Transcript for:
Real Estate Sales Associate Exam Preparation

[Music] [Music] t [Music] okay guys so what we're going to do today is we're going to start our 63-hour sales associate Cram Course what I did was after teaching the course I put together a Cram Course document that's about 150 some pages and it basically takes each unit of the exam breaks it down to how many questions you'll see and it solidifies the information for a review process so we're going to take this and we're going to start with unit one work our way through uh into a future unit as far as we can today and then we will have a second part where we do from the unit we stop to the end okay so let's start with unit one if you guys have any questions in the meantime as we're going through it just ask the questions and and um you know you have a copy of this I gave you a copy of this so this is something want to reference if you want highlight things or make make notes but these are things you need to know okay so unit one is the real estate business what is it how's it operate what's it constructed of okay 1% of your exam is on this so you'll have one question out of a 100 on this unit okay so we narrowed it down so the first thing you want to do is you need to be able to describe the various activities of a real estate brokerage and and it consists of three things knowledge of property transfer knowledge of market conditions and knowledge of how to Market real estate and businesses that's the three activities and there's five different sales Specialties within those activities okay you have residential business Commercial Business Industrial business agriculture business and businesses okay so residential obviously is um you know resid living commercial is obviously um retail and restaurants and business buildings Industrials is more of your warehousing and your and your um manufacturing agriculture is your farming um or your you know livestock and uh horse farms and and things like that and businesses are either a business with the real estate or a business with a long-term lease when somebody sells a business okay next you need to identify the role of a property manager and the situations that require a cam license okay so property management is Professional Services to maintain and Manage Property on behalf of the owners the scope of their work is detailed in their management agreement it involves leasing managing marketing and maintenance of property now a cam license is required for a salary manager of an association with more than 10 units or an ual budget in excess of $100,000 so if there's if either of those happen you need a cam license if not you don't okay and then describe the activities that require Service uh appraiser Services um the US P forms and state regulation of appraisers and distinguish among a CMA BPO and an appraisal okay so what what are appraisals done for uh and and and the following it's mortgage loans property tax assessment Insurance adjusting investment okay and all the appraisals if it's called an appraisal it must conform to the US Pap regulation and form it be it must be on a form okay appraisal is to originate a federally related mortgage loan um also appraisal that does not involve a federally related transaction does not require a a licensed uh licensed appraiser a licensed broker can do that okay now you have also competit now what's a competitive market analysis that's the CMA okay it's a marketing tool prepared for a buyer or seller okay they analyze recent sales of similar properties properties currently offered for sale and recently expired listings they may not be referred to or be presented as appraisals you cannot call them appraisals they do not have to comply with the US Pap regulations or on a form a fee may be charged for a CMA sales associates compensation must be to the employing broker so if a fee is charged it has to be paid to The Brokerage not the agent right because all all funds come through the broker and then you have a broker's price opinion okay this is a broker's written opinion of the value of real property often requested by A lender for distressed property sale or by relocation companies it's also done when there's hurricane storms and things come through and they want the insurance companies want to check on the properties also when you want to remove PMI insurance from the from a mortgage they do them as well okay again this may not be referred to as or represented as an appraisal bpos do not go on the USP form and do not comply with the US Pap standards okay sales associates May complete a Bo for compensation however the sales associate must be supervised by a broker and signed off by the broker compensation must be paid to the broker who then compensates the agents or Associates who did the work okay now understanding the mortgage process and the role of mortgage loan Originators okay a mortgage originator is an institution or an individual that works with a borrower to complete a mortgage transaction it can either be a mortgage broker or a mortgage Banker okay that's that's what you need to know that for this section so the other thing you need to know is how to explain the three phases of development and construction okay you have three steps you have land acquisition that's when you gather the land buy the land subdividing and development subdividing is converting the land into smaller partials and development is improving the land so it can be used and then number three you have recording the plat map that's what needs to be done in three phases of development and construction okay what are the three categories of residential construction you have speculative custom and track homes speculative is when the Builder builds the home there's no contract no pre-sale they just build them however they want and then people buy them custom is under contract for one buyer one person has a piece of land they design a home they want to have built and the Builder builds that home it's a custom home and track homes buyers see a model home so they have three or four different models and they choose a floor plan to be built on an available lot so they have a lot available over there they like home number three they pick out the colors whatever they want to do and they put on Lot number three that's tracks okay now let's take a look at unit two okay unit two is about real estate license law and qualifications for Li iure there are 6% of the questions on your state exam from this unit so you're going to have six questions out of a 100 okay so the first area you want to look at and what you want to be able to determine is to distinguish among the federal and state laws and administrative rules important to real estate so you have to remember chapter 20 is the umbrella is the executive branch of Florida government chapter 475 Florida statute is the real estate professional practice actor and that's broken down into four parts Part One pertains to real estate brokerages that also pertains to sales agents schools okay and Brokers part two pertains to real estate appraisers part three pertains to commercial real estate sales commission lean act and part four is commercial real estate leasing commission lean act okay so that's your 475 Florida Statutes now you have chapter 455 Florida Statutes and this is a this is is creating the The Business and Professional Regulation okay the dbpr okay it's the legal practice and procedure for the dbpr okay non us and one thing you want to remember for this section is non- US citizens May hold a professional license they have to be they have to have a green card and they have to have a social or a social security number to be able to get a license however they do not have to be citizens you may see something on that okay then you have chapter 120 Florida statute okay and that's going to be your administrative procedures act okay that outlines the disciplinary process for the real estate um for the F for frck for the whole situation that says what the uh process is um when disciplinary is taking taken care of okay and then chapter 61 J2 is actually the rules of the Florida Real Estate Commission it it has to do with all the ethics and it's the rules of what you must follow okay that's what you need to know for that information now let's the next thing is to distinguish among the three license categories okay so you have a sales associate license you have a broker's license and you have a broker associate license so a sales associate performs Real Estate Services for compensation under the direction of a broker or an owner to developer if they're working for an owner developer um an owner developer is an unlicensed entity that sells exchanges or leases its own property such as a real estate development company so because they're they own their own property they can be selling it they don't need a license right sales staff must hold a real estate license if they're paid a commission or compensated on a transactional basis if they're getting a salary and no bonuses and no commissions they do not need to be licensed right then you have a broker a broker requires additional education and passing the broker license exam okay um and then you have a broker associate it they hold a broker's license but is registered and works under the direction of another broker so basically they they're a sales associate who got their broker license however they're still working as a sales associate but now they're called a broker associate their their capabilities and legalities are still the same as a broker associate as they are a sales associate okay now let's describe license application requirements okay you must complete a real estate application you must have your fingerprints done you must have your background check with the FBI and the FDLE okay okay now also you got to be 18 years of age you know and and and of good ethics and morals right now let's describe non-res application requirements and explain Mutual recognition agreements okay so so this recognizes the education and experience from another state or nation that has a mutual recognition agreement with Florida this applies to non-residents only okay if they Mutual recognition there certification of license history and mutual recognition State there's there's a few States I think I think it's 17 or seven or 17 I got to look at it if they have if they Mutual recognition what they'll do is they'll get a license history of of all their history in the state and then they send it in with their application and if they qualify all they must do is pass a Florida specific 40 question real estate law exam and they must get a 75 which is 30 right so for example if they're in another state that has Mutual recognition they're able to submit that information take a 40 question test pass it and get their license now now if they're not in a mutual recognition State and let's say they've been in real estate for two years of the last 60 month worked for 24 the last 60 months and they're a broker they're able to come to Florida use that history and go right to being a broker they don't have to they don't have to do it a 63 hour and be a sales agent for two years then be a broker they actually have the opportunity to go right to being a broker but they got to take the broker course in full and pass it right that's just the way the way it works okay so I just want to make that clear um then you want to be able to identify qualifications for a sales associate license and this is what you need to be have have have qualified to be able to get approved and you must be 18 years of age or older high school diploma or equivalent possess a US social security number be honest trustful trust truthful and trustworthy of good character competent and qualified and and you must disclose if you had any convictions please please of no contest or under investigation any other names or aliases that includes bed names before marriage um had any disciplining action taken against a professional license if you ever denied a real estate license in Florida or any other state those things are what you need to qualify now let's describe the education requirements for post-license education and Contin education so lenses who get their sales associate LIC must complete the post licensing course before the expiration of their initial license so they have a 45-hour sales associate course they must pass the end of course exam with a 75% or higher and they can retake different tests one time so they can fail it and retake it one time or they have to take it over again and then after that your first license renewal when you do the 45h hour after that moving on you have to continue education at 14 hours every two years um for each two-year licensing period and of that 14 hours you have three hours of core law and they may earn three hours of specialty credit by taking core law each year three hours of business ethics and eight hours of a specialty credit so you can take two four hour classes of anything or one eight hour class of anything but that's the that's the minimum you have to take you can take more but that's the minimum okay next you have to identify the qualifications for a broker license okay Florida licensed sales associates must complete a their 45h hour post-license requirement from their initial license they must complete the 72-hour freck course 2 which is the broker pre-license course like you're taking a 63-hour freck one course now the freck two course would be the one for broker now you must have an active sales license 24 months held in an active real estate license in the previous five years so you can have a sales license but it's got to be active for continuous 24 months in