Florida Real Estate Broker Examination flashcards

A real estate broker must never obey an unlawful instruction from a principal, even if it is a direct order. This includes instructions that violate Fair Housing laws.

• Broker's duty to law supersedes duty to principal.
• Discriminatory instructions are unlawful.
• Broker must refuse and educate client.
• Obeying unlawful instructions leads to broker liability.

Memory trick: Law over Loyalty: The law's the boss, even over the client's demands.

Real estate brokers are prohibited from providing specific financial advice, such as recommending loan structures or lenders. They must advise clients to consult with licensed financial professionals.

• Cannot provide specific financial advice.
• Cannot recommend specific loan products/lenders.
• Role is transaction facilitation, not financial counsel.
• Must refer clients to qualified professionals.

Memory trick: Brokers facilitate the deal, not the financial details.

A contract provision that makes timely performance a material term, meaning failure to perform by the specified date constitutes a breach.

• Must be explicitly stated in the contract.
• Without it, dates are generally flexible 'target' dates.
• Failure to meet a 'time is of the essence' deadline is a material breach.
• Often used in real estate contracts for firm deadlines.

Memory trick: No 'time is of the essence,' no immediate offense.

A Leasehold Estate (or non-freehold estate) is a tenant's right to possess and use real property for a limited period under a lease agreement, without holding title to the property itself.

• Right to possession, not ownership.
• For a defined period (e.g., years, months).
• Tenant pays rent.

Memory trick: Estates are how long you can hold land: forever, for a life, or just for a lease.

If a lease is silent on subleasing, it typically implies the tenant may sublease. However, a property manager must consult the owner for approval and potential lease amendment before granting permission.

• Silence generally implies permission.
• Property manager must consult owner.
• Owner has final decision-making power.
• Lease amendment may be advisable.

Memory trick: Silent lease doesn't mean free reign; the owner's voice must still be heard.

Determines which party (buyer or seller) bears the financial responsibility for damage or destruction of property between contract signing and closing.

• Often addressed by contract clauses.
• Florida generally follows the Uniform Vendor and Purchaser Risk Act (UVPRA).
• If substantial destruction occurs before closing, seller typically bears the loss.
• Buyer usually entitled to deposit return if seller bears loss.

Memory trick: If the house is gone, the deposit goes home.

If a sole proprietor broker is unable to perform their duties, especially for an extended period, the brokerage cannot legally operate and must be closed.

• Brokerage is personal to the sole proprietor.
• No delegation of broker-level responsibilities.
• Extended absence requires closure of the business.

Memory trick: The solo pilot needs to land the plane if they can't fly it themselves.

The legal process a landlord must use in Florida to remove a tenant who has breached the lease and failed to vacate after proper notice.

• Mandatory legal process for tenant removal.
• Cannot use self-help methods (e.g., changing locks).
• Requires proper notice to tenant (e.g., 3-day, 7-day).
• Filed in county court.

Memory trick: Notice first, then court, to get them out the door.

A Florida single agent has a fiduciary duty to keep confidential any information learned from or about the principal that could harm the principal's negotiating position, unless disclosure is authorized by the principal or required by law.

• Duty of loyalty to the principal.
• Protect confidential information.
• Only disclose with principal's consent or legal mandate.

Memory trick: Single agents are loyal protectors of secrets, always looking out for their client's best interest.

All real estate advertisements in Florida must clearly and conspicuously include the licensed name of the brokerage firm to avoid blind advertising and ensure transparency.

• Brokerage name must be visible and prominent.
• Applies to all forms of advertising.
• Prevents blind advertising.

Memory trick: Advertise right, make the brokerage name bright!

'Fructus naturales' are plants that grow naturally and are considered real property. 'Fructus industriales' (emblements) are annual crops cultivated by human labor and considered personal property.

• Fruit trees are fructus naturales (real property).
• Annual crops (corn, wheat) are fructus industriales (personal property).
• Personal property can be removed; real property conveys with the land unless specified.

Memory trick: Natural 'Trees' stay; 'Industrial' 'Crops' go.

Florida law permits a broker to place a limited amount of personal funds (up to $1,000 for sales escrow, $5,000 for property management escrow) into a trust account to cover bank service charges and maintain the account, which is an exception to commingling.

