FRC Real Estate Broker Examination cheat sheet

Broker license requires 24 months of active sales associate experience within the preceding 5 years, completion of 72 hours of broker prelicense education, and a passing score on the state broker exam.

A brokerage entity must be registered as a business and must designate a qualifying broker; a broker may qualify more than one entity only with FREC authorization, and each entity must have a distinct registered name.

Sales associates and broker associates must register with a single employing broker at a time and must notify the DBPR within 10 business days of any change of employer.

A broker may not pay compensation to an unlicensed person for real estate brokerage activity; compensation may be paid to a licensed person or a licensed entity, but not to a corporation whose qualifying broker is unlicensed.

Branch offices must be registered and placed under the supervision of a licensed broker or broker associate; the main office license must be in place before a branch can be activated.

Continuing education for brokers is 14 hours per 2-year renewal cycle, including 3 hours of core law, 2 hours of ethics, and 2 hours of business practices; the remaining hours may be general.

Grounds for discipline include failure to account for trust funds, false advertising, undisclosed dual agency, and failure to maintain required records; penalties range from reprimand to revocation and fines up to $5,000 per violation.

A license becomes involuntarily inactive upon failure to renew; an involuntarily inactive licensee may not engage in brokerage activity until the license is reinstated and renewal fees and any late fees are paid.

A written brokerage agreement must specify the term, the services to be performed, the compensation, and whether the relationship is exclusive; a single-agent listing must disclose the broker's agency relationship to the seller and identify the buyer's agent status.

Transaction files must be retained for at least 5 years from the date of the transaction; trust account records must be retained for at least 3 years from the date of the transaction.

A broker must have written office policy on advertising, agency disclosure, escrow handling, and fair housing; each sales associate must acknowledge receipt of the policy.

Advertising must identify the brokerage name as registered with the DBPR; a team name may be used only if the brokerage name appears in the advertisement and the team is registered.

A broker may not accept compensation from more than one party without written disclosure and consent; a transaction broker may receive compensation from both buyer and seller with disclosure.

A broker's compensation is negotiable and cannot be set by a trade association or multiple listing service; steering or refusing to show a property based on commission offered violates antitrust principles.

A brokerage must maintain a written policy for handling buyer and seller deposits, and the broker must be able to produce a ledger showing each transaction's receipt and disbursement.

The broker is responsible for the acts of the brokerage's sales associates performed within the scope of the brokerage relationship; supervision must be documented in writing.

A broker must conduct a reasonable review of each transaction file before closing, including contract, disclosure, and escrow documents; the review should be dated and signed.

A sales associate may not operate as an independent contractor for brokerage purposes; the broker controls the associate's brokerage activity regardless of tax classification.

Newly licensed sales associates must complete 45 hours of post-license education within the first renewal cycle; failure to do so results in the license becoming void.

Office policy should address advertising approval, social media use, use of team names, referral fees, and handling of confidential information.

The broker must ensure that associates are trained on agency disclosure, fair housing, and escrow procedures, and must maintain records of that training.

A broker must notify the DBPR of a change of business address, business name, or qualifying broker within 10 business days of the change.

A contract for the sale of real property must be in writing and signed by the party to be charged; the statute of frauds requires a description of the property and the essential terms.

The standard Florida residential contract provides a 3-day inspection period unless modified, and the buyer may terminate for any reason within that period by written notice.

The effective date of a contract is the date the last party signs or initials the offer and delivers it; delivery may be by electronic means if the contract permits.

The Florida Realtors/Florida Bar contract allows the buyer to select a closing date and requires the seller to deliver a seller's property disclosure; failure to deliver may allow rescission.

The residential sale contract provides that time is of the essence only if the parties check the box; absent that, a reasonable extension may be available.

Liquidated damages in the standard contract are limited to the buyer's deposit, and the seller must elect that remedy within a specified period after default.