the last five years so as a sales associate working for a Florida broker or for a broker in another state you could have that same 24 months in any of the 50 states right as a or actually International too you don't have to it hasn't have to be in the states it just has to be 24 months as a licensed broker right or a sales associate now as a sales associate working for a government agency so you could be working for a government agency in real as a real estate associate or as a broker in another state or Nation as long as it's licensed you must pass the state administered license exam and then after you pass that you have a 60-hour broker post-license course so you have to take the 60-hour post license course just like you did a 45 hour post license course then after that you got to take 14 hours every two years just like the other one okay now let's distinguish between registration and lure with the dbpr okay registration is placing on record with the dbpr the name and address of each licensed broker or sales associate name of the business address and sales associates employer active or inactive license status and broker involvement a real estate entity okay so what you have is lenser is when you have a license a sales license or a broker's license registration is when you have Partners on a business and not all of them are licensed so whoever's licensed obviously is lenser whoever's on the business as a partner and does not have a license would be registered right you register them with them do you understand the difference of that that one seems to be a little a little tricky do you mind cover that again please sure so if you if you're opening a real estate brokerage and you have three Partners one of them has a license and the other two are just or other three are just investors and they're just Partners one's going to handle sales training one's going to handle marketing one and and one is going to be office manager right and then there's one that has a license who's going to be the qualifying broker and handling brokerage activities with the agents so the one who's licensed is licensed and also qualifying broker the three Partners who are not licensed they have to be registered with the dbpr with the state so even though they're not licensed they still must be registered do you understand that yeah and what and what what does it mean by being registered or what are you doing registered is you I mean they're they're put on the paperwork their information is given they're just not licensed they they cannot perform duties they can't show proper proper they can't do any licensed activities they can be an owner but they cannot perform any Li licensed activities okay you register them on the paperwork yeah on on the on the company and and with the dbpr got it all right now let's look at to identify Real Estate Services that require a real estate license and exemp and exemptions for those license licensure like I was just saying if those Partners don't A license they couldn't do any of these right they can just do the training the marketing the office management right so a bar sale is the acronym for it so when you have a license you're able to do these if you don't you're not so you have to have a license it's required to do this to adver advertise Real Estate Services to work with Buyers to to appraise non-federally related transactions to to rent to work with people renting or provide rental information to sell to sell property with people and have clients um auction property lease property to people and exchange property for people all those items you need a real estate license however if you're doing it for yourself you don't right if you're involved in a transaction you don't but the minute it's a third party you must be licensed to do that okay and there's five general groups of exemptions you have one owner exemption I just said that if you own the property or you're involved in the sale of a property you may buy sell exchange or lease their own property that's for individual Property Owners officers directors and corporations and owners of the businesses so if a business has owned the property the person who owns the business can do it Partners in a real estate partnership um if the if the partner only receives normal pro-rated shares of profits so if there's four partners and they're all split 25% you don't need a license if there's four Partners one is 50% and other 25 and 25 you're going to need a license because there's unfair Advantage for the person right they have more experience and they want you to be licensed so there's nothing that's done you know underhandedly and then also owners of time shares if you own your own time share you're able to do that and sell that right now let's look at exemptions based on careers okay so attorneys at law acting in the attorney client relationship okay a Florida attorney license does not entitle attorneys to compensation for performing Real Estate Services they can perform them but they can't charge for those Real Estate Services if they're not licensed a CPA when performing accounting duties State Certified and licensed appraisers when conducting appraisals okay and number three Sal salaried employees exemption okay so if these employees are paid a salary and do not receive commission or bonuses on a transactional basis anyone who buys sell exchange or leases property for their business employer who work in an apartment onsite rental office in a leasing capacity who are managers of a condo or cooperative um apartment units who rent units for periods no longer than a year or if they work for an owner developer which is a real estate velop ER and do not receive commission those salaried employees are exempt okay and let's look at number four court and legally appointed persons okay so if a court appoints an individual the personal representative is des would be these are the examples so the court would be appointing so if you have a person who is designated in a will to handle the to handle the transaction and that would be like an executive of an estate okay and then you also have attorneys in fact okay attorneys in fact are a power of attorney and for that purpose of signing a real estate document so they can handle that document and that's it it's a single purpose power of attorney okay power of attorney cannot be used to authorize an individual to conduct Real Estate Services now what that means is you can't have a power of attorney to do a listing agreement and you can't have a power of attorney to do a contract for either party they have to do that however you can have a power of attorney to close the close the deal they can sign a closing documents okay they can sign a deed right but you can't initiate a transaction with the power of attorney okay so let's look at some miscellaneous exemptions okay so individuals who rent Lots in a mobile home park or Travel Park persons who sell cemetery lots you remember the question we did in our our review right yeah yep registered security dealers selling businesses uh at businesses Enterprises hotel and motel clerks who rent Transit lodging that'll also include Airbnb right and then and then also what you want to remember is the finders fee for tenants is the only time a is allowed to be paid and that's when a landlord owns a building and he has empty units and he tells the tenants if you find me somebody for a unit I'll give you a $50 finders fee you can't give more than $50 and that's the only time that that's allowed okay now I want to go into section three okay section three has 2% of the questions on the state exam so you'll have two out of a 100 and and and unit three is about real estate license law and commission rules okay so the first thing you want to be able to identify and understand is how to describe the function the scope and function of the dbpr and the Dr so Department of Business and Professional Regulation that's the dbpr they're under the executive branch of the State of Florida the chief administ rator is the secretary of the dbpr they're appointed by the governor subject to Senate confirmation you got to remember they're always appointed by the governor subject to uh Senate confirmation not FR confirmation you know they're not appointed by the Senate and appoint and and confirmed by the governor they're appointed by the governor and subject to Senate confirmation okay licenses they they license and regulate business businesses and professionals they're granted legal Powers by legislature they investigate complaints issue subpoenas issue cease and assist orders issue citations okay now the divisions under the dbpr you have the divisions of professions the divisions of service operations divisions of Florida condominiums time shares and mobile homes and the division of real estate the Dr now there's a division director for the Dr anybody who works for the Dr are actually employees of the dbpr they provide services needed to administer real estate law okay it's administrative and ministerial so they're basically recordkeeping duties as well and their office is located in Orlando okay so let's describe the compens composition and member qualifications of the Florida Real Estate Commission okay so there's seven me there's seven Commissioners okay and it's broken down there's five professional licensed members okay four must have H have held a broker license for five years preceding appointment one of them must either be a licensed broker or sales associate who has been active two years preceding appointment and then you have two consumer members who were never licensed and one of the seven Commissioners must be 60 years of age or older so what they're doing is they're taking people who have four of them have experience five years one has a little bit less experience and then two are people who do not have any experience and one of them must be 60 or older the reason they do that they want to keep it Diversified they don't want to have all you know one type of people so things can be heard and discussed and and voted on right by a diverse group of people who represent the the community right that's why they do it that way now you want to describe the commission's general powers and duties you want to be able to understand this and how it works so they have executive power okay they can regulate and enforce license law they Foster education so all the programs and all the the schooling they handle all of that they adopt and seal Prima fasy evidence so that's evidence that you know is is proven on its face so if somebody has a real estate license there's the real estate license is the proof they have it right so they adopt and seal that and they establish the fees for licensing and fines and all that stuff right they're quasi legislative they enact and revise administrative rules and bylaws they Pro promulgate which is adopt the rules and bylaws into effect and then they regulate professional practices they're quasi judicial so that means they can grant and deny applications suspend or revoke licenses and issue administrative fines they make determinations of violations they inform the division of Florida condominiums time share and mobile homes when any disciplinary action is taken you remember seeing that on our practice exam right that concept yeah the F activities are limited to administrative matters so they're handling all administrative matters and that's all they're limited to do okay so you need to distinguish between what an active and inactive license status and describe the regulations regarding involuntary inactive statuses so the first thing you need to know about this is an active license is required to to perform Services of real estate for compensation voluntary inactive status this is when a license e requires inactive status its voluntary and active licenses lenses must complete education and renewal requirements so they can be current inactive but they still need to do their 14 hours and their education is submitted because if not they're going to go involuntary inactive right they must keep that up so involuntary inactive status is when you fail to renew the license before the expiration date after two years an involuntary inactive license is null inv voided right remember we had a question like that right involuntary inactive status reactivation education so if you're inactive involuntary for 12 months or less all you have to do is complete your 14 hours contined education course and you'll be reactivated if it's more than 12 months but less than 24 months you must complete a 28 hours of fre prescribed reactivation education courses and once you do that you can be reactivated but if it goes over one day more than 24 months you're you lose your license you're null and void you got to go back and start over okay now let's distinguish between multiple and group licenses you remember seeing something on this right when we did our exam right practice exam yep multiple licenses are issued to a broker who qualifies as the broker for more than one business entity so for example I have I'm the broker owner and qual qualified broker for Pier 21 realy if I want to open Pier 22 realy Pier 23 realy Pier 24 realy I can do that I would have multiple license I would be the qualifying broker for each each each uh business there's no limit to what you can do that way okay so for each business that a person is a broker or a separate broker license must be obtained sales associate and broker Associates are registered under one broker's entity so you can't have like if I have agents work working for Pier 21 reality and I had Pier 22 reality they can't work for both it has to be they can't they can only be with one brokerage right