• Exception to commingling rule.
• Max $1,000 for sales escrow.
• Max $5,000 for property management escrow.
• Sole purpose: cover bank charges/maintain account.

Memory trick: Small 'buffer' cash is okay, but don't 'mix' big bucks.

If a landlord (or their broker) does not intend to make a claim on a security deposit, the full amount must be returned to the tenant within 15 days of the tenant vacating the premises, according to Florida Statute 83.49.

• No claim on deposit.
• Full amount returned.
• Within 15 days.
• From tenant vacating date.

Memory trick: No claim, no fuss, 15 days and it's back to us.

A commercial lease agreement where the tenant pays a base rent amount plus a portion or all of the property's operating expenses, such as real estate taxes, insurance, and common area maintenance (CAM).

• Tenant pays base rent + expenses.
• Expenses often include taxes, insurance, CAM.
• Common in commercial real estate.

Memory trick: Net leases make the tenant 'net' the expenses, not just the rent.

The division of property tax expenses between the buyer and seller at closing, ensuring each party pays for the period of the year they own the property.

• Taxes are typically paid in arrears (after the period they cover).
• Calculated based on the closing date.
• Buyer usually pays for the portion of the year they own the property; seller pays for their portion.

Memory trick: Prorations 'split the bill' based on ownership 'days'.

A policy that protects property owners and lenders against financial loss due to defects in title that existed at the time the policy was issued.

• Covers defects that were unknown at closing.
• Protects against recorded and some unrecorded liens (e.g., mechanics' liens).
• Does not cover defects that arise after the policy date.
• Owner's policy protects the buyer; lender's policy protects the lender.

Memory trick: Title insurance protects you from hidden past liens, even if unseen.

In Florida, a temporary shelter used by a real estate broker for the convenient transaction of business, such as for a specific subdivision, is generally exempt from branch office registration requirements if it is not intended to be permanent.

• Temporary shelters may be exempt.
• Must be for specific, limited purpose.
• Not intended as permanent office.

Memory trick: Main office is a must, branches need a stamp, but temporary tents can sometimes skip the line.

A provision in a contract that makes the contract's validity or a party's obligation dependent on the occurrence or non-occurrence of a specified event or condition.

• Protects a party from unforeseen circumstances.
• Must be clearly stated in the contract.
• Failure to meet a contingency can allow contract termination without penalty.

Memory trick: Clauses are 'pieces' of the contract puzzle.

In Florida, a single agent represents either the buyer or the seller, operating under common law fiduciary duties including loyalty, obedience, full disclosure, confidentiality, and accounting.

• Highest level of representation.
• Must deal honestly and fairly.
• Requires written disclosure and consent.

Memory trick: Remember 'OLD CAR': Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care.

Price-fixing is an illegal agreement among competitors to set prices at a certain level, or to establish minimum or maximum prices. It is a per se violation of antitrust laws.

• Agreement among competitors.
• Sets prices, or minimum/maximum prices.
• Per se illegal under antitrust laws.
• Discourages competition.

Memory trick: Fix the price, face the law's bite.

For federal income tax purposes, real estate sales associates are often classified as independent contractors if they are paid solely by commission, have a written independent contractor agreement, and control their own work methods and hours.

• Paid solely by commission.
• Written independent contractor agreement.
• Control over work hours and methods.
• Broker does not treat as employee for federal tax purposes.

Memory trick: Commission-only, contract-bound, and hours unbound, means independent contractor all around.

A real estate sales associate or broker associate must deliver any earnest money deposit received to their employing broker by the end of the next business day.

• Applies to sales associates and broker associates.
• Deadline is end of next business day.
• Funds must be delivered to employing broker.
• Broker then has additional time to deposit into escrow.

Memory trick: Associate's hand to broker's hand, one day's command.

Discriminatory advertising and steering, including using demographic targeting based on protected characteristics, are prohibited under fair housing laws. Advertisements should be inclusive and reach a broad audience without bias.

• FHA prohibits discrimination in housing advertising.
• Steering (guiding based on protected class) is illegal.
• Demographic targeting by race/ethnicity is a form of steering.
• Ads should be inclusive and broad.

Memory trick: Don't target by race or creed, sow equality instead.

Florida homestead property cannot be devised by will if the owner is survived by a spouse or a minor child, instead descending by law.

