New York Real Estate Salesperson Examination flashcards

A fundamental fiduciary duty of a real estate licensee to their client, requiring that all offers, written or verbal, be promptly and accurately presented, unless otherwise instructed by the client.

• Applies to all offers, regardless of terms or form.
• Must be presented promptly.
• Only the client can waive this duty.

Memory trick: Loyal, confidential, honest, and all offers shown, always.

The process of determining the required selling price per lot in a subdivision to cover all costs (acquisition, development) and achieve a desired profit margin.

• Includes land acquisition cost and all development expenses.
• Profit is typically calculated on the total project cost.
• The selling price per unit must cover a pro-rata share of total costs plus profit.

Memory trick: Total costs first, then add profit's thirst, divide by lots, best price burst.

The process of dividing property taxes fairly between the buyer and seller at closing, based on the closing date and who has already paid the taxes for the period.

• Calculated on a daily basis.
• Uses either a statutory year (360 days) or actual days (365/366).
• Buyer or seller is debited/credited depending on who paid and who is responsible for the period.

Memory trick: Determine daily tax, then count buyer's days, credit the seller's stack.

Fees charged by a lender to cover the administrative costs of processing a loan (origination) and/or to reduce the interest rate over the life of the loan (discount points).

• Both are typically expressed as a percentage of the loan amount.
• Origination fees cover lender's administrative costs.
• Discount points 'buy down' the interest rate.

Memory trick: Combine the percentages, then multiply by the loan, no hesitations.

A state or local tax imposed on the transfer of real property, typically paid by the seller, calculated as a percentage or fixed amount per unit of the property's selling price.

• Also known as a 'deed tax' or 'documentary stamp tax'.
• Calculated on the full consideration (selling price).
• In NY, generally $4.00 per $1,000 of consideration.

Memory trick: Selling price by a grand, then times the rate as planned.

A financial measure that compares a borrower's total monthly debt payments to their gross monthly income, used by lenders to assess loan repayment ability.

• Calculated as (Total Monthly Debts / Gross Monthly Income) * 100%.
• Includes housing expenses (PITI) and other recurring debts.
• Lenders typically have front-end (housing only) and back-end (total debt) DTI limits.

Memory trick: Gross income times DTI limit, then subtract existing debts, a perfect fit.

Under New York's Fair Housing Laws, landlords must permit tenants with disabilities to make reasonable physical modifications to their living space at the tenant's expense, provided the tenant agrees to restore the property.

• Tenant pays for modifications.
• Modifications must be reasonable.
• Tenant may be required to restore property to original condition.

Memory trick: Disabled tenants can 'MOD' their pad, but they 'PAY' and 'RESTORE' it back.

The New York State Human Rights Law prohibits discrimination in housing based on disability, requiring landlords to make reasonable accommodations for service animals, which are not considered pets.

• Protects against disability discrimination.
• Service animals are not pets.
• Reasonable accommodation required.

Memory trick: A service animal is a helping hand, protected by Human Rights across the land.

The ethical obligation of real estate licensees to treat all parties in a transaction fairly and honestly, and to avoid misrepresentation, fraud, or deceit in all professional activities, including advertising.

• Applies to all parties, not just clients.
• Requires truthfulness and accuracy.
• Prohibits misleading statements or omissions.

Memory trick: Honesty and truth, always the proof.

A New York State law requiring sellers of residential real property to complete and provide a Property Condition Disclosure Statement to buyers, revealing known defects, or provide a $500 credit at closing.

• Applies to 1-4 family residential properties.
• Seller's primary responsibility to disclose.
• Licensees must advise clients on compliance.

Memory trick: Seller's secret, broker's advice, disclosure's price.

Structural changes made to a dwelling or common areas by a person with a disability, at their own expense, to afford them full enjoyment of the premises. Landlords must permit these if reasonable.

• Tenant pays for modification.
• Tenant may need to restore property.
• Must be 'reasonable' and 'necessary'.

Memory trick: Modify with care, tenant's fare, landlord's share.

Federal law requiring sellers/landlords of homes built before 1978 to disclose known lead-based paint hazards and provide an EPA informational pamphlet to buyers/tenants.