okay now a group license are issued to sales associates and broker Associates who register under an owner developer a real estate developer okay this is when an owner developer has multiple developments being built okay and and the owner developer sends a dbpr a list of the legal company names with the same ownership the sales associate or broker associate has one license one employer or the developer and then they can work any of the developer sites so they can go from site to site and sell those properties however they can't go outside of that and sell Properties or List properties they can only work for that broker right or that developer I'm sorry that developer all right and that's unit three let's take it what we're going to do now is we're going to take a 10-minute break and we're going to come back and we'll start with unit four okay now we are going to start unit four which is authorized relationships duties and disclosure and on your state exam you're going to see about 7% of the questions so you'll have about seven questions from this unit okay so what we want to do first of all is to distinguish among agency relationships in general business dealings so you have a principle okay the principal is who delegates authority to another that's your seller that's your buyer right they're delegating authority to you right then you have the agency um agency relationship creates a fiduciary relationship okay it's an UNR unrelated relationship it's opposite of an arm length arms length transaction okay and the warning is caveat empor it's buyer beware okay now there's two types of agents in general business dealings okay P agents are persons who who is authorized to represent and act for a principal okay you have a general agent who handles everything and you have a special agent who handles a primary role right so you have General and special agents okay now we need to be able to describe the three brokerage relationship options Okay so the first option is a no broker's relationship that's where there's non-representation the seller or buyer can choose to opt out of this representation the broker will facilitate the sale and purchase and may not negotiate or work on behalf of the customer okay then you have signal agency this is where a broker who represents a a principle as a fiduciary either a buyer or seller but not both in the same transaction and Florida that would be dual agency and it's illegal in Florida okay so you can't have those duties owed to the buyer and the seller so if you have a seller and you're in a single relationship the only way you can represent that buyer would be in a no- brokerage relationship because you have no no duties to them right none of those those um um specific duties fiduciary right the other option is you'd be able to transfer like you could take you could be a single agent with the seller use a transition to transaction broker and be a transaction broker for the buyer and now you can work for the transaction which we're going to talk to in a second that's one option but legally if you're a single agent for the seller and you're not changing your status the only way to represent the buyer would be is a no brokerage relationship or they would have to work with another brokerage okay now let's look at the transaction broker relationship this provides limited representation to the customer or the client right the customer is the buyer the client's the seller right that's rule of them so a buyer seller or both it does you do not represent either the buyer or the seller as a fiduciary or as a single agent you're representing a transaction and the the the customer and the client is not responsible for the actions of the broker so they're acting on their own behalfs right so let's describe the duties for each of these relationships so describing the duties owed in a no brokerage relationship this would be non-representation you have three duties you have um the the acronym is add account for all funds deal honestly and fairly disclose all known facts that materially affect the value of residential property that are not readily observable to the buyer these three duties are required in all types of brokerage relationships so all three of them have these standards these are the minimum standards for all three okay now let's look at the duties that a single agent has in addition to these so again they have ad account for all funds deal honestly and fairly disclose all known facts that material affect the value of residential real property that are not readily observable now what does it have in addition you must use skill care and diligence present all offers and counter offers confidentiality obedience obedience to the point you're not doing anything illegal right obedience you got to listen to them but you cannot do anything illegal loyalty to them and full disclosure anything at all right all information has to be disclosed now let's look at the duties that are owed in a transaction broker relationship again you have ad right account for all funds you honestly and fairly disclose all known facts that materially affect the value of real property not readily observable you must use skill care and diligence in the transaction And Timely present all offers and counter offers that sounds familiar right because because the single agent has that too interesting so they both have ad they both have skill care and diligence and presenting offers and counter offers however there's two here that the the single agency doesn't have and that's exercise limited confidentiality unless waved in writing by a party and perform additional duties mutually agreed to now the way you can remember that in in a single agency you have obedience you must listen to them you know you don't have limited and and you have confidentiality you don't have limited right so you must here you can exercise limited confidentiality as a as a single agent you must exercise confidentiality and perform additional duties agreed to you must have obedience in the single agency here you can perform additional duties if you agree to them in writing on the listing right so if a c a CL a client says to you I don't want people walking through my unit with their shoes on so you can either put plastic booties on or take your shoes off right that's something you can agree to in writing now if you're a single agent you must do that like you don't have a choice right okay now let's describe the process from transition to sing from single agent to transaction broker so if you have a listing and you're a single agent a single agent relationship may be changed to a transaction broker relationship so if you have somebody that says hey I want to look at this house you cannot legally show them that house unless they sign if you're you're a single agent you list a home somebody says Hey I want to look at that home to you or anybody in your brokerage you cannot legally show them that home unless they sign a no- brokerage relationship or you transition to a transaction broker so you go to the seller hey can we transition to a transaction Brooker I have somebody a buyer wants to look at your house the seller can say no and then you they'd have to sign no Brokers you got to tell them to go somewhere else and have an agent show them the house right that's that's what happens so if the seller says yes there's a form you transition to a transaction broker you signed the form now now you're transaction broker for both right and then you cons they do the consent and then you show the property right good all right um now if you want to be able to describe the disclosure procedures and the required content in format of the disclosure notice so written disclosures are required in residential transactions when operating in a single agency or a no- brokerage relationship so if you're being a single agent or a no brokerage there's a disclosure okay a residential sale is defined as improved property of four or fewer units unimproved property zoned for four or fewer units residential units agricultural property of 10 or fewer Acres okay duties must be described and disclosed in writing if you're a single agent or a no- broker's relationship if you're a transaction broker no because in Florida you're presumed to be a transaction broker so if you don't have a single agency or no brokerage you're presumed automatically transaction broker okay so there's no form for that one okay can be included in the listing agreement okay so if you're going to list a home the the disclosure for single agency must be in that listing agreement can't be after that you could do it before you could do it up to the listing agreement if it's dated after it you broke the it's not you broke the laws it's too late right a single agent disclosure before or at the time of entering into that listing arit or before showing property it's the no broker's notice must be before showing property so if you have a if you have a listing and it's single agency and you're going to show that property to somebody they must sign that no brokerage agreement prior to walking in that door right um I have a question sure so when it comes to the definition of residential like I'm a little confused when it comes to that because just now we're saying that a residential sale is when the units are four or youer whether they're un improved or they are improved whatever the case may be yeah if it's built or not agriculture it yeah know go ahead so it's or not yeah you froze up there for a second so if the has four or fewer units on it or it's zoned for it it's just flat land that's considered residential so go ahead got got you got you but previously we were saying that every where where people reside it's considered residential no anything anything for or few units is residential building zoning anything five or more units is commercial is is commercial so if it's an apartment complex of 100 people it's commercial what you what you're confusing it with is the uh depreciation on tax so when you're when you have a property and it's and it's residential it's 20 it's a 27 and a half years your depreciation when it's commercial it's 39 years the IRS for tax purposes if people live in it as a home it doesn't matter if it's one unit or a thousand units the IRS considers that residential and that'll be 27 and a half year depreciation if it's a business you understand so so for loan purposes for residential zoning purposes four or fewer units is residential the many you hit five units and up it's commercial for Zoning for Lending purposes right you know for for um you know um all the Discrimination laws all that is residentials for a few units now when you go up to five units or more the IRS sees that as residential if it's one unit or 100 units so don't confuse the depreciation calculations with the classifications for zoning okay does that makes sense now yeah yeah so so four or fewer units yeah it is considered residential but that's only with lending that that what that's with that's with lending that's with zoning lending and Zoning okay right so if you go to buy a house if you go to buy a house and it's four units and you're going to live in one of them it's treated as a single family home is treated the same one two three units four units for Lending purposes however you're able to use those leases 75% of the value towards your income for those units yeah yeah to get Pro for it yeah right so that counts towards your income for your debt ratio so that's what you know don't confuse tax depreciation for the IRS for income properties right that make sense and the lending yeah yeah I got you I got you I got you so's tax purpos tax purpos is either residential or commercial there's no there's no split on that right oh okay gotta because you got to think about it tax-wise first of all it's not owner occupied when you're doing depreciation it has to be an investment property so it's either a single family investment duplex Triplex there's no ownership there's no living in that because you can't depreciate the property you live in got it your own your own rock it's only for investment property so that just don't yeah don't get that confused I know how it's easy to get it confused but once you start doing it it's it's a like a wall between it okay got it okay you got it okay so four fter units building or land is is residential okay five or more is up good okay so these duties must be described and disclosed in writing with the with the forms okay yes that's what you need to know and like I said before you show property where you're a single agent in the listing you must have a no broker's notice signed before you show it okay or you break the law okay let's look at the types of transactions that do not require disclosures okay so the disclosures we just talked about there's all I just told you that the transactions that need them right so let's look at the ones that don't need them so anything that's non-residential okay non-residential transactions don't have disclosures rent or lease agreements don't have disclosures accept options when you have an option contract there is a disclosure disclosures are required business opportunities when it's four or fewer residential units as an exception right so business opportunity if you're buying a one to four unit property as an investment you do need disclosures however if you're buying a pizza shop or a restaurant or or something you don't these disclosures are not required auctions real estate auctions and also when appraisals are done there's no disclosures okay now let's let me describe the disclosure requirement for non-residential transactions where the buyer and seller have assets of a million or more