Bermuda Real Estate Exam key terms

The statutory requirement that a person who sells, buys, rents, or manages real property for another for compensation hold a current licence from the Bermuda Real Estate Commission, and that unlicensed brokerage activity is an offence.

The regulatory body that issues and renews real estate licences, sets standards of conduct for licensees, investigates complaints, and may discipline licensees through reprimand, suspension, or revocation of licence.

The published rules governing how licensees must treat clients, customers, and the public, covering honesty, disclosure of conflicts, competence, confidentiality, advertising accuracy, and handling of money held on behalf of others.

The requirement that licensees complete a set number of approved training hours each licensing cycle, covering law updates, ethics, anti-money-laundering duties, and practice skills, in order to renew a licence.

A dedicated bank account, separate from the brokerage's own operating funds, into which deposits and other money held for clients must be paid, with records kept so each client's balance can be identified at any time.

The ledgers, receipts, bank statements, and reconciliations a brokerage must keep to show that all client money is accounted for, retained for the period set by regulation, and open to inspection by the regulator.

A legal relationship in which one person, the agent, is authorised to act for another, the principal, and owes that principal duties of loyalty, obedience to lawful instructions, disclosure, and confidentiality.

The highest standard of care owed by an agent, requiring undivided loyalty, full disclosure of material facts, avoidance of secret profit, confidentiality, and acting in the principal's best interest ahead of the agent's own.

An arrangement in which the brokerage represents only one party in a transaction, either the seller or the buyer, and owes fiduciary duties to that party alone while dealing fairly and honestly with the other side.

A situation where one brokerage represents both buyer and seller in the same transaction, permitted only with the informed written consent of both parties and requiring scrupulous neutrality and equal disclosure to each.

Any personal, financial, or family interest that could bias a licensee's advice or dealing, which must be disclosed promptly and in writing so the client can decide whether to continue or seek independent advice.

The agent's duty not to reveal a principal's private information, such as motivation to sell, financial position, or acceptable price, without authority, and to keep that duty after the agency ends.

A client's agreement to a proposed arrangement, such as dual agency or a referral fee, given after receiving a clear explanation of the relevant facts and risks, and normally recorded in writing.

The written contract between a seller and a brokerage that sets out the agency type, the asking price, the commission, the term, and the duties of each side; it authorises the brokerage to market the property.

A listing in which one brokerage is appointed as the seller's sole agent for a stated period, earning the agreed commission whether the buyer is introduced by that brokerage or by another source during the term.

A non-exclusive arrangement in which the seller may appoint several brokerages at once, and only the brokerage that produces the ready, willing, and able buyer earns the commission.

A written contract in which a buyer appoints a brokerage to act for the buyer, defining the property search, the term, the duties owed, and how and when the brokerage will be paid.

A buyer who is prepared to accept the seller's terms, has the legal capacity to contract, and has the financial means to complete the purchase, thereby satisfying the condition for earning a commission.

Money paid by a buyer on signing a sale agreement as evidence of good faith and part payment of the price, normally held by a lawyer, broker, or escrow holder until completion or forfeiture.

Bermuda's system in which ownership of registered land is recorded on a public register, so that the register itself, rather than a bundle of old deeds, is the authoritative evidence of who owns the property.

The written instrument that transfers legal ownership of property from the seller to the buyer, identifying the parties, the land, the price, and any covenants or rights that run with the property.

An estate in land of unlimited duration in which the owner holds the property and the land beneath it indefinitely, subject to planning controls, taxation, and any registered encumbrances.

An estate in land held for a fixed term of years under a lease, after which the property returns to the landlord unless the lease is renewed or extended by agreement.

A lease granted by the Crown, typically for a long term of years, over land owned by the State, with conditions on development and use and often a requirement to pay an annual rent.

Any registered right, charge, or restriction that burdens a property, such as a mortgage, easement, restrictive covenant, or caveat, and which a buyer must discover and address before completion.

A notice registered against a property by a person claiming an interest in it, which prevents the owner from dealing with the title free of that claim until the caveat is withdrawn or removed by order.

A right enjoyed by one property over another, such as a right of way or a right to run services, which is registered against the burdened property and passes with the land on sale.

A registered charge over property given to a lender as security for a loan, under which the lender may take possession or sell the property if the borrower fails to meet the repayment terms.

The amount of a loan expressed as a percentage of the property's appraised value or purchase price, whichever is lower; a higher ratio generally means a larger deposit and stricter lending terms.

The final stage of a transaction when the balance of the purchase price is paid, the conveyance is delivered or registered, and the buyer becomes entitled to possession of the property.

The binding contract in which the seller agrees to sell and the buyer agrees to buy, setting the price, deposit, completion date, and conditions such as financing or satisfactory survey.

The seller's right, on a buyer's default under the sale agreement, to keep the deposit paid, subject to the contract terms and any relief a court may grant.

An independent, evidence-based opinion of a property's market value at a stated date, prepared by a qualified valuer and relied on by lenders, buyers, sellers, and courts.

A pricing exercise that compares the subject property with recently sold, currently listed, and withdrawn properties of similar type, size, and location to suggest an asking or offer price.

The estimated amount for which a property should exchange on the valuation date between a willing buyer and a willing seller, after proper marketing, each acting knowledgeably and without compulsion.

The pace at which available properties are sold or let over a period, usually expressed as a number of months of supply, used to judge whether the market favours sellers or buyers.

The approval required from the planning authority before development, including most new building, subdivision, or change of use, may lawfully begin; conditions may be attached to any grant.

The system of reviewing applications, imposing conditions, and enforcing planning decisions to ensure building and land use conform to the island's development plan and planning law.

Rules in the development plan that divide land into areas and specify the permitted uses, density, height, and setbacks for each, so that incompatible activities are kept apart.

A separate approval confirming that proposed construction work complies with the building code, structural, fire, and safety standards, and which is distinct from planning permission.

A government tax charged on the transfer of property, calculated by reference to the purchase price or assessed value, and normally paid by the buyer on or before completion.

An annual tax levied on the assessed value of land and buildings, payable by the owner, with the assessment and rate set under Bermuda's tax legislation and used to fund public services.

The fee a brokerage earns for its services, usually a percentage of the sale price or a stated amount, agreed in writing in the listing or buyer representation agreement before work begins.

A payment made by one brokerage to another, or to a third party, for introducing a client, which must be disclosed to the client, agreed in writing, and consistent with licensing rules.

The legal duties imposed on real estate businesses to identify clients, understand the purpose of transactions, monitor for suspicious activity, keep records, and report suspicions to the authorities.

The process of identifying a client and verifying identity using reliable documents, understanding the client's business and source of funds, and updating that information as risk requires.

The natural person who ultimately owns or controls a company, trust, or other legal arrangement, or on whose behalf a transaction is carried out, and who must be identified under AML rules.

A person entrusted with prominent public functions, or a close associate or family member of such a person, whose transactions carry higher money-laundering risk and require enhanced checks.

A confidential report a licensee files with the financial intelligence authorities when a transaction or client behaviour gives reasonable grounds to suspect money laundering or terrorist financing.

The ethical standard requiring a licensee to be honest and accurate in marketing, to present property information truthfully, and to avoid misleading or high-pressure conduct toward any party.