Pennsylvania Real Estate Broker Exam — All Questions

A Pennsylvania broker runs the brokerage from a room inside her private residence. Chapter 35 requires that the office:

• a.Have an entrance separate from the entrance to the residence✓
• b.Sit in a district that local zoning reserves for commercial use
• c.Stay open to the public throughout posted regular business hours
• d.Occupy a detached structure standing on the same parcel of land

Section 35.242(b) provides that if the office of a broker or cemetery broker in this Commonwealth "is located in a private residence, the entrance to the office shall be separate from the entrance to the residence." It sits alongside two other requirements in the same section: the office must be devoted to the transaction of real estate business and arranged to permit business to be conducted in privacy under subsection (a), and the business name as designated on the license must be displayed prominently and permanently outside the office under subsection (c), which section 601(a) reinforces by requiring a sign showing the proper licensed brokerage name. Nothing requires a detached building. Local zoning is a municipal question that the Commission's rule does not address, and section 35.246 assumes only that inspections happen during regular business hours rather than imposing public opening hours.

A Pennsylvania broker who holds a standard license is opening a second office in the Commonwealth. The broker must:

• a.Obtain a branch office license for the location before it opens✓
• b.Notify the Commission in writing within ten days of the opening
• c.Engage a separate broker of record to be responsible for it
• d.Record the additional location with the county recorder of deeds

Section 601(b) requires a broker intending to maintain more than one place of business to apply for and obtain an additional license in his name at each office, and section 35.243(a) states the timing: a broker "may not open a branch office in this Commonwealth without first obtaining a branch office license for that location from the Commission." The license is issued in the name under which the broker is licensed at the main office and terminates automatically if the broker's own license is suspended, revoked or discontinued, under sections 35.243(b) and (c). No separate broker of record is needed, because section 601(b) and section 35.244(a) require only that each office be under the direction and supervision of a broker or associate broker and expressly allow one such person to supervise more than one office. A ten-day notice is the rule for a change of an existing office's location under section 601(a), not for opening a new one, and the recorder of deeds has no role.

How often may the Commission or its authorized representatives conduct a routine inspection of a Pennsylvania broker's office?

• a.No more than twice a year, during regular business hours
• b.Once in each two-year license period, by prior appointment
• c.Only where a complaint alleges a violation of the act or rules
• d.No more than four times a year, during regular business hours✓

Section 35.246(a) authorizes a routine inspection "no more than four times a year during regular business hours" to determine whether the office is being operated in compliance with the act and the chapter. Inspections tied to a complaint are the separate category in section 35.246(b), which permits a special inspection on a complaint or reasonable belief of a violation, or as a follow-up to an inspection that revealed non-compliance, and those are in addition to the four routine visits rather than a substitute for them. Section 35.246(c) requires the inspectors to identify the inspection and its limited scope before starting, and section 35.246(d) sets out what they may then do: examine transaction and entity records, inspect all areas of the office, interview licensed and unlicensed employees, and obtain the broker's written authorization for the bank to release escrow account records. Section 608.5(g) and section 35.325(d) supply the parallel duty for escrow records.

A Pennsylvania broker accepts an earnest money deposit belonging to the parties. RELRA requires the broker to place it in a separate escrow or trust account by:

• a.The end of the third business day following the broker's receipt
• b.The end of the calendar week in which the broker received it
• c.The day on which the seller accepts the buyer's written offer
• d.The end of the business day following the broker's receipt of it✓

Section 608.5(e) requires a broker to deposit money and property belonging to others in a separate custodial or trust fund account with a bank or recognized depository "by the end of the business day following their receipt by the broker," and section 35.324(a) states the same deadline by reference to the office where the escrow records are kept. The account must designate the broker as trustee, allow withdrawal without previous notice and be used exclusively for escrow, under section 608.5(g) and section 35.325(a). A third business day and a weekly cutoff appear nowhere in either the act or the chapter. Acceptance of the offer matters only in the narrow exception in section 608.5(f) and section 35.324(b), where the deposit is a check and both sides consent in writing or electronically to the broker holding it uncashed pending acceptance; the check must then be deposited by the close of business on the business day following acceptance, and returned uncashed if the offer is refused.

A buyer and a seller each claim the deposit a Pennsylvania broker is holding in escrow, and settlement of the dispute looks remote. Chapter 35 permits the broker to:

• a.Petition the county court to interplead the claimants after 30 days' notice✓
• b.Retain the deposit in payment of the commission the broker has lost
• c.Release the deposit to whichever party the listing agreement favors
• d.Divide the deposit between the two parties and close the transaction file

Section 35.327 requires the broker to retain disputed money in escrow until the dispute is resolved and then supplies the exit: "if resolution of the dispute appears remote without legal action, the broker may, following 30 days' notice to the parties, petition the county court having jurisdiction in the matter to interplead the rival claimants." Section 608.5(a) frames the same point from the statute, permitting release only on consummation, on a termination where entitlement is undisputed or governed by a prior written agreement, on written instructions signed by all parties, or on a final court order. Section 35.322 makes the escrow duty non-waivable by any agreement among the parties or the brokers, so a listing agreement cannot decide the question. Taking the money for the commission would be misappropriation under section 608.5(d) and section 35.326(c), and splitting the deposit without authority releases funds the broker has no instruction to release, contrary to section 608.5(b), which requires notice in writing of any partial release.