• Applies to homes built before 1978.
• Seller must disclose known hazards.
• Seller must provide EPA pamphlet.
• Buyers get a 10-day inspection period.

Memory trick: Lead is dead if the house is said to be from '78, or earlier, so disclose it, don't hate her!

A real estate salesperson's license in New York is always held by and active under a sponsoring broker. If the sponsorship ends, the license becomes inactive until a new broker assumes sponsorship.

• Salespersons cannot work independently.
• License held by sponsoring broker.
• Becomes inactive upon separation from broker.

Memory trick: Broker's tie, license high, without them, it will lie.

A false statement of a material fact that a licensee knows to be false or makes recklessly without knowing if it's true, which induces another party to act to their detriment.

• Involves a false statement of fact.
• Must be material (important to decision).
• Can be intentional or negligent.

Memory trick: Truthful talk, no fact-walk, always check the legal clock.

Condominium owners in New York are responsible for monthly common charges (for building maintenance, shared utilities, etc.) and additionally for individual property taxes assessed on their unit and potentially special assessments.

• Own unit as real property.
• Pay individual property taxes directly.
• Common charges cover shared expenses.

Memory trick: Common charges and taxes, separate acts.

A real estate agent's legal and ethical obligation to disclose any known facts that could significantly affect a buyer's decision to purchase a property or the property's value.

• Must be known to the agent.
• Must significantly impact value or desirability.
• Includes environmental hazards.
• Failure to disclose can lead to liability.

Memory trick: Disclose all known 'Material Facts' or face the legal 'Wrath'!

A naturally occurring, colorless, odorless, radioactive gas that seeps from the ground into homes and can cause lung cancer. EPA recommends mitigation if levels are 4 pCi/L or higher.

• Naturally occurring, radioactive.
• Colorless, odorless, tasteless.
• Causes lung cancer.
• EPA action level: 4 pCi/L.

Memory trick: Radon's silent threat, if high, don't let it lie; test again, then mitigate, or you'll regret!

A listing agreement where the seller grants the broker the exclusive right to sell the property and promises to pay a commission if the property sells during the listing period, regardless of who finds the buyer.

• Broker earns commission even if seller finds buyer.
• Most common type of listing.
• Provides maximum protection for the broker.

Memory trick: Exclusive right, broker's might, commission's light.

Comprehensive Environmental Response, Compensation, and Liability Act (1980), federal law establishing liability for hazardous substance releases and creating a trust fund for cleanup.

• Strict liability: no need to prove fault.
• Joint and several liability: any responsible party can be held liable for entire cost.
• Retroactive liability: applies to past actions.
• Applies to current owners, past owners, generators, transporters.

Memory trick: CERCLA's 'Strict, Joint, Retroactive' net catches all, even if you bought it, fault or not, you fall!

In New York, a criminal conviction does not automatically disqualify an applicant for a real estate license. The Department of State must consider factors such as rehabilitation and the relationship between the crime and the license sought, as per Correction Law Article 23-A.

• No automatic denial for convictions.
• DOS must consider rehabilitation.
• Must assess relationship between crime and license.

Memory trick: A past crime isn't a final 'No', if rehabilitation's 'Show'.

New York real estate licensees are prohibited from providing legal advice, drafting legal documents, or interpreting legal implications of contracts. They must advise clients to consult an attorney for legal matters.

• Cannot give legal advice.
• Cannot draft or interpret legal docs.
• Must recommend legal counsel for legal matters.

Memory trick: Don't play 'Lawyer' in a real estate 'Sphere', or your license will disappear.

A physical office location required for all licensed real estate brokers in New York State, which must be registered with the Department of State and clearly visible to the public.

• Mandatory for all brokers.
• Must be in NYS.
• Registered with DOS.

Memory trick: Broker's business, definite place, licensed grace.

Sellers generally must disclose known asbestos-containing materials (ACMs) in residential properties, particularly if disturbed or in poor condition, due to health risks.

• Naturally occurring mineral fiber.
• Used extensively before 1980s.
• Causes lung diseases (mesothelioma, asbestosis).
• Disclosure required if known, especially if friable.