• Applies if owner is survived by spouse OR minor child.
• Will provision attempting to devise homestead is ineffective.
• Property descends by law: life estate to spouse, remainder to lineal descendants.
• Protects family from disinheritance or creditors.

Memory trick: Spouse and child always come first, even over the will's burst.

A clause in a purchase contract that makes the agreement contingent upon the buyer obtaining a specified loan within a certain timeframe.

• Protects the buyer from losing earnest money if financing fails.
• Requires buyer's good-faith effort to obtain financing.
• If not met, buyer can usually terminate and get deposit back.
• Must specify loan terms and deadline.

Memory trick: If the loan doesn't click, the deal won't stick.

The foundational legal document creating a condominium, outlining the rights and obligations of unit owners and the association.

• Must be recorded in public records.
• Establishes covenants that 'run with the land'.
• Binds all present and future unit owners.
• Includes details on common elements, unit boundaries, association powers, etc.

Memory trick: Declaration's rules are like concrete, binding for all to see.

A permit required in Florida for activities that affect wetlands, surface waters, or stormwater management, issued by FDEP or Water Management Districts.

• Regulates dredging, filling, and construction in or near wetlands/water bodies.
• Ensures environmental protection and water quality.
• Issued by FDEP or one of Florida's five Water Management Districts.
• A critical component of environmental land use regulations.

Memory trick: Wetlands need an ERP to prevent a watery ERP-osion.

In Florida, an Easement by Prescription is acquired through open, continuous, adverse, and uninterrupted use of another's property for a statutory period of 20 years, without the owner's permission.

• 20-year statutory period in Florida.
• Use must be open, notorious, continuous, and adverse.
• No permission from the owner.

Memory trick: Easements are rights to use someone else's land, sometimes by agreement, sometimes by just taking it for a long time.

In Florida, sellers of property subject to a homeowners' association must provide prospective buyers with specific HOA governing documents and a disclosure summary, granting the buyer a right to cancel the contract if not received.

• Applies to properties governed by F.S. 720 (HOAs), not F.S. 718 (condominiums).
• Seller must provide declaration, articles, bylaws, rules, and a disclosure summary.
• Buyer has a right to void the contract if disclosures are not timely received.

Memory trick: HOA: Home Owners Always Disclose Accurately

When a real estate contract contains a contingency (e.g., financing) that is not met by the deadline, and no specific remedy is stated, the contract often becomes voidable, leading to rescission, where both parties are released.

• Contingencies are conditions that must be met.
• Failure to meet a contingency can terminate the contract.
• Rescission returns parties to original positions.

Memory trick: When a contract breaks, the law offers solutions to fix or end it.

A contract provision that pre-determines the amount of damages for a breach, often stating it is the 'sole remedy', thereby limiting other claims.

• Amount must be a reasonable estimate of actual damages.
• Often used with earnest money deposits in real estate.
• If 'sole remedy', prevents further claims for actual damages.
• Enforceable if not a penalty and damages are difficult to ascertain.

Memory trick: Sole remedy means only one prize, no more surprises.

Misrepresentation in advertising involves making unsubstantiated factual claims that a reasonable person might rely on as true. Puffery, conversely, involves exaggerated statements of opinion that are not meant to be taken as fact.

• Misrepresentation: False statement of material fact.
• Puffery: Exaggerated opinion, not factual claim.
• Licensees must avoid misrepresentation.
• 'Below market value' implies verifiable fact, not opinion.

Memory trick: Facts you verify, opinions you glorify; don't mix them up or you'll be sorry.

Puffery refers to exaggerated or superlative statements about a property that are subjective opinions rather than factual claims. It is generally permissible in advertising as it's not considered misrepresentation.

• Subjective, not factual.
• Exaggerated or superlative.
• Not considered misrepresentation.
• Permissible if a reasonable person wouldn't rely on it as fact.

Memory trick: Puffery is 'fluffery' – it sounds great but isn't a hard fact.

Federal law requiring landlords to disclose known lead-based paint hazards and provide an EPA-approved pamphlet for residential properties built before 1978.

• Applies to residential properties built before 1978.
• Landlords must disclose known hazards and provide a pamphlet.
• Tenants have a 10-day period to conduct an inspection.

Memory trick: Lead paint's old, so tell the story bold.