this is the one time in Florida where you're allowed to have dual agency so when it's non-residential itial the buyer and seller agree and they have one million or more in assets there's something called a designated sales associate so they can you can have a brokerage with a single agency listing for non-residential okay and a buyer says I want to be represented single Agency for for you know for privacy and for you know disclosure in that case one a broker can designate two agents and they need to complete a designated sales associate form and at the request of the buyer and seller that broker May designate the sales associat to act as single agents for different customers in the same transaction the buyer and seller must have assets of a million dollars or more and prove it okay and the written disclosure would be a you have to have a single agent disclosure for each the buyer and the seller and also a designated sales associate disclosure for the buyer and the seller and that would be legal and that would be allowed but only non-residential million or more in assets and they have to agree buyer and seller you good on that yes you need to understand that okay yeah I do I do um now let's list the events that will cause a brokerage relationship to be terminated so you have a broker's relationship how does it end number one fulfillment of the broker's relationship purpose so if the contract closes right deal closes it's dead it's over mutual agreement to terminate everybody decides okay let's just end the and the agreement okay it's done expiration of the agreement the time runs out okay the broker renounces the relationship by giving notice or the principal revoke revokes the relationship by giving notice death of a broker or principal destruction of property or eminent domain and bankruptcy of the principle or customer so the seller or the buyer goes bankrupt that'll that'll kill the contract there are your ways the contract can be terminated you need to know those as well okay now let's go to unit five this is one of the largest um units on the exam 12% of your exam comes from this section of the of the class of the of the review okay so unit five 12 questions 12% it's about real estate brokerage activities and procedures it's how the operations work it's it's how everything's done okay so what you need to know you have to be able to identify the requirements for a broker's office and explain what determines whether a temporary shelter must be registered as a branch office so remember it has to be an enclosed room in stationary construction okay it doesn't have to be its own building it could just be an office within within an office or an office within a building right Brokers must keep their records in the office and they can be digital okay office may be in the broker's residence verified that the zoning and HOA allow it if they're in an HOA or zoning okay like our building our building for our Brokerage in school it's zoned commercial residential it could be a house or a brokerage it's zoned that way where we're located it's private it's not in a community you know it's on a main road okay so I you know when I did that for example when I when I got my license in Tennessee I had to send them the the zoning to show them that it was commercial before they would allow this firm to be licensed in Tennessee got it okay may have offices in another state which we do sales associates may not open and register an office of their own sales associates may have an office in their home and use that has tax deduction and stuff for their taxes but they cannot bring clients there and they cannot advertise that office a broker must register each branch office okay branch office registrations are not transferable to another location so for example if I want to move my school in brokerage this is my main office I can move this license however if I open an office in another city and I say okay I want to take that office and move it to another city you can't transfer that you have to close that office and get a new license for the other city does that make sense yeah you got to remember the difference of that you can actually move your main one but you cannot move a branch one okay all right got it you there no license for that yep now temporary shelter not a branch office unless sales associates are permanently assigned or sales transactions are closed there so if there's a development or a building and they have temporary like buildings outside or mobile homes or mobile offices they do not need to be licensed unless you have people assigned there schedule wise like so many hours a day and and that loan that deals are not closed there if it's closed there or you're scheduled there you must have a license okay go there go what page was I on I think I just slipped through there we go that's better okay all right so we're here okay good now you got that so temporary shelter is not unless they close the deals there right we just talked about that yep let's look at the next so now we need to list the requirements related to sign regulations okay so if somebody's a sole proprietor and are using a trade name okay the sign must have the trade name name if there's one used the broker's name and the words licensed real estate broker or LIC period real estate broker okay the names of the sales associates and broker Associates are optional if they're included the names must appear not appear misleading false or deceptive or fraudulent okay if the brokerage entity is a partnership Corporation or limited liability partnership company the sign must contain the following the name of the firm or Corporation the name of at least one active broker and the words licensed real estate broker you cannot put LIC period has to be licensed real estate broker okay now we need to list the requirements related to the regulation of advertising by real estate brokers okay so anyone who advertises or claims to be providing Real Estate Services is acting as a broker so if an agent is running an ad and they run that ad and don't have it approved by their broker or they're running something eror the broker is responsible the broker gets in trouble and so does the agent so advertising must inform people that they are dealing with a lensey or a brokerage firm the broker is responsible for all advertising they can't say I didn't know they ran that ad what do you want me to do nope you I I have a policy where all ads have to be approved by me before you run them and I I just put into effect if you run an ad without my approval you're immediately removed and you're fired like you're not working at The Brokerage anymore because of that so I actually there's no there's no chances there's no oh I made a mistake it's very clear it's very made very clear when I hire people if they do it I'll deactivate their license then I'll tell them that that's how I'll do it like I won't even wait right so it must uh so that that's the the important thing it's going to affect you know the brokerage if if somebody does that you know all right so let's talk about um see okay let's talk about um the ads so the ads must have the logo name of the brokerage like you know we have I have a logo that must be in every ad it's a standard logo and it's what's required in all three states so Florida requires things North Carolina requires things Tennessee requires things some of them require different things so I made one logo with everything for all three states in it so in some states I have too much and some states I have you know what they need so I just have one logo because if somebody from another state sees my logo and says hey this isn't you know it's what it is it's One logo for everything that must go in all advertisement okay so let's talk talk about team advertising okay the name or logo used by one or more lenses who represent themselves to the public as a team or group the team concept allows broker Associates and sales associates to join forces to serve a wider group of customers more efficiently teams must advertise in the name of the brokerage firm okay A Team must file with the employing broker the name of the lensey whom the team designates to be responsible for ensuring team advertising complies with license law the register broker must at least meet monthly with the team and maintain the record of the team members who's who's on the team who's off the team who's on the team as they bring people and and and get rid of people okay the team name and ads must appear must be no larger than the name of the register broker team advertising rule applies to all forms of advertising by the team social media print paper whatever they do certain words are not not allowed in team names okay so the word agency Associates broker brokerages company Corporation Corp Inc LLC LL LLP LP partnership Properties or property the word real estate or realy cannot be in the team name okay and then there's something called Blind advertisements this fails to disclose the name of the brokerage firm and includes only a PO Box telephone number and or a street address blind advertising is illegal for licensed real it's illegal you can't do that let's look at per personal information advertising okay lenses may use their personal name and ads provided it's included their last name as registered with the dbpr yard signs and classified ads must must include register name of brokerage firm promotional mat materials must have the name of the brokerage firm the sales associates name must also appear Internet advertising point of contact information is the means to contact the brokerage firm or a lense including mailing address street address email address telephone or fax number brokerage name must appear adjacent or immediately above below point of contact information okay that's what we were talking about you asked me a question about that yesterday I believe when we were going over the uh practice exam right yes we were yeah right explain the term immediately as it applies to earnest money deposits so when you get a deposit see today a lot of people wire money like for example we just put a deal on their contract they wired the money I got the letter today they wired the money yesterday I got the letter today saying the money's in the account so the escro company sends a letter escro deposit letter today you don't get checks so much but you need to know this for license law so if somebody's putting a $10,000 deposit down they write you a check for $10,000 right the sales associate and broker Associates must deliver that no later than end of next business day you get it on Thursday by the end of Friday you get it on Friday by Monday right you get a check people do it immediately like right away but you have that time legally now the broker must deposit in the escrow account no later than end of the third business day following receipt by The Brokerage so the day that the agent gets it says Monday that's that's day zero right the brok so Monday and Tuesday's day one Wednesday's day two Thursday's day three right that's how that works that time coincides with the with the brok with the agent getting it to the broker okay you clear on that yes sir good now let's describe the four settlement procedures available to a broker who has received conflicting demands or who has a good faith doubt as to who is entitled to disputed funds okay the acronym is male you have mediation mediation is informal there's a neutral party and they negotiate a settlement arbitration is binding judgment by a third party and this it has prior consent of the parties so they both agree we're going to go into this arbitration the person who's doing the arbitration is going to decide and we're going to follow what they say no matter what even if even if you lose right and then you have litigation okay there's an inter pleer that means the broker has no Financial claim they're just involved in it they're holding the money if it's in their escrow account right and then the judge makes a declaratory judgment and the judge declares each party's rights to the funds one party can get it all he can make them split it he he can do whatever he wants right or she and then you have the escro dispersement order that's the Edo the you'll get that from the state they'll give you an es escro dispersement order and the broker must follow that edl okay question so when it comes to this settlement procedures um is that something that is specified in the sales contract way prior to cont it's actually in the contract yeah it's actually in the contract y got you okay it's actually the procure is actually in the contract the contract has information about it now they can choose what they want to do now this only happens when the broker is holding the escrow if the Title Company's holding the escrow this never happens right got it gotta remember that all right if the broker is not holding escro they can go right to litigation right they can still do mediation it's all in the contract but you know the title company will not release it until you know they both agree or court order right makes sense okay so now we got to explain the rule regarding the advertisement of rental property information or list on negotiate negotiation of rentals okay lenses who furnish rental information for a fee must provide a receipt with Provisions for repayment okay now as of January 1 this information was removed from the exam however I'm still teaching it because students are telling me they're still seeing it so again this is coming off this no longer applies but you need to know this in case you see a question about it okay so the lenses who furnish rental information for a fee must provide a receipt of the provisions