Memory trick: Asbestos in the past, hazards may last; disclose what you know, or your reputation won't grow!

The New York Department of State (DOS) can impose various disciplinary actions on real estate licensees for violations, ranging from reprimands and fines to license suspension or revocation, depending on the severity and frequency of the offense.

• Penalties vary based on offense severity.
• Reprimands, fines, and education are common for minor issues.
• Suspension and revocation are for more serious infractions.

Memory trick: From a whisper to a shout, DOS punishes without a doubt.

Sellers must disclose the presence and status of underground storage tanks (USTs), especially heating oil tanks, due to the high risk of environmental contamination and associated liability.

• High risk of leaks and soil/groundwater contamination.
• Cleanup is very expensive.
• Disclosure of presence and status is crucial.
• Abandonment in place (e.g., sand-filling) does not remove liability for past leaks.

Memory trick: USTs are a hidden 'Time Bomb'; disclose, test, or face cleanup's high cost, for sure you'll succumb!

A form required in New York for sellers of 1-4 unit residential properties to disclose known defects. Sellers can opt to provide a $500 credit to the buyer instead of completing the form.

• Applies to 1-4 unit residential properties.
• Seller provides known defects.
• Seller can opt for $500 credit instead.
• Agent ensures seller makes the choice.

Memory trick: PCDS in NY: Disclose your flaws, or give $500, no pause!

Permission granted by a zoning board of appeals to allow a property to be used in a manner otherwise prohibited by the zoning ordinance, due to unique hardship.

• Changes the fundamental use of the property.
• Requires demonstrating 'unnecessary hardship'.
• Often involves a public hearing and strict criteria.

Memory trick: Use Variances change the 'what' of the land, Area Variances change the 'how much'.

A temporary ban or suspension on the issuance of building permits or new development approvals, typically enacted by local governments to manage rapid growth or address infrastructure deficits.

• Temporary in nature.
• Allows time for planning, infrastructure upgrades, or problem resolution.
• Must be reasonable in duration and scope to be legal.

Memory trick: A 'Moratorium' puts a 'stop' to growth, while 'Incentive' and 'Inclusionary' zoning guide it.

Permission granted by a zoning board of appeals to deviate from dimensional requirements of a zoning ordinance, such as setbacks, height limits, or lot coverage.

• Deals with physical dimensions, not land use.
• Requires demonstrating 'practical difficulty'.
• Generally easier to obtain than a use variance.

Memory trick: Area variances manage 'how much' space, Use variances manage 'what' you do.

A foundational U.S. environmental law that requires federal agencies to assess the environmental effects of their proposed actions prior to making decisions, including impacts on cultural and historical resources.

• Requires Environmental Impact Statements (EIS) for major federal actions.
• Considers a broad range of environmental, social, and economic impacts.
• Includes protection of cultural and historical resources.

Memory trick: NEPA is the 'National' act for 'Everything' environmental, including history.

Laws and rules enacted by federal, state, and local governments to protect the environment, control pollution, and manage natural resources.

• Protect air, water, soil, and ecosystems.
• Require permits for activities affecting sensitive areas (e.g., wetlands).
• Examples: Clean Water Act, NEPA (National Environmental Policy Act).

Memory trick: Environmental regulations protect the 'Earth' from our 'buildings'.

A land use that was lawful prior to the enactment of a new zoning ordinance but does not comply with the current zoning regulations.

• Often called 'grandfathered' uses.
• Generally allowed to continue, but with restrictions.
• Restrictions may include limitations on expansion, rebuilding, or change of use.

Memory trick: Non-conforming uses are 'old' uses that don't fit the 'new' rules.

Permission granted by a zoning board for a specific use that is generally compatible with the zoning district but requires additional review and conditions to ensure harmony with the neighborhood.

• Applies to uses explicitly listed in the zoning ordinance.
• Requires specific conditions to mitigate potential impacts.
• Often involves a public hearing.

Memory trick: Conditional uses are 'conditionally' allowed, needing extra 'conditions'.

Local ordinances that set standards for the division of land into smaller lots, specifying requirements for streets, utilities, drainage, and dedication of open spaces.

