Pennsylvania Real Estate Broker Exam — All Questions

An advertisement placed by a Pennsylvania salesperson for a listed property must contain:

• a.The salesperson's license number and the Commission's telephone
• b.The business name and license number of the employing broker
• c.The business name and telephone number of the employing broker✓
• d.The salesperson's own telephone number and business mailing address

Section 35.305(c) requires that an advertisement by an associate broker, salesperson, cemetery associate broker or cemetery salesperson "shall contain the business name and telephone number of the employing broker," and that the names and telephone numbers be of equal size. Commonwealth Court has enforced the rule against advertisements that carried the broker's name with a number that in fact rang through to the individual licensee, in Campo v. State Real Estate Commission and D'Alonzo v. State Real Estate Commission, upholding it as a way of giving the public access to the licensee's supervisor. No license number is required in an advertisement, whether the broker's or the salesperson's, and the Commission's own telephone number belongs in written agreements and sales contracts as part of the Recovery Fund notice under sections 608.1(6) and 35.331(a)(1). Section 35.305(a) adds the underlying constraint that the firm may advertise only under the business name designated on its license.

A licensed Pennsylvania broker advertises her own home for sale by owner, without listing it. Section 35.304 requires that the advertisement:

• a.Disclose that the seller is a real estate licensee✓
• b.Appear only through a licensed real estate company
• c.Carry the Commission's prior written approval to run
• d.Disclose the name of the brokerage that employs her

Section 35.304 provides that a licensee who sells or leases his own real estate "shall disclose that he is a real estate licensee in advertisements for the property," and exempts only the case where the property is listed with a real estate company, because the firm's own advertising identification then does the work. Section 35.288(b) is the companion obligation off the page: the licensee must disclose licensed status to a prospective buyer or lessee before that person enters into an agreement of sale or lease. Naming an employing brokerage is the requirement of section 35.305(c) for advertisements of listed property, which is a different situation. Nothing in the act or Chapter 35 routes a licensee's own for-sale-by-owner advertisement through a brokerage or requires the Commission to approve advertising copy in advance.

A Pennsylvania broker advertises the brokerage's "sales volume." Under Chapter 35 that figure may include:

• a.Only the listings the brokerage took during the year advertised
• b.All listings the brokerage held at any point during that same year
• c.All properties the brokerage currently has under agreement of sale
• d.Only closed transactions, as the Commission's rule defines them✓

Section 35.307(a) provides that an advertisement about "sales volume" or "production" shall refer only to closed transactions, and defines a closed transaction as "either a listing sold or a sale made after a fully executed deed is delivered." Pending agreements have not closed on that definition, so counting them inflates the number in exactly the way the rule forbids. Listings taken and listings held are inventory rather than volume, and the rule speaks to what was sold. Two neighboring provisions do similar work: section 35.307(b) requires an advertisement about production or market position to identify the municipality that the market comprises, and section 35.307(c) limits a claim about the number of offices to those for which the Commission has issued branch office licenses.

Which of the following does RELRA make a ground for discipline that applies specifically to a broker licensee?

• a.Failing to attend the Commission's annual public meetings
• b.Failing to hold membership in a local board of Realtors
• c.Failing to exercise adequate supervision over affiliated licensees✓
• d.Failing to carry errors and omissions coverage on the firm

Section 604(a)(16) reaches, "in the case of a broker licensee, failing to exercise adequate supervision over the activities of his licensed salespersons or associate brokers within the scope of this act," and section 604(a)(27) extends the same duty to campground membership and time-share salespersons the broker supervises. Section 522(b) is where the duty starts, because the broker's sworn statement that he will actively supervise and train the applicant is part of the salesperson's application. The public meetings in section 202(e), one each year in Pittsburgh, Philadelphia and Harrisburg, exist to gather comment from the public and impose no attendance duty on licensees; it is a Commission member who forfeits a seat for missing three consecutive meetings under section 202(c). Trade association membership is voluntary, and section 604(a)(4) in fact makes it a prohibited act to claim membership in an association the licensee does not belong to. Neither RELRA nor Chapter 35 imposes an errors and omissions insurance requirement.

A Pennsylvania salesperson assists the employing broker with the firm's property management work. The salesperson may not:

• a.Collect rent from tenants and pay it over to the employing broker
• b.Show available units to prospective tenants while a unit is vacant
• c.Negotiate lease terms independently or execute a lease for the lessor✓
• d.Prepare routine correspondence and file records for the broker

Section 35.287 permits a salesperson to assist in property management where the work is supervised and controlled by the employing broker, then draws the line in one sentence: "The salesperson may not independently negotiate the terms of a lease nor execute a lease on behalf of the lessor." Showing units and preparing records fall within supervised assistance, and the section 201 definition of salesperson expressly includes leasing or renting real estate and collecting rent when done for the employing broker. Money the salesperson receives does not stop there, because section 608.5(c) requires every associate broker and salesperson to pay a deposit or other escrow over to the employing broker promptly on receipt, and section 608.5(k) forbids a salesperson to hold escrow at all. Rents are handled differently again: sections 608.5(h) and (i) and section 35.321(b) exempt rents from escrow but require the broker to keep them in a rental management account separate from the escrow and general business accounts.

