Montana Real Estate Salesperson Exam — All Questions

Under Montana law, which relationship is a licensee presumed to have with a party unless the licensee and that party enter a written agency agreement?

• a.Statutory broker (a non-agent who assists without representing the party)✓
• b.Dual agent
• c.Seller agent
• d.Buyer agent

Montana recognizes the 'statutory broker,' a licensee who assists a party in a transaction without acting as that party's agent. Unless a written agency agreement creates a seller-agent or buyer-agent relationship, the licensee is treated as a statutory broker who owes limited duties such as honesty, disclosure of known adverse material facts, and reasonable care, but not the loyalty of an agent.

How does a Montana statutory broker differ from a seller agent or buyer agent?

• a.A statutory broker may never be paid a commission
• b.A statutory broker assists a party without representing that party as an agent and owes no duty of loyalty✓
• c.A statutory broker can only handle commercial leases
• d.A statutory broker owes full fiduciary loyalty to both parties

A seller agent or buyer agent represents a client with full agency duties, including loyalty and confidentiality. A statutory broker assists a party in the transaction without becoming that party's agent and owes no duty of loyalty, though the statutory broker must still be honest, exercise reasonable care, and disclose known adverse material facts about the property.

When must a Montana licensee provide a buyer or seller with the required disclosure describing the available brokerage relationships?

• a.At the first substantial contact, before the party discloses confidential information✓
• b.Only after a buy-sell agreement is signed
• c.Only at closing
• d.Only when the party asks for it in writing

Montana requires the licensee to provide the relationships-in-real-estate disclosure to a party at the first substantial contact, before the party shares confidential information. Early disclosure lets a buyer or seller understand whether the licensee is acting as a statutory broker or as an agent for a party before negotiating information is revealed.

A Montana statutory broker learns the roof leaks badly. What must the statutory broker do?

• a.Keep the defect confidential, since the broker represents no party
• b.Inspect the roof and verify the seller's statements before saying so
• c.Disclose it only after the seller gives written permission to do so
• d.Disclose the adverse material fact to the buyer or the buyer agent✓

A Montana statutory broker is not the agent of either party, but is still obligated to disclose to a buyer or buyer agent any adverse material facts about the property that the statutory broker knows. The same subsection adds that the statutory broker need not inspect the property or verify the seller's statements. Cite: Mont. Code Ann. 37-51-313(6)(a)(i).

A Montana seller agent wants to list a second property that competes with a current client's listing. The agent may do so:

• a.freely, because a seller agent owes no loyalty duty under Montana law
• b.after written disclosure to the seller and the seller's written consent✓
• c.never, since the agent must act solely in the first seller's interest
• d.only if the competing listing lies in a different Montana county and city

Montana's seller agent must act solely in the seller's best interests, but the statute carves out competing listings: the agent may represent multiple sellers or list competing property after written disclosure to the seller and with the seller's written consent. Cite: Mont. Code Ann. 37-51-313(2)(a).

Compared with a Montana seller agent, a Montana dual agent must:

• a.stop disclosing adverse material facts once both consents are signed
• b.disclose adverse material facts to the buyer but not to the seller
• c.withhold adverse material facts a client has marked confidential
• d.disclose known adverse material facts despite confidentiality✓

A dual agent owes the seller what a seller agent owes and the buyer what a buyer agent owes, with one override: the dual agent has a duty to disclose to either party any adverse material facts the dual agent knows, regardless of confidentiality considerations. Cite: Mont. Code Ann. 37-51-313(7).

Without written consent, a Montana dual agent may NOT tell the seller that:

• a.the buyer intends to order a professional inspection of the roof
• b.the buyer has asked to see three other listings in the same town
• c.the buyer is willing to pay more than the offered purchase price✓
• d.the buyer has been preapproved by a Montana lending institution

Montana lists four items a dual agent may not reveal without the written consent of the person to whom they are confidential: that the buyer would pay more, that the seller would take less, either party's motivation, and anything a party marks confidential in writing. Cite: Mont. Code Ann. 37-51-313(8).

Before performing the acts of a Montana buyer agent or seller agent, a licensee must:

• a.obtain a written buyer broker agreement or written listing agreement✓
• b.complete a board-approved agency course within the prior 12 months
• c.file a copy of the agreement with the Board of Realty Regulation
• d.record notice of the relationship with the county clerk and recorder

Montana requires the written agreement first. A licensee who acts as a buyer agent or seller agent without one is still bound by all of the chapter's duties, so skipping the paperwork removes the authority, not the liability. Cite: Mont. Code Ann. 37-51-313(10).