okay they must give a 100% refund if the rental information is not current or inaccurate 75% of the fee paid if the customer does not find a rental you must return that the refund must be requested in 30 days if they wait 31 days they don't get it okay it's a first-degree misdemeanor for selling out ofd or inaccurate rental information now the reason this doesn't apply anymore can you imagine printing out rental information and hand it to somebody by the time you hand it to them it's already inaccurate because another one went on the market and two of them went under contct in that 15 minutes right technology has surpassed this you know like no one you can't give anybody accurate information it changes every five minutes when rentals change right so everybody be criminal if they did that everybody so that's why it's gone away but it's it's still if it pops up you know if you see it on your test let me know you know as if as people start start not seeing it then I'll remove it from the from the teaching but okay sense next we have to describe the regulations regarding lean rights for unpaid sales commissions okay so only Brokers not Associates can seek compensation from buyers or sellers right because the broker agreement is with the buyer and the seller the agent is the authorized person right leans on residential property from non-payment of commission it's only allowed if the broker given the authority in the listing contract otherwise they have to seek civil judgment go to court and sue them you see that's what that's what I remember that's why I chose what I chose but I just now see This Is Res this is residential but not only that the the the broker has to be allowed in the listing contract yeah the the the answer for that most of the time is gonna be to F and lawsuit yeah yeah now here's an example if you're listing a $3 million property and a commission is10 Grand you could put in the contract I'm going to put a lean against the you know commission off the proceeds that's a lot of money somebody wants to fight you on that you know what I mean and and most people will agree the lean goes on and then you get paid at closing it clears the lean right so it just depends you know wait it depends like on a normal transaction I I've never really used that so personally but on Commercial Business I would on any commercial deals you put a lean but but when residential I mean unless it's something significant and you think you're going to have a problem you know because you gotta go to courts you take time and money you know it's just you know if it's a super huge thing or you don't trust somebody or something doesn't seem right you have the right to put it in the contract you know so I got it but but even but even then I think we we we learned something referring to where the lean should go because is in order for the in order for the sale to be processed the deed has to be clear right yeah yeah so like you know on this it may not encumber the title of the real property so you'd have to put it on assets you'd have to put it against them personally another another property deal you can't put it on the property that you're selling correct yeah on Commercial you do it goes on the proceeds so okay so it may not encumber the title of the property because you can't stop the sale from going right for yeah okay now when it comes to commercial right chapter 475 Florida statute part three is about commercial right and that's about the leans for you know sale of commercial property right chapter four is lease of commercial property so 475 part three about the sale leans it gives the broker the lean rights on sellers net proceeds from the sales of the of the profit property not lean rights on the property so if they're making $2 million and your commission's 200,000 you put the the lean rights on the property's profit not the property does that make sense yeah makes total sense okay now on a lease it goes on the property if you're if it's a lease you're doing for the landlord who owns the building that lean would go on the property because the property is not transferring it's right it's a leas not so the broker's agreement the listing contract must clearly State the broker's lean rights if you're putting leans on okay now let's let's look and contrast the features of and requirements of the various types of business organizations who can get a license who can't right so a sole proprietor can be licensed right it's owned by one person the owner has full liability the owner must hold an active broker license and they must register under their own name or a trade name okay general partnership two or more Partners engaging a business together created by written oral or implied agreement each is liable for the partnership's debts and can bind the other partners in contracts real estate brokerage general partnership it's registered Partnerships with the dbpr at least one partner must be an active broker right so if one part one one partner is an active broker and the other isn't the active broker is licensed the other one is registered right like we were talking about the difference Partners who deal with the public and perform Real Estate Services must be active Brokers sales associates may not be General Partners limited partnership created by written instrument filed with the Florida Department of State one or more General partners and one or more limited partners limited partners make invest of cash or property not Services right so limited partners are just the are the money behind it they're not handling the business okay limited partners have limited liability okay real estate brokerage limited partnership it's registered limited partnership with the dbpr general Partners who perform Real Estate Services must be active Brokers at least one General partner must be an active broker all other General Partners must registered with the dbpr don't have to be licensed they must register right yep um question for you so the soul pro pro I don't know how to say that that sole proprietorship soulle proprietorship that thing um what how do you say the one with the with the church like the one for the church oh we're gonna get to it we're gonna get to it we're not there yet I know but my bra just say right now that's a corporation Soul oh Corporation Soul I'm supposed to Soul okay yeah Corporation Soul cannot be a brokerage remember that's a religious that's a religious entity yeah sole proprietorship is just one person acting as themselves trade name social security number no business right no no separate entity okay all right so also to finish up the limited partnership sales associates may not be General Partners however sales associates could be limited partners they could be investors but they cannot have any company making decisions right and the limited partners do not register with the dbpr the general do the limited partners do not okay a limited liability partnership this is protection from personal liability partners are not subject to limitations imposed on limited partners in a as in a traditional partnership limited partnership the name name of the limited liability partnership must include registration limit liability partnership or LLP at the end of the name okay then you have corporations okay Corporation is an artificial person or legal entity created by law they file the article of incorporation with the Florida Department of State foreign corporation is organized under laws of another state and they may do business in Florida domestic corporations are Incorporated in Florida okay managed by board of directors and officers and it may be for profit or nonprofit okay okay any questions on that no okay then we have real estate brokerage Corporation they register it's a register Corporation with a dbpr at least one off officer or director must be an active broker okay active and inactive Brokers and unlicensed people may Ser as officers and directors okay they must be active Brokers to perform Real Estate Services unlicensed officers and directors must register with the dbpr sales associates may not be an officer or director sales associates may be a shareholder they have they can have stock and invest but they cannot be an officer or director and last is a limited liability company this has the best features of a corporation and a partnership you have protection from personal liability and the IRS treats the the LLC as a partnership for tax purposes income is taxed only once in as in a partnership so when you're a company you get taxed on the income and you get taxed second on the profit like act what's left over you don't have that in an LLC okay there's only one taxation okay do you have any questions on on unit five this is the end of unit five oh no no no I don't have any questions though right good okay let's look at unit six uh which is violations of license law penalties and procedures okay so you're going to have 2% of your state exam on this unit so that'll be two questions out of a 100 so what we need to do is to distinguish among the legal terms presented in this unit so the terms you need to know is breach of trust that is breaking of a promise or obligation concealment is withholding information culpable negligence is negligent conduct fraud is the intention and Reliance on that deception to get someone to part with something of value or legal right material fact is relevant information misrepresentation is an untrue statement or fact and moral turpitude is conduct contrary to honesty and good morals crimes include embezzlement Larsen and robbery okay and what we need to do is be able to explain the procedures involved in the reporting of violations the element of a valid complaint and the investigation of complaints so the first thing that happens is um a complaint is filed with a dbpr the division of real estate okay so the complaint is an alleged violation of law or rule the uniform Complaint Form the complaint process is consumer-driven in writing to be legally sufficient it's legally sufficient if a VI if there's a violation of Florida statute 455 and 75 DB PR rule or freck rule okay the complaint is investigated the Dr has the authority to initiate an investigation okay there's an inspection or audit of a brokerage office if needed the complainant is the person who files the complaint okay the copy of the complaint is sent to the subject of the investigation the subject May submit a written response the Dr conducts an inves a so the Dr will issue an investigative report they submit a report to the dbpr general Council to determine the type of violation that may have occurred the complaint and informant are obtained during the investigation are confidential until 10 days after probable cause is found okay so no one knows this is going on until probable cause is found if probable cause isn't found it's never public okay so number number three you have a determination will be made so the determination is made as to probable cause so if if they find probable cause which that means reasonable grounds for prosecution okay they'll conduct a probable cause panel so each probable cause panel is composed of two individuals one panel member must be a current uh currently serving on the commission and at least one member must be a former or current professional commission member okay but one has to be current for sure there's a grand jury Arrangement okay so that means the determination is made by majority vote as to whether probable cause exists okay the complainant and subject of the complaint are sent written notifications of the outcome and at this time the case may be dismissed okay or dismissed with the letter of guidance if there's no problem cause okay does that make sense pretty clear yeah yeah yeah it's pretty clear now let's look at number four okay let's say probable cause is found okay a formal complaint is then issued when that probable cause is found okay the administrative complaints sent are sent by email regular mail US mail or or certified mail to the address of record okay the probable cause exists the DB files a formal complaint the allegations of facts and charges against the leny the copy is sent to the associates broker the election of Rights form is sent with the formal complaint remember the election of right form if you get that you have 21 days to respond you don't respond you're admitting to guilt right okay good so number five an informal or a formal hearing is conducted an informal hearing is conducted if there's no disputed facts the case is heard by frck at the commission meeting the L admits to the facts of the case the L can submit mitigation in hopes of reducing the penalty the frck probable cause panel will be excused um and then they decides the case and impose the penalty at that point the final order order is issued at that point FR issues the final order the final decision as to innocent or guilt and the penalty the pro probable cause members will then be excused uh FR considers the law judges report and recommen recommended order that the and filed exceptions and copies are are mailed to all parties okay the final order may be appealed so a lense May appeal the order 30 and so if they get the order they can appeal it up to 30 days that appeal is filed with the dbpr an addition District Court of Appeals the L May request a stay of enforcement that means if they're getting their license revoked or suspended this will stop the suspension or re revocation pending the appeal so while the appeal's going on you'll still you know it won't affect you because you're innocent until proven guilty right so even all this was done you're now you're appealing it so until that appeals worked out you still have the