Florida Statute 83.51 requires landlords to maintain the premises, including structural components, plumbing, and heating, in good repair and habitable condition.

• Applies to residential properties.
• Landlord must comply with health and safety codes.
• Tenant must give written notice of noncompliance before taking action.

Memory trick: Habitable home, the landlord's call, or face a legal fall.

The process of identifying, assessing, and controlling threats to a property's assets, income, and occupants, with a focus on minimizing financial losses and legal liabilities.

• Prioritizes safety and compliance.
• Includes physical hazards, financial risks, and legal exposures.
• Aims to prevent accidents and protect property value.

Memory trick: Safety first, then finances, then aesthetics.

A financial plan that outlines the anticipated costs for major improvements, renovations, or replacements of long-term assets for a property.

• Covers items with a useful life exceeding one year (e.g., roof, HVAC).
• Distinct from the operating budget for daily expenses.
• Aims to preserve or increase the property's value.

Memory trick: Operating for daily, Capital for big projects.

A detailed financial plan that projects the property's income and expenses over a short period, typically one year, to manage day-to-day operations and cash flow.

• Focuses on short-term (annual) financial performance.
• Includes all revenues (rent, fees) and ongoing expenses (utilities, repairs).
• Crucial for monitoring and maximizing immediate cash flow.

Memory trick: Operating today, for cash flow to play, capital tomorrow, no sorrow.

A lease agreement where the rent is based on a percentage of the tenant's gross sales, often with a minimum base rent.

• Common in retail properties.
• Rent fluctuates with tenant's business performance.
• Often includes a 'breakpoint' or minimum base rent.

Memory trick: Percentages of sales, but always cover your base!

The professional oversight and administration of a condominium association, including enforcing rules, managing finances, and coordinating maintenance.

• Property manager acts as an agent for the association board.
• Enforces CC&Rs (Covenants, Conditions, and Restrictions) and bylaws.
• Focuses on maintaining common areas and community standards.

Memory trick: Rules are law, enforce them all.

Florida Statute 83.49 outlines the procedures landlords must follow regarding security deposits for residential tenancies.

• Landlord must return deposit within 15 days if no claim.
• Landlord must send written notice of claim within 30 days if making a claim.
• Tenant has 15 days to object to a claim after receiving notice.

Memory trick: Thirty days to claim, fifteen days to object, fifteen days to return.

The legal procedure a landlord must follow in Florida to remove a tenant for violating non-monetary terms of the lease agreement.

• Requires a 7-day notice to cure or vacate.
• Tenant must be given opportunity to fix the violation.
• Self-help evictions (e.g., changing locks) are illegal.

Memory trick: Notice then court, never self-help.

Property managers must consistently enforce lease clauses, such as late fees, to maintain financial stability and tenant accountability.

• Lease terms are legally binding for both parties.
• Inconsistent enforcement can weaken future claims.
• Documentation of violations and actions is crucial.

Memory trick: When rent is late, don't hesitate, communicate and regulate.

A commercial lease agreement where the tenant pays a fixed base rent plus all operating expenses of the property, including property taxes, building insurance, and common area maintenance (CAM).

• Tenant pays base rent + taxes (N1), insurance (N2), and CAM (N3).
• Common in commercial and industrial properties.
• Shifts most property operating expenses to the tenant.

Memory trick: Net, Net, Net, the tenant's debt, for taxes, insurance, and CAM, you bet!

A type of commercial lease where the tenant pays a fixed rent, and the landlord is responsible for most or all of the property's operating expenses.

• Tenant's expenses are predictable.
• Landlord assumes more risk for fluctuating operating costs.
• Common in multi-tenant office buildings.

Memory trick: Gross is simple, Net adds expense, Percent shares sales.

A pre-defined strategy for effectively disseminating critical information to tenants, staff, and emergency services before, during, and after an emergency event.

• Crucial for tenant safety and minimizing property damage.
• Should include multiple communication channels.
• Must be clear, concise, and timely.

Memory trick: Communicate fast, for safety to last, when hurricane winds begin to blast.

Tailoring marketing strategies and channels to effectively reach a specific demographic of prospective tenants for a rental property.

• Understanding the target audience is crucial.
• Utilizes appropriate platforms and content formats.
• Maximizes advertising budget and minimizes vacancy periods.