• Control the process of dividing land.
• Ensure proper infrastructure and public access.
• Often require plat approval by planning board.

Memory trick: Subdivision makes 'sub-sections' of land, building codes make 'safe structures'.

A long-range blueprint for the physical development of a city or county, providing a framework for future zoning, public works, and economic development decisions.

• Guides future growth over 10-20 years.
• Includes land use, housing, transportation, infrastructure.
• Implemented through zoning ordinances and other regulations.

Memory trick: The 'Master' plan is the big picture, the 'Zoning' is the detailed rules.

A fiduciary duty requiring an agent to act solely in the best interests of their principal, avoiding any conflicts of interest.

• Agent must prioritize client's interests.
• Must avoid self-dealing.
• Requires full disclosure of conflicts.

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

The principal in a real estate transaction is the party who hires the agent and to whom the agent owes fiduciary duties, typically but not always the party paying the commission.

• Principal hires the agent.
• Fiduciary duties owed to the principal.
• Payment of commission does not solely define agency, but is a strong indicator if no other agreement exists.

Memory trick: WHO PAYS, WHO HIRES, WHO'S THE CLIENT?

An agreement where the buyer grants one broker the exclusive right to represent them in finding and purchasing a property, entitling the broker to a commission regardless of who finds the property.

• Broker is sole representative for buyer.
• Broker earns commission even if buyer finds property.
• Creates a strong fiduciary relationship.

Memory trick: Exclusive is only one, non-exclusive is any fun.

A situation in which a real estate broker or salesperson represents both the buyer and the seller in the same transaction.

• Requires informed written consent from both parties.
• Limits the fiduciary duties of loyalty and full disclosure.
• Can be direct or designated (in-house).

Memory trick: SINGLE, DUAL, DESIGNATED, SUB.

A fiduciary duty requiring an agent to keep confidential all information about their principal that could harm the principal's negotiating position or interests.

• Applies to all confidential client information.
• Continues even after the agency relationship ends.
• Only waived by client's explicit permission or legal requirement.

Memory trick: CONFIDENTIALITY is a locked vault for client secrets.

A listing agreement where one broker is authorized to act as the exclusive agent, but the seller retains the right to sell the property themselves without paying a commission to the broker.

• Broker gets commission only if they find the buyer.
• Seller can sell independently without paying commission.
• Limits the broker's protection compared to exclusive right-to-sell.

Memory trick: OPEN EXCLUSIVE RIGHT TO SELL, EXCLUSIVE AGENCY.

An agent's obligation to reveal all known material facts about a property to all parties in a transaction, regardless of who they represent, even if it goes against the client's wishes.

• Applies to all known and latent defects.
• Overrides client confidentiality/obedience for safety/value.
• Protects buyers and avoids misrepresentation.

Memory trick: Material facts outweigh client's silent pacts.

A buyer's agent must prioritize the buyer's best interests, including disclosing all material information that could influence the buyer's decision, even if it involves sensitive information about the seller.

• Always act in the client's best interest.
• Disclose all known material facts.
• Duty outweighs confidentiality to a non-client.

Memory trick: LOYALTY and DISCLOSURE are client's best friends.

A clause in a buyer's agency agreement that protects the agent's commission if the buyer purchases a property introduced by the agent within a specified period after the agreement expires or terminates.

• Prevents clients from bypassing the agent.
• Must be explicitly stated in the agency agreement.
• Has a defined timeframe post-agreement.

Memory trick: CLAW BACK: Commission protection is a claw back on deals.

The automatic termination of an agency relationship upon the death of either the principal or the agent.

• Agency is a personal contract.
• Death automatically ends the relationship.
• Cannot be continued by heirs or estate without new agreement.

Memory trick: Completion, mutual consent, expiration, or operation of law, ends the show.

Occurs when a buyer's agent acts against the buyer's best interests, often by revealing confidential information that weakens the buyer's negotiating position.

• Agent prioritizes other interests over client's.
• Can involve disclosing confidential client info.
• Directly harms client's position.

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

An agent's fiduciary obligation to reveal all material facts and information pertinent to the transaction to their client.