right to appeal right and to do real estate business yep and then if that is if that is done it's a RIT of supers cedus that will supersede the freck order until the appeal is heard so you can get appealed you can get it turned around or you can get it appeal and lose but then you'll lose your license then right or you'll get it reinstate or it'll be reinstated and you'll never lose it actually if if you're if it's overturned by the appeal okay all right so let's describe the the composition of the probable cause panel which we just we talked about that okay um each probable cause panel is comprised of two people like we said one p one member must be must serve on a commission one member must be current or former commission member okay let's describe the hearing process if the subject of the complaint fails to timely respond to the election of Rights yeah 21 days right the L the ly respondent has waved the election of Rights and by default admits the charges the case proceeds and is heard by frck in an informal hearing the L May request a formal hearing the formal hearing required if there are disputed facts if you if you don't agree and and and plead guilty you'll have a formal hearing okay the dbpr must agree that there are disputed facts Florida statute 120 it it's in the Divi division of administrative hearings and there's an administrative law judge who oversees it okay the administrative law judge will give a recommended order okay that recommended order gets submitted to frck okay there's a findings of fact a conclusion of Law and a recommended penalty in accordance with F's range of penalties that's the order the judge says it's guilty or not guilty here's the conclusion here's why and here's what I recommend right um at that point um FR recognized the events that would cause a licensed application to I'm sorry at that point um the the the recommended order goes to frck and then they make their decision right they don't have to abide by that but they usually do okay so the next thing you have to do is recognize events that would cause the license application to be denied okay now remember administrative freck is is only allowed administrative penalties right they can't do any it's all administrative so I want to go over remember we had this little spreadsheet in our course that we created so you got to remember these are the penalties right remember you ask me about the notice of non-compliance remember in the practice exam we were talking about that yes sure so the most minor is notice of non-compliance by the division of real estate the citation is minor by division of real estate reprimand Minor by frck denial of application or license Minor by frck probation you're getting more serious right by frck fine by frck suspension by frck it's pretty severe revocation is done by frck okay now you need to distinguish among the various penalties that may be issued by a court of law right because that administrative is is Administrative right that's not criminal the court of law is money and criminal right yeah so you have civil penalties are imposed by civil Courts for example a buyer sues in civil court for mon monetary damages resulting from unpaid rent to broker's culpable negligence let's say the broker was a that's say a broker was a property manager you know maybe they didn't collect the rent and give it to the give it to the owner right so this could allow a buyer to file a complaint against a broker's license with the Dr for possible discipline not only can they sue them in court they can also file a complaint um about discipline and then criminal penalties are issued in Criminal Courts okay so in an investigation if a dbpr finds any criminal violations or any activity they must report that to the state attorney's office and then they'll they'll proceed if they want to prosecute right so let's look at the criminal pennies penalties right a second degree misdemeanor is punishable by up to 5 $500 fine and up to 60 days in jail First Agreement demeanor is up to ,000 fine and one year in jail up to one year in jail and a third degree felony is up to $5,000 fine up to five years in jail so that's the penalties you need to know for your examination okay explain the provisions of a real estate Recovery Fund we need to understand that so the Recovery Fund reimburses consumers who have been financially injured by a ly it's the last resort though you got to sue them you got to try to get the Judgment served and and if they if they have no assets then you use this it involves a civil suit in a Florida court for monetary losses suffered in Florida real estate transactions the losses are caused action or Lo the the losses are caused by actions of a real estate license Z the fund will never reimburse punitive treble or interest on judgments just actual damages a broker who complies with an Edo may be reimbursed the amount of the Edo the broker's attorney's fees and costs remember if they're found not guilty remember if they they do they follow the Edo and then people and if they lose they'll reimburse and you don't have to pay that back right if the plth prevails in court the fund will reimburse the plaintiff's attorney's fees and court costs as well that's clear you're good on that clear on that all right and that is the end of unit six review okay now we're gonna come into Unit Seven okay federal and state laws pertaining to real estate okay there's going to be 4% of the exam on this on this section okay so that means four questions that you're going to see okay do you have any questions on this unit before we start on this one yep nope right there we go okay so let's the first thing we have to understand is we need to be able to describe the features of the Civil Rights Act 1866 1964 and 19 68 and explain the significance of the Jones mayor court case so Civil Rights Act of 1866 it prohibits discrimination based on race and all real estate transactions sale or rental in residential and commercial no exceptions and a Jones vers mayor Supreme Court case was the ignition for this okay the Civil Rights Act of 1964 it ended racial segregation in schools workplaces and public accomodations it prohibits discrimination based on race color religion and national origin public accommodations are like hotels restaurants gas stations places of entertainment and the public facilities uh also government run facilities public pools things like that like public places libraries things like that in 19 then the Civil Rights Act of 1968 is the feral Housing Act with the Amendments that's the changes this is where title eight of civil rights Rights Act was created in the act of 1968 it made discrimination it makes discrimination illegal in sales leasing advertising sales or rentals financing and brokerage Services if based on race color religion sex national origin okay and in 1988 they amended it it included disabilities mental or physical and that includes any physical or mental impairment that limits major life activities okay let's look at familial status also it adds in addition to the me mental mental uh disabilities it added familial status and that's families with children under 18 and pregnant women they cannot be discriminated against okay and in in 2021 there was another edition of sexual orientation and gender identity okay the president ass signed an executive order requiring HUD to enforce Fair Housing Act prohibiting discrimination based on sexual orientation and gender identity HUD extended Pro protections based on sex discrimination to include sexual orientation and gender identity at that time in 21 okay the next thing you have to do is list a property that's exempt from 1968 Fair Housing Act and describe the types of discriminatory acts that are prohibited under the Fair Housing Act okay so the provision of the fair housing act any residential transactions are covered okay government own owned privately owned if broker is employed to sell or rent the property single family homes owned by a business entity single or rent or rental single or rental owned by persons who owns four or more units multif family housing of five or more units multif family housing of four or fewer units if the owner does not reside in one unit now there is an exemption if you have a four or fewer unit and the owner lives in one this that is exempt for some reason okay the exemption from the familial status protection you know you have housing for older persons act 55 and older communities 62 and older communities so all units must be occupied by 62 or older or at least 80 of the units are occupied 50 by 55 or older those housings they're they're exempt right because you got to have a minimum age to live there so they're exempt from the familial status also housing oper by religious organizations and private clubs are that are not operated for commercial purposes they can they can have certain nationalities certain things they are exempt from from the law okay now the prohibited activities we talked a little bit about this when we did the review the practice test steering steering is channeling homes Seekers to or away from neighborhoods for any reason blockbusting is use entry or rumor of Entry of a protected class to urge owners to sell redlining is the denying loans or insurance coverage or different terms and prices for the same coverage and conditions for homes in certain neighborhoods so you can't charge different rates or things like that go ahead um could you please explain this one a little more please which one the one that I put the era on the housing yeah yeah thank okay yeah so that okay so let's say a church buys housing for their elderly and they want the housing for the elderly for their church members only so they can rent them to church members only they don't have to follow these laws they can rent as long as the church isn't discriminating right got it okay and then a private club is like a you know Social Club private like membership club right it's not commercial they're usually e ethnic clubs you know you have different ethnic ethnic clubs they buy property they want to rent to their members they're allowed to rent to their members and not outside of their Community gotcha that's exempt okay all right that make sense yeah you good on the redlining blockbusting and steering oh yeah definitely all right so let's look at you have to describe the objectives and major provisions with the Americans in Disability Act it protects employment and accessibility rights of individuals with mental and physical disabilities people with disabilities cannot be denied access to public transportation public accommodations and commercial facilities it includes real estate brokerages offices even if located in private residences modifications may be required if readily achievable okay the Florida Americans with disability implementation Act is the state state law right there's a federal law as well okay any questions no that you know remember I used the example remember the back of our building has the ramp and I have the handicap bathroom in the um classroom behind me here I was look when I when I look for offices I made sure that was already done because I don't want to have to put the expenses of putting bathrooms and you know that can that can add up to like 20 grand real quick bathrooms and ramps and things so I made sure I found a building that was already in accordance with that and the building I have here was an insurance company for like seven or 10 years prior so it was already retrofitted it was already done to ma to match all the federal and state laws cool okay so next you have to describe the majority Pro I'm sorry describe the major provisions of the interstate land sales full disclosure act okay this is a federal law that regulates sale or lease of land it's administered by the cfpb the Consumer Financial Protection Bureau certain developers must register developments and disclose the prospects facts regarding the real estate and there's two components okay there's a registration requirement and a property report the registration requirement is if developers register a subdivision of 100 or more Lots with the Consumer Financial Protection Bureau so if it's 100 more Lots they must register it if the developers of 24 or more Lots they must provide purchaser with the property report disclosure before signing the contract and they may cancel within seven days at the review buyers who do not receive the report prior to signing contract May cancel within two years and get their money back they cancel the contract they have a right to okay now let's look at the provisions of the Florida real estate Landlord and Tenant Act okay this is something you want to look at now right because something we talked about prior right yes so this places the landlord's inant on Equitable legal basis you know I just saw there was a Aiden just saw in the news there's a a rental complex that stopped uh trash pickup and they didn't hire a new trash company and the people are putting their trash outside and there's no no no dumps there's no nothing and they're suing they're suing them because they have to provide trash and they're suing the the the bill the people right it's going on right now just saw it last night um so it applies to a rental of dwelling units okay not transient facilities not Airbnb not hotels not Mobile H Lots not commercial leases landlords must account for deposits and advanced rents they must hold the money in a separate non- interest bearing Florida account bank account they must hold or hold the money in a separate interest bearing Florida account account and pay the tenant at least 75% of the annual interest or 5% simple interest or they must post a bond