the disclosure "at any time prior to the time the buyer or tenant makes a written offer to purchase or lease the subject property" and then closes with: "This subparagraph shall not create an affirmative obligation on the part of the licensee to investigate material defects." The duty is triggered by actual knowledge and discharged by telling the buyer before the offer; it is not a duty to inspect, so nothing in it forces a professional inspection or a signed waiver. Nor does it wait for a signed agreement - by then the buyer has committed, which is exactly what the timing rule prevents. New Hampshire repeats the identical sentence three times for the three capacities a licensee may hold: RSA 331-A:25-b, II(c) for the seller agent, RSA 331-A:25-c, I(e) for the buyer agent, and RSA 331-A:25-f, II for the facilitator, with Rea 701.02 restating it in rule form.

Under RSA 331-A:25-e, V, when a designated agent is appointed in a New Hampshire firm, information known or acquired by that designated agent:

• a.Is imputed to every licensee affiliated with the same brokerage firm
• b.Must be reported in writing to the principal broker within 24 hours
• c.Becomes the property of the firm once the transaction has closed
• d.Is not imputed to the appointing agent or to other firm licensees✓

RSA 331-A:25-e, V provides that "when a designated agent is appointed, information known or acquired by the designated agent shall not be imputed to the appointing agent or to other licensees within the same firm." That non-imputation is the mechanism that lets one firm represent both sides through separate designated agents without either client's confidences leaking. RSA 331-A:25-e, X carries the same logic up a level, so dual agency does not occur between appointing agents who have separately appointed the designated seller agent and the designated buyer agent within one firm. Two limits are worth remembering. Under RSA 331-A:25-e, II the appointment needs the party's written consent at the commencement of the relationship, obtained inside the listing or buyer agency contract under Rea 404.04(c) and (i). And under RSA 331-A:25-e, VIII the appointment does not limit the liability of the appointing agent or the principal broker for a designated agent's breach.

A New Hampshire licensee assists both parties without representing either. Unless the parties agree otherwise, RSA 331-A:25-f, III provides that this facilitator:

• a.Owes both parties the confidentiality that a disclosed dual agent owes
• b.Has no duty to keep information received from either party confidential✓
• c.May not present an offer without the written consent of both parties
• d.Must become a disclosed dual agent before any written offer is made

RSA 331-A:25-f, III states that "unless otherwise agreed, the licensee acting as a facilitator shall have no duty to keep information received from the seller or landlord or the buyer or tenant confidential." That is the central difference between a facilitator and an agent, and it is why the brokerage relationship disclosure matters so much here: Rea 701.01(e) requires the commission's form to tell the consumer that a facilitator may only perform ministerial acts as defined in RSA 331-A:2, VI-a, is not obligated as an agent to either side, and could later change into an agency relationship before an offer is prepared. A dual agent under RSA 331-A:25-d, II(e) is bound to preserve confidences, which is the opposite position. The facilitator still owes real duties: honest treatment of both sides under RSA 331-A:25-f, VI, timely presentation of all offers and agreements under VIII, and disclosure of known material conditions under II.

Rea 703.01(d)(13) addresses earnest money under a New Hampshire cooperative brokerage agreement with an out-of-state broker on a commercial transaction. Deposits received must be placed in:

• a.The escrow account of the out-of-state broker
• b.A joint account needing both brokers' signatures
• c.The escrow account of the New Hampshire broker✓
• d.The client trust account of the closing attorney

Rea 703.01(d)(13) requires the cooperative brokerage agreement to contain "a statement that if any earnest monies or deposits are received, accepted, or held in accordance with RSA 331-A:13 and Rea 702.01, the same shall be placed in the escrow account of the New Hampshire broker." RSA 331-A:22-a, I(d) says the same thing from the statute side. The design runs through the whole cooperation scheme: the New Hampshire broker remains answerable, so the money must sit where the commission can audit it under RSA 331-A:13, V, in an insured financial institution within this state. Rea 703.01(d)(7) puts negotiations, showing, advertising and listing under the direct supervision of the New Hampshire broker; Rea 703.01(d)(2) caps the agreement's term at one year; and RSA 331-A:22-a, I limits the whole arrangement to commercial real estate, which RSA 331-A:2, IV-a defines as any real estate other than property containing one to four family dwelling units.

Under RSA 331-A:25-d, I, a New Hampshire licensee may act as a disclosed dual agent only where:

• a.The broker judges the arrangement to be in the firm's best interest
• b.The seller alone has agreed to the arrangement in writing
• c.All parties have given written consent no later than the written offer✓
• d.The transaction price exceeds a threshold set by the Commission

RSA 331-A:25-d, I provides that "a licensee may act as a disclosed dual agent only with the written consent of all parties to the anticipated transaction at the time in which a dual agency relationship occurs, but no later than the preparation of a written offer for sale or lease." Consent must come from everyone, it must be written, and it must arrive before the offer is drafted. RSA 331-A:26, XII makes acting for more than one party without that full disclosure and written consent prohibited conduct in its own right. The seller's consent alone is exactly half of what the section requires. The broker's own view of the firm's interest is the opposite of the test, since the firm's interest is what the consent exists to guard against. And no dollar threshold appears anywhere in the section. Rea 404.04(m) sets out what the informed consent agreement must contain, including a clear statement of the dual agent's duties under RSA 331-A:25-d and the date the consent expires.

A New Hampshire disclosed dual agent learns the maximum price the buyer is willing to pay. Under RSA 331-A:25-d, II(e), the agent may:

• a.Share it with the seller to help the transaction close faster
• b.Withhold it from the seller as confidential negotiating data✓
• c.Disclose it to the seller only if the seller asks directly
• d.Disclose it to the seller once an offer has been accepted

RSA 331-A:25-d, II(e) requires a disclosed dual agent to preserve "confidential information received from the parties that is acquired during the written disclosed dual agency relationship, or from any prior brokerage agreement," and says the obligation continues beyond termination, expiration, completion or performance of the fiduciary relationship. The most a buyer will pay is the clearest example of such information, and protecting it is the condition on which both parties agreed to be served by one firm. Passing it to the seller to move the deal along advances the transaction at the buyer's direct expense, which is the harm the paragraph exists to prevent, and a direct question from the seller does not create an exception. Nor does acceptance of an offer release it, since the duty outlives the relationship. The statute lists the only four escapes: written consent of the party to whom the information pertains, information made public from another source, disclosure needed to defend the licensee against an accusation of wrongful conduct, and disclosure otherwise required by law.