A Montana statutory broker's relationship with the parties continues until:

• a.either party mails the broker a written notice of termination
• b.the broker's current Montana license period comes to an end
• c.the transaction giving rise to it is completed or terminated✓
• d.the expiration date written into the parties' listing agreement

Montana sets a different end point for a statutory broker than for an agent. An agency relationship ends at performance, the agreed expiration date, or an authorized termination; a statutory broker's relationship runs until the transaction that gave rise to it is completed, terminated, or abandoned. Cite: Mont. Code Ann. 37-51-313(11)(b).

After a Montana agency relationship ends, the licensee still owes the former principal a duty to:

• a.act solely in the principal's interest in that party's next purchase too
• b.keep marketing the principal's property until a buyer is found
• c.obey the principal's lawful instructions for one more full year
• d.account for the principal's money and property and keep confidences✓

On termination a Montana broker or salesperson has no further duties to the principal except to account for all money and property and to keep confidential the information the principal directed be kept confidential, subject to listed exceptions such as disclosure required by law. Cite: Mont. Code Ann. 37-51-313(12).

What does a Montana buyer agent owe the seller?

• a.a duty to obey the seller's lawful instructions in negotiations
• b.a duty to safeguard the seller's confidences after the closing
• c.disclosure of known facts about the buyer's ability to perform✓
• d.no duty at all, since the buyer agent acts solely for the buyer

Montana's buyer agent owes the seller disclosure of any adverse material facts the agent knows about the buyer's ability to perform on a purchase offer, a statement when the agent has no personal knowledge of the truth of such facts, and good faith dealing. Cite: Mont. Code Ann. 37-51-313(5).

When must a Montana statutory broker give the buyer the initial relationship disclosure?

• a.within 10 days after the buyer signs a written purchase offer
• b.at the time the seller accepts the buyer's written purchase offer
• c.at the closing table, just before the buyer's funds are disbursed
• d.when the broker first endeavors to locate property for the buyer✓

Montana pegs each disclosure to a different trigger. For a statutory broker the initial disclosure goes to the buyer when the statutory broker first endeavors to locate property for that buyer; the subsequent disclosure goes to the seller side when negotiations commence. Cite: Mont. Code Ann. 37-51-314(4)(a).

A Montana buyer agent must give the seller or seller agent the subsequent relationship disclosure:

• a.before the listing is entered in a multiple listing service
• b.only when the seller has no agent of the seller's own
• c.at the time negotiations with the seller side commence✓
• d.within 5 business days after the seller accepts the offer

Montana's subsequent disclosure is tied to negotiations, not to contract. A buyer agent makes it to the seller or seller agent at the time negotiations commence; a seller agent makes the mirror-image disclosure to the buyer or buyer agent at the same point. Cite: Mont. Code Ann. 37-51-314(3)(c).

A Montana seller agent who is about to become a dual agent must get the parties' consent:

• a.prior to or at the time the dual agency relationship arises✓
• b.within 3 business days after the dual agency has arisen
• c.at closing, in a rider to the parties' settlement statement
• d.only when the buyer requests the consent form in writing

Montana requires the licensee who contemplates or enters dual agency to disclose the potential or actual relationship to both buyer and seller and to receive their consent prior to or at the time the dual agency arises. Cite: Mont. Code Ann. 37-51-314(5).

Montana's initial relationship disclosure must contain, among other items:

• a.the licensee's board file number and the firm's bond amount
• b.a definition of 'adverse material fact' and the party's signature✓
• c.the commission rate the broker will charge the seller at closing time
• d.a copy of the brokerage firm's written office policy manual

The initial disclosure must describe the duties in 37-51-313, carry the statutory all-capitals dual agency paragraph, define adverse material fact, identify the relationship disclosed, and be signed by the buyer or seller and by the licensee and dated. Cite: Mont. Code Ann. 37-51-314(6).

When a Montana licensee is acting only as a property manager, the relationship disclosure rule is that:

• a.disclosing the contractual relationship is a sufficient disclosure✓
• b.no disclosure of any kind is owed to the owners or tenants
• c.the same initial and subsequent sale forms must still be used
• d.a fresh disclosure form is needed before every tenant showing

A Montana licensee managing property must disclose the contractual relationship to all customers and clients. When the licensee is acting only as a property manager, no separate relationship disclosure is required and that contractual-relationship disclosure is treated as sufficient. Cite: Mont. Code Ann. 37-51-314(8), (9).

How do Montana's statutory brokerage duties relate to common-law agency?

• a.they bind brokers but leave salespersons under the common law
• b.they supplement common law, which controls if the two conflict
• c.they are intended to replace the common law in these relationships✓
• d.they apply only when the parties have signed no written agreement

Montana's chapter says outright that its duties govern broker and salesperson relationships with buyers and sellers and are intended to replace both the agency duties found elsewhere in state law and the common law as applied to these relationships. Cite: Mont. Code Ann. 37-51-313(1).