A Pennsylvania exclusive listing agreement is defective under Chapter 35 if it:

• a.Runs for a stated period of one year from the date the parties sign it
• b.Contains a clause renewing the listing automatically at the end of the term✓
• c.States in bold that the broker earns a fee on a sale made by anyone
• d.States the commission or other compensation expected on the sale price

Section 35.332(c) lists what an exclusive listing agreement may not contain, and an automatic renewal clause is the second item on that list, alongside a listing period exceeding one year, a requirement of cancellation notice to end the agreement at the term's close, authority for the broker to execute an agreement of sale or lease for the owner, an option for the broker to purchase the listed property, and authority to confess judgment against the owner. Section 604(a)(10) makes the same point from the statute's side by making it a prohibited act to fail to specify a definite termination date not subject to prior notice in any listing contract. A one-year term is therefore lawful, being the maximum rather than a violation. The sale price, the commission and the duration are all required by section 35.332(b), and the bold-face statement that the broker earns a commission on a sale by whomever made, including the owner, is required by section 35.332(b)(4) for an exclusive right-to-sell.

How long must a Pennsylvania broker retain the records of a real estate transaction?

• a.Six months following consummation of the transaction
• b.Two years following consummation of the transaction
• c.Three years following consummation of the transaction✓
• d.Seven years following consummation of the transaction

Section 604(a)(6) makes it a prohibited act to fail "to preserve for three years following its consummation records relating to any real estate transaction," and section 35.286(a) restates the three-year rule for brokers and cemetery brokers. Six months is the shorter period section 35.286(a) assigns to four specific acknowledgments rather than to transaction files: the Consumer Notice acknowledgment where no transaction follows, the time-share and lease consumer notices, and the written disclosure statement that establishes a subagent or transaction licensee relationship under section 35.281(b)(3). Neither two nor seven years appears in the act or the chapter. Section 35.286(b) adds that these records, and the corporate or partnership records of an entity holding a broker's license, must be produced on written request or during an office inspection under section 35.246.

A Pennsylvania salesperson intends to buy, through a relative, a property listed with her own office. Before going forward she must:

• a.Resign from the brokerage and wait for the listing to expire
• b.Disclose her intention and true position to the owner in writing✓
• c.Obtain the Commission's written approval for the purchase
• d.Refer the listing to a cooperating broker outside the firm

Section 604(a)(13) makes it a prohibited act to fail "to disclose to an owner in writing his intention or true position if he directly or indirectly through a third party, purchased for himself or acquires or intends to acquire any interest in or any option to purchase property which has been listed with his office to sell or lease." The words "indirectly through a third party" are what capture a purchase in a relative's name. Section 35.283(a) states the same duty in the rules, barring a licensee from participating in a transaction involving property in which the licensee has an ownership interest without first disclosing that interest in writing to all parties, and section 35.283(f) imposes a continuing duty to disclose conflicts as they arise. Resigning, seeking Commission approval or handing the listing to another firm are not what the statute asks for; written disclosure to the owner is.

The Commission's rules treat a licensee's attempt to bring about "panic selling" in a neighborhood in order to profit from it as:

• a.Acceptable where the licensee's own market data support the claim
• b.A summary offense to be prosecuted by the district attorney
• c.A matter reserved to the Pennsylvania Human Relations Commission
• d.Bad faith within the meaning of RELRA's prohibited acts section✓

Section 35.303(a) says the Commission "will regard an attempt by a licensee to bring about panic selling in order to profit from it as bad faith under section 604(a)(20) of the act," and defines panic selling as frequent efforts to sell residential real estate in a neighborhood because of a fear of declining values "when the fear is not based on facts relating to the intrinsic value of the real estate itself." Section 35.303(b) adds that proof of systematic solicitation of sales listings may be sufficient, though not conclusive, evidence of the attempt. Summary and criminal penalties under section 303 attach to practicing without a license, not to this conduct. A discrimination complaint may well go to the Human Relations Commission under section 604(a)(22), but section 35.303 gives the State Real Estate Commission its own independent ground, and the definition's own words exclude any claim resting on the property's intrinsic value.

RELRA requires a Pennsylvania licensee to furnish a copy of any listing, sale or lease contract to every person who signed it:

• a.Within ten days after settlement occurs
• b.Only when a signatory asks for a copy
• c.Within thirty days of the contract date
• d.At the time the contract is executed✓

Section 604(a)(9) makes it a prohibited act to fail "to voluntarily furnish a copy of any listing, sale, lease, or other contract relevant to a real estate transaction to all signatories thereof at the time of execution." Two words carry the rule: "voluntarily," which removes any need for the consumer to ask, and "at the time of execution," which removes any grace period. Waiting for settlement or for a thirty-day window would leave signatories without the terms they had just agreed to, which is the harm the paragraph addresses. Section 609(b) reinforces the same idea in the time-share and campground context, requiring that copies of all documents placing an obligation on a purchaser be given to the purchaser upon execution.