for the amount of the security deposits in advanced rents or 50,000 whichever is less and pay the tenants five years 5% per uh year in simple interest okay remember this was on the the practice exam landlords of five or more units must provide legal notice to tenants when when with in 30 days of collecting a deposit the name address of depository where the advanced rent security deposits are held and they must indicate whether the tenant is entitled to interest on a deposit or not okay let's talk about broker management Property Management if the broker holds the funds on behalf of the landlord the broker must abide by chapter 475 regarding escro funds deposits and advanced rents are trust funds that must be deposited it into the broker's escrow separate escrow account for property management is not required you don't have to have separate accounts you can have one account and everything can be in it it'd be a nightmare but it all be in it remember $5,000 Brokers funds must are are allowed to be maintained in that account how much is it in the sales one do you remember a thousand thousand good Associates must deliver the rent and deposits to the broker by end of next business day that's the same as a purchase right end end next business day yeah okay renting to active military service the must approve or deny rental applications within seven days if the service meas has completed an application and landlord must rent to the member if they don't they have to have a reason for denial okay let's talk about the sale of tenant occupied homes unless unless specifically stated in the lease agreement the sales of rented property does not terminate the lease if a lease continues after the sale security deposits and advanced rents must be transferred to the new owner and it requires a final accounting to the tenant at the time of transfer remember remember the probations we did remember the rent probations you know goes to dat closing that's that's talking about that right yeah okay now obligations to maintain the premises the landlord must must meet health and building codes insect and Road extermination garbage receptacles and pickup working equipment for heat and running water if those things aren't being provided for they're in violation a tenant must comply with the health and building coats use reasonable care of operation and cleaniness of equipment and not disturb the Peace of others landlord's access to the premises a tenant must allow a landlord to enter the property to make inspections provide service make repairs and show property landlord may enter the property at any time in case of emergency otherwise they're obl to give reasonable notice reasonable notice to law is 12 hours okay vacating the premises when a landlord is holding a security deposit they must return it to the tenant within 15 days if no claim is to be made they have to send written notice by certified mail within 30 days if a claim is made on the security deposit at that point the tenant has 15 days to respond to the landlord's written claim if they dispute it and want and have issue that they don't agree with they have to handle in Civil Court they have to file a case there's no um conflicting demand rules nothing like that like on a sale okay and let's look at how uh rental agreements can be terminated okay now this is something that you want to look at for what we were talking about If a landlord fails to maintain rented premises or fails to comply with rental agreement the tenant May terminate the agreement they have to give 7-Day written notice of intent to cancel the landlord has seven days to correct the non-compliance if the tenant decides desires to remain on the premises rent may be reduced by the court if uninhabitable tenant may be relieved of the rent payments until it's fixed termination of rental agreement by the landlord because a landlord could terminate it too if a tenant fails to pay rent there's a three-step procedure they give the tenant written notice demanding either rent payment or possession within three days the tenant has three business days to pay the rent or Surrender the premises if they fail to do so the landlord must initiate formal eviction in the county court if the tenant vacates the landlord must give tenant written notice of any claim on security deposit or Advanced rent held by the landlord okay eviction requirements you must notify the tenant with with in writing three days if the tenant does not comply file a complaint of eviction with the county the tenant has five business days to respond to the complaint to the court if the tenant continues to occupy without responding final um judgment is obtained from the court and the court issues a rid of possession the sheriff out notifies the tenant of eviction and an eviction will take place in 24 hours after it's posted okay and that is the end of unit seven do you have any questions on that no questions okay okay we're gonna move on to unit8 now unit8 you're going to have 8% of the questions which will be eight questions on the exam it's going to talk about property rights Estates tencies Condominiums co-ops Community Development districts um homers associations and time sharing okay so what we need to do is we need to be able to Define real property based on the definition of chapter 475 Florida statute and it explains the physical components of real estate of real property okay so real property or real estate means any interest or estate in land and interest in business enterprises or business opportunities it includes minle rights it does not include semetery Lots renting of mobile home lots or Recreation vehicle Lots in a home a mobile home or a park or a travel park okay the physical physical components of land you have surface rights and that includes land and water rights right remember remember the water rights you have loral rights and that's associated with land buing against nonflowing water bodies that's like an ocean or a pond or a lake right or golf golf like on up against the Gulf of Mexico on the west coast okay so think loral think Lakes right reparan rights are associated with land AB buding a flowing Waterway like banks of the river or stream think raran you think River Right Moving the definitions associated with water rights okay so remember you got to remember so you have acation okay that's the process of land buildup from water born Rock sand and soil aluvion happens when acation occurs alvion is the new deposits resulting from the acation erosion is the loss of land due to Natural Forces and reliction is the receding of water uncovering additional land okay subsurface rights are also referred to as mineral rights that's like oil gold silver right in the ground air rights involve the space above so you have to disting also be able to distinguish between real and personal property and explain the four tests that courts use to determine if an item is a fixture okay so you have two basic types of property you have real property which is realy and you have personal property okay so personal property um is going to be fixtures and your clothing and and you know a a ceiling fan when you buy it it's personal property when you install it it's real property right because it's attached a washer and dryer when you buy it is personal property when you connect it it's physical property right it's it's real property okay same thing as stove right same thing okay so personality indicates personal property okay so real property becomes personal property by Act of severance okay so if you put a ceiling fan in it becomes real property you take a ceiling fan out now it's personal property you put a washer and dryer in it's real property you take it out it's physical uh personal property right okay so personal property becomes real property by attachment and it becomes real property becomes personal property by Severance taking it out right fixture okay was originally personal proper now it's permanently attached to made to be made part of the real property ceiling fan washer same concept right so you have four tests what determines this Irma is the Irma is the acronym we use okay the intent of the parties so if a washer and dryer is connected to the house the house is shown the washer and dryer are there nothing is said that the washer and dryer are not included they're going to assume that that's included right however if you put in a listing Arena and on the sales and and on the listing in in the broker's comments washer and dryer not included now that's the intent of the parties right now the seller says we don't want to include it the buyer says well I'll buy it but I want it then they can negotiate it the seller can still say no but if you don't say anything and the seller takes that they stole from the house they took property they're going to be sued right they could be sued okay so intent of the parties relationship or agreement of the parties they decide what they're going to do right they on it it's in the contract method or degree of attachment is it something that can be easily removed or no like if you have a fence a fence is part of when you when you buy the materials for a fence it's personal property when you install the fence it's it's um a real property now is it is it feasible to take a fence out and take it with you when you move I mean that's the method of attachment right the degree of it right so it doesn't make sense right you're not going to take offense okay and then adaption of the item okay is it easily adaptable okay so let's look at the little chart we made so there's fixtures and there's trade fixtures trade fixtures are in commercial property fixtures are on Real Property okay and if you have to determine these a fixture is in real is in real property okay um it's type it's the nature of property is permanent okay and the use of the property is for residential residential sales and purchases and the sales contract it would be included in the sale you would include that right trade fixtures are personal property it's removable the use of it is normally in a commercial lease like you have a restaurant all the equipment inside okay that's the owners right and it's usually not included in the sale unless you include it in the sale right so you know if an owner of a property is selling a building and there's a restaurant in it and the restaurant is leasing that restaurant it's not the owner those that equipment in there is not the building is they're not buying that they're buying the building right that depending on the lease depending on the deal that equipment is is the the restaurant owners right you're not taking their ovens and stoves and things like that box bands dishes like that right does that make sense yes okay okay now let's talk a little bit about describing the bundle of legal rights associated with real property ownership okay second here there we go so let's let's talk about the legal bundle of Rights all right you have deep C is the acronym that we use okay you have disposition which is the right of dispos these are the bundle of Rights whatever you want to do with your property you have enjoyment that's the right to use it quiet enjoyment exclusion right to prevent trespass possession right to occupy it anytime you want and control right to unlawful interrupted use okay you have on that one second here okay good all right now let's list list of principles list the principal type of states of Estates you have tencies are also Estates now you can describe their characteristics and describe the benefits and protections associated with the Florida homestead law okay so there's two group two general groups of Estates and tendencies okay you have one a freehold estate and that's for indefinite length unknown duration right you own it you bought it do what you want with it sell it whenever you like okay ownership interest for an indefinite period which is the unknown duration right you just sell it whenever you want there's two types of freeold Estates you have fee simple okay this one has the largest bundle of Rights and it can be inherited and passed on okay it's the most comprehensive ownership there's absolute and complete ownership as I said it can be inherited from somebody and it can be passed on to your heirs okay it's also known as fee or fee simple absolute and you have the power to use it dispose it and descend it to your airs life estate is measured by a person's lifespan okay this is created by a person who holds a fee simple title to the real property the Freehold estate limit is limited in duration to the owner's lifespan and or designated lifespans of the persons okay conventional life Estates are created by an agreement of the parties and the grantor transfers life estate to another the life life estate creates two distinct ownership interests from the original fee simple estate okay the possible persons who hold title once the life estate ends are there's two possibilities it could be an estate in reversion means it reverts back to the original granter and it can also be a remainder estate that means the property goes to a remainder man so in the in the deed it's going to say who gets the property afterwards it goes to somebody or something or it goes back to the person or the trust or whoever gave it okay life Estates can also be created by law so for example if a homestead is titled in one spouse's name only by operation of law the surviving spouse receives a legal life estate to the Homestead Property for this reason signatures of both spouses are required on all contracts mortgages and deeds on homesteaded property if it's in one person's or both name names have to be on both right and signed okay a homestead is the right