• Applies to all material facts.
• Must be timely and complete.
• A core fiduciary duty.

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

A fiduciary duty requiring an agent to use their skills and knowledge to the best of their ability on behalf of their client, exercising competence and diligence.

• Requires due diligence and competence.
• Involves verifying material facts.
• Protects client from agent's negligence.

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

A type of agency where the agent acts on behalf of a principal whose identity is not revealed to the third party. The third party may not even know an agency relationship exists.

• Principal's identity is hidden.
• Agent acts in their own name.
• Often carries legal risks and is generally discouraged in real estate.

Memory trick: U.G.S.S. — Universal, General, Special, Secret (Undisclosed).

A fiduciary duty requiring a seller's agent to keep all confidential information about their client (the seller) private, even after the agency relationship ends.

• Protects client's negotiating position.
• Includes financial motivations or lowest price.
• Lasts indefinitely, even after transaction.

Memory trick: Fairness to all, but client's secrets are walls.

A client is a principal in an agency relationship owed fiduciary duties, while a customer is a party to whom an agent owes only honesty, fairness, and disclosure of material facts, without a fiduciary relationship.

• Client has an agency agreement; customer does not.
• Fiduciary duties owed to clients, not customers.
• All parties in a transaction are customers to agents they don't represent.

Memory trick: CLIENT gets OLD CAR, CUSTOMER gets FAIR.

The cessation of the agency relationship between a principal and an agent, ending the agent's authority to act on behalf of the principal.

• Can occur by acts of the parties or operation of law.
• Fulfillment of purpose is a common termination method.
• Death, incapacity, or destruction of property also terminates agency.

Memory trick: F.E.M.D.D. — Fulfillment, Expiration, Mutual, Destruction, Death/Incapacity.

An agent's fiduciary duty to act solely in the best interest of their principal. It is breached when an agent engages in self-dealing, undisclosed conflicts of interest, or puts their own interests above the client's.

• Highest duty owed to a client.
• Requires avoiding conflicts of interest.
• Self-dealing is a direct violation.

Memory trick: LOYALTY is the first to fall in self-interest.

An agent's obligation to act in the best interest of their client by including protective clauses or advising on terms that safeguard the client's position.

• Agent advocates for client's best outcome.
• Includes negotiating favorable terms.
• Goes beyond mere instruction following.

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

An agent's responsibility to provide competent counsel and guidance to their client regarding the transaction, including potential risks and best practices.

• Goes beyond mere information provision.
• Involves explaining implications and options.
• Crucial for client's informed decision-making.

Memory trick: Confidentiality binds, but good advice guides.

A fiduciary duty requiring an agent to keep all personal and financial information of their client private, even after the termination of the agency relationship.

• Protects client's private details.
• Includes motivations, financial status, negotiation limits.
• Lasts indefinitely after agency ends.

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

In New York, an agency relationship can be established through a verbal agreement, although a written agreement is strongly advised for legal clarity and protection.

• Verbal agreements are legally recognized.
• Proof of agreement can be challenging.
• Written agreements prevent misunderstandings.

Memory trick: Express is said or written, Implied is shown, Ratified is approved, Estoppel's known.

A mortgage granted by the buyer to the seller as part of the purchase price of real estate. The seller effectively acts as the lender.

• Seller provides financing to the buyer.
• Often used when traditional financing is difficult.
• Can offer more flexible terms.

Memory trick: Purchase money means the seller helps you fund the purchase.

The illegal practice of lending money at interest rates that exceed the maximum legal limits established by state or federal law.

• State laws define legal interest rate caps.
• Protects borrowers from excessive interest charges.
• Violations can lead to severe penalties for lenders.

Memory trick: Usury is too much interest, redlining is rejecting areas, predatory is preying on people.

A court judgment obtained by a lender against a borrower for the remaining balance of a debt after a foreclosure sale, when the sale proceeds were less than the outstanding loan amount.

• Sought after a foreclosure sale.
• Applies when sale proceeds don't cover the full debt.
• Allows lender to pursue borrower's other assets.

Memory trick: When the sale falls short, the judgment fills the void.