Memory trick: Know your tenant, go where they scroll.

A method used by property managers to estimate the optimal rental value of a property by comparing it to similar recently rented properties in the same market, adjusting for differences in features and amenities.

• Compares subject property to 'comps'.
• Adjusts for differences in features (e.g., renovations, amenities).
• Aims to find the highest achievable rent while minimizing vacancy.

Memory trick: Compare the features, adjust the price, for the perfect rent, be precise!

Regular, ongoing tasks performed to keep a property in good condition, address minor issues, and ensure tenant satisfaction.

• Includes tasks like cleaning, minor repairs, and landscaping.
• Aims to maintain appearance and functionality.
• Often scheduled or performed as needed for small issues.

Memory trick: Prevent before, Routine for daily, Correct after, Deferred is delay.

An insurance policy that provides coverage for a tenant's personal belongings and liability within a rented property.

• Covers personal property against perils like fire, theft, and water damage.
• Includes liability coverage for accidents in the rented unit.
• Separate from the landlord's property insurance, which covers the structure.

Memory trick: Landlord fixes the house, tenant insures their stuff.

In Florida, landlords or their agents must notify a former tenant in writing within 30 days of their intent to claim any portion of the security deposit.

• Applies to residential rental properties.
• Notification must be in writing.
• Failure to send notice within 30 days forfeits the landlord's right to claim the deposit.

Memory trick: Claiming a deposit? Send notice within Thirty, or it's gone quickly!

The process of establishing a competitive and profitable rental price for commercial properties, primarily driven by market conditions and property attributes.

• Market analysis is crucial for commercial rental rates.
• Amenities, location, and property type significantly influence pricing.
• Property managers aim for a balance between maximizing income and attracting tenants.

Memory trick: Commercial rates are like a market dance, balancing desire with what others advance.

A listing agreement where the seller grants exclusive rights to a broker to sell their property, but retains the right to sell it themselves without paying a commission.

• Broker earns commission if *any* broker sells the property.
• Seller does *not* owe commission if they sell the property themselves.
• Provides some exclusivity to the broker while offering seller flexibility.

Memory trick: Every Listing Offers an Exclusive Net deal.

In Florida, a real estate brokerage corporation must have at least one officer who is an actively licensed real estate broker to serve as the qualifying broker.

• Corporation itself must be registered as a brokerage.
• All real estate services must be performed under the direction of the qualifying broker.
• Unlicensed individuals can be shareholders, but not officers performing brokerage services.

Memory trick: For a Broker Corp, one Officer must be the Key Broker, guiding the service flow.

A clause allowing contract termination if a buyer fails to secure specified financing by a set deadline; if unmet, the non-breaching party can typically terminate.

• Protects the buyer from losing earnest money if financing falls through.
• Includes a specific deadline for loan approval.
• If the deadline passes without financing, the contract may become voidable by the seller.

Memory trick: Contingencies are like a timed 'if-then' statement in a contract.

In Florida, real estate licensees must disclose all known material facts that significantly affect the value or desirability of any property, including commercial, to prospective buyers.

• Applies to both residential and commercial properties.
• Disclosure must occur even if not explicitly asked.
• Failure to disclose can lead to legal liability and license discipline.

Memory trick: Material facts are like a loud, unavoidable warning sign.

In Florida, all real estate advertisements must clearly and conspicuously display the licensed name of the brokerage firm.

• Applies to all types of advertisements (print, digital, social media, etc.).
• Ensures consumers know which brokerage is responsible.
• Prevents 'blind ads' where the brokerage is not identified.

Memory trick: Always Clearly Show Your Brokerage Name, so everyone knows who's in the game!

Florida brokers must deposit earnest money into a separate, federally insured trust account by the end of the third business day following receipt.

• Funds must be kept separate from personal or operating accounts.
• Prohibits commingling and conversion.
• Timely deposit is crucial to avoid violations.

Memory trick: Trust funds are not your funds; keep them separate and sacred, like a secret garden.

Funds a seller agrees to pay towards a buyer's closing costs, often expressed as a percentage of the sales price.

• Reduces buyer's out-of-pocket expenses.
• Negotiated during the purchase agreement.
• Commonly used to incentivize buyers or cover specific costs.

Memory trick: Seller's share is a slice of the sales pie.