you have the right to Homestead your your the owner's p uh permanent principal residents and there's protections and benefits when you're homesteaded okay the protection of the family the legal life estate okay protection of the homestead from for sale if you get sued not from foreclosure if you don't pay your mortgage they're going to take your house right but it's not not from getting sued okay tax exemption is up to 50,000 right plus you have those additional exemptions for different cases the size restriction of protected homesteads is 160 Acres outside the city or half an acre within the city and that's determined by the zoning and the planning where where it is okay and there's also personal property protection of ,000 dollar in value okay that's that's the freeold now you have the second one which is leasehold right so leasehold is also known as non Freehold and what it means is there's a fixed known duration you have a one-year lease a five-year lease a 10year lease right it's measured in calendar time and you have that known duration it's non-freehold because it does it does not exist for an infinite period of time okay the non-free hold or less than free hold is ter is is called it's not an ownership interest basically what they're doing is transferring the right of enjoyment which is the use in possession for a period of time the owner still owns it the tenant becomes the leasehold for the period of time right so you have three types of non-freehold leas hold Estates right number one is an estate for years it's also known as tency for years there's a specific starting and ending date which is called a designated period there's no notice to terminate because it's already you know when the ending date is they don't have to give you notice you know it's it's ending on a certain date it's created by a written lease agreement and it establishes the tenant's interest in the property but it does not convey legal title right you're not selling the property you're giving the interest you're giving the quiet enjoyment and the use right pendency it will either an oral agreement or an agreement with a beginning date but no fixed termination date okay it's a Tennessee without specific term and the notice to terminate is set in statute so if you're if you're renting a place week to week you got to give seven days notice if you're renting a place month to month you got to give 15 days notice okay that's like a month-to month a tendency it will you're moving in this day we don't know when you're moving out then you have something called a tency at sufferance okay this is when you have a tency for years and the Tenant stays in possession of the property beyond the ending date without the landlord's consent or written agreement basically like a tenant hold over okay you know some people say he look I'm giving you a year lease and then when it expires you go month to month right that would technically be a tendency in sufferance okay A a tenant stays in possession of the property beyond the ending date be without the consent it's a tenant hold over now if if with written consent the landlord then it becomes a teny at will right so if the landlord says okay I'll put it on paper you can now rent month to month just give me 15 days notice when you leave right it would go to tendency at will but if they never give you a new lease and you just live off that old lease it's going to be a tendency of sufferance okay now let's look at the difference between soul and current ownership so Soul ownership is when one person owns a property and then concurrent is when there's two or more right so when one person owns a property it's called a state and severity title is held in one person's name and that's sole ownership okay separate property titled to one spouse either before marriage or or by inheritance okay would be this type of property like if you if you have a marital asset AC acquired during marriage it could still be one person but then the other person if you're homesteaded has interest in it right now let's look at conc concurrent ownership okay two or more persons own property at the same time there's three types of concurrent ownership okay you have tendency in common concurrent ownership of two or more people they acquir the title at the same or different times so they can people can be added and taken off of it as time goes on okay undivided interest in the entire property so one person has undivided interest they can come and go as they please and so does everybody else no one can tell somebody they can't come to the property okay equal or unequal shares it could be equally divided or one can own more than the other okay so it's called proportionate share and heirs inherit it there's no right of survivorship so if one dies it doesn't go to the other people it goes to whoever they name in their will and they can also sell it to somebody else they don't need the other people's permission to sell their share okay then you have tendency by the entireties concurrent ownership created by a married couple only you have to be married to get this you must be married at the time when you take title you can't buy the house two weeks before you get married you got to be physically married to get title this way okay so tendency of the entireties is implied if a couple is married so if somebody's married and they're getting a house this is going to be the deed this is going to be the ownership type that they get automatically unless you tell them they want it differently right it applies to all types of real estate purchased by married couples could be residential could be commercial could be land could be everything okay actions affecting property require consent of both spouses so you know if it wants to both people have to sign all the all the documents right agreements contracts closing deed when one spouse dies ownership interest transfers to the surviving spouse by right of survivorship in event of divorce Tendencies by entireties becomes tency in common okay automatically reverse the tendency in common joint tency has the right of survivorship the death of a co-owner T co-owner title interest conveys to the surviving co-owners four people one passes it goes to three three goes to two two goes to one right when a spouse dies the ownership transfers to the surviving spouses by right of survivorship in event of divorce tendency tendency by entireties I'm sorry I went off the wrong thing one second I went back to the wrong one so WR a survivorship the death of the co-owner title interest conveys to surviving co-owners title does not convey to the SS okay specific wording in the deed must provide for survivorship so after the last person dies it has to be in the deed where it's going predetermined okay there's four unities to Joint tency okay you have possession it's undivided interest right people can come and go whenever they want you can't tell somebody to have to leave interest is equal ownership there's no person that owns more than the other it's always equal the title is acquired on the same deed So when you buy it they're the people on it you can't add people on and off time acquire interest at the the same time now you could always refinance it do D transfers things like that but you can't it would have to change status right it has to be acquired at the same time as the purchase okay any questions on that no all right so now let's distinguish among cooperatives Condominiums and time shares and describe the main documents associated with with the miniums okay so remember cooperatives Florida statute 719 is dedicated to them they're multif family buildings owned by a corporation unit owners purchase shares of stock for each unit stock ownership entitles the purchaser through a proprietary lease to and write to occupy property taxes are assessed on each unit the owners can deduct the real estate taxes and purchase interest shareholders will pay a pro-rated share of property taxes and a corporation pays the tax Bill The Coop The Cooperative disclosure and cancellations okay so when you go into contract with the developer there's a disclosure the buyer has the right to cancel within 15 days of signing the contract and receipt of the cooperating documents Cooperative documents right so if you sign the contract but don't get the documents for 10 more days that clock doesn't start till you get the documents right so new new construction from a developer of 15 days in a resale contract you got to get the documents and you have three days right before signing or the buyer has the right to cancel three days of signing the contract and the receipt of the documents so whenever you get both of those your three-day period starts all right 15 days developer three days resale Condominiums Florida statue 718 okay it consists of condo units and condo El common elements okay okay you own a condo unit in fee simple plus an undivided fractional shares of the common elements the deed conveys ownership common elements legally attached to each unit and transfer with the unit that's like the pool the gym you know all the equipment like any anything that's coming with the unit when you sell the unit it goes with it property taxes are L levied on individual units okay condominium doc documents documents that must be given to BU of a new residential condo unit sold by developer and resale purchases okay the Declaration of condominium that's the that's the document that is creating the doc the condo by recording that declaration right constructive notice they have an Articles of Incorporation for the association they have bylaws which are operational requirements rules and regulations they have a frequently a um asked question sheet this is information regarding leasing the units assessments all the the normal questions purchaser has three calendar days to cancel the contract after signing the contract and the clock does not begin until the buyer receives all the required doc condo docks okay so remember resale three days developer 15 days right condos and and and um co-ops now condo sold by the developer in addition to the four documents we just talk talked about they also if it's 20 or more units if it's I'm sorry more than 20 units they have to give a perspectus if it's estimated operating budget they got to give that too because they don't know what the budget is until they start operating but they have to give you an estimated budget and the purchaser has 15 calendar days to cancel after signing the contract and the clock doesn't begin until after they receive all the condo docks and sign off on that okay so remember three days resale 15 days developer okay so resale condo units by the owners also have a few different disclosures they get the four primary ones and they got the three business days to cancel after they get the rest of them okay now time shares they have their own Florida statute 721 okay units are divided into into time segments of ownership usually 52 weeks the Deeds or other ownership evidences are prepared for each ownership segment so you have 20 or 52 Deeds right real estate license is required to sell another's time share for compensation the exemptions are if it's a salaried employee of the time share developer selling time shares for the developer provided they're not paid commission and not paid on a transactional basis owners of time shares can sell their own time shares without representation time share resale listing agreements it's illegal to collect Advanced fees for listing a time share your required disclosure not guaranteeing a sale other requirements are what the commissions are the terms the broker Services termination and listing extension rights and if there's any judgments or litigation against the broker sale contract disclosures for time shares a time share sales contract must contain the current year's time share assessment if the property taxes are not included in the assessment the most recent property tax assessment is also required there has to be a form of time share ownership is it fee simple how are they owning it who the managing entity is terms for closing and uh terms for the closing and the cost of it and if there's an existence of a mandatory Exchange program okay right of cancellation a time share is different than the others the buyer has the right to cancel within 10 days of signing a time share sale contract or receipt of public offering statement whichever occurs later that 10day period is for new time shares from a developer and also resale time shares okay so on this one is 10 days either way time share ownership interval uh time ship ownership okay there's two different types of ownership you have inter ownership which is fee simple ownership the fractional interest is divided by deed that means you buy it and you own it forever and you decide when you're going to sell it right to use time share ownership is usage of time share but it's limited the number of years and the ownership of time share remains with the developer so that kind that kind say you buy it you have access to it for 50 years after 50 years it goes back to the developer okay that's the right to use okay and remember the days three business days for resales of co-ops and condos 10 calendar days for time shares for developer and resale 15 days for residential Co-op and condo units by the developer okay do you have any questions on that no questions all right so what we're going to do is let's end part one and we'll continue part two on our next session where we begin with unit n and go to the end of the review okay do you have any questions on that I do not have any questions though good okay good so we'll end this and we'll we'll get this completed