A contract may be assigned only if the contract permits assignment; the standard form provides that the buyer may not assign without the seller's written consent.

The statute of frauds does not apply to leases of one year or less, but leases longer than one year must be in writing and signed.

Florida recognizes transaction broker, single agent, and no brokerage relationship; a transaction broker is presumed unless the parties agree otherwise in writing.

Transaction broker duties include honesty, disclosure of known facts materially affecting value, accounting for funds, and limited confidentiality; the broker may assist both parties but cannot advocate for one over the other.

Single agent duties include loyalty, confidentiality, obedience to lawful instructions, disclosure, accounting, and reasonable care; the agent must not act adversely to the principal.

Agency disclosure must be made in writing before the parties sign a contract and must be acknowledged by the parties; the disclosure must identify the type of relationship.

A broker who represents both buyer and seller as a single agent must obtain written consent; without consent, the broker must act as a transaction broker.

Confidential information learned from a principal may not be disclosed to the other party; however, known material defects in the property must be disclosed to all parties.

A broker must disclose any interest the broker or a family member has in the property, and any compensation received from a third party such as a lender or title company.

Agency relationships may be terminated by expiration of the term, completion of the purpose, mutual agreement, or revocation; the fiduciary duty of confidentiality survives termination for a reasonable period.

Escrow funds must be deposited in a trust account within 3 business days of receipt; the broker must maintain a separate ledger for each transaction.

A broker may not commingle personal or brokerage operating funds with trust funds; the trust account must be designated as a trust account and titled in the brokerage name.

A broker may accept a deposit in the form of a check made payable to the brokerage or to a title company; if made payable to the seller, the broker must obtain the seller's written authorization.

The broker must perform a monthly reconciliation of the trust account, including bank statement balance, checkbook balance, and ledger balance, and must retain the reconciliation for at least 3 years.

A broker may not use trust funds for any purpose other than the transaction for which they were deposited; disbursement requires written authorization from the parties.

If a dispute arises over escrow funds, the broker may hold the funds until the dispute is resolved or may interplead the funds with the court; the broker must notify the parties in writing.

A broker must maintain a record of all trust account transactions, including receipts, disbursements, and the identity of the parties, for at least 3 years.

A quitclaim deed conveys whatever interest the grantor has, with no warranty; a general warranty deed includes covenants of seisin, quiet enjoyment, and warranty forever.

A special warranty deed warrants only against defects created by the grantor, not against prior owners.

A deed must be in writing, signed by the grantor, identify the grantee, contain a legal description, and be delivered to the grantee to be effective.

Recording a deed provides constructive notice to subsequent purchasers; a deed that is not recorded may be void against a subsequent bona fide purchaser for value without notice.

A title insurance policy insures against defects in title; an owner's policy is issued for the benefit of the owner, and a lender's policy protects the lender's interest.

A survey may reveal encroachments, easements, or boundary discrepancies; a title commitment should be reviewed for exceptions and requirements before closing.

Tenancy in common allows unequal shares and no right of survivorship; joint tenancy with right of survivorship requires equal shares and the four unities.

A mortgage is a lien on real property that secures a debt; a note is the promise to repay, and the mortgage gives the lender the right to foreclose on default.

A fixed-rate mortgage has a constant interest rate and payment; an adjustable-rate mortgage has an initial fixed period followed by rate adjustments tied to an index plus margin.

The loan-to-value ratio is the loan amount divided by the property value; a higher LTV increases lender risk and may require mortgage insurance.

The debt service coverage ratio equals net operating income divided by annual debt service; a ratio below 1.0 indicates the property does not generate enough income to cover debt.

A conventional loan is not insured by a government agency; FHA loans are insured by HUD, and VA loans are guaranteed by the Department of Veterans Affairs.

The Truth in Lending Act requires disclosure of the annual percentage rate, finance charge, and total payments; the Closing Disclosure must be provided at least 3 business days before closing.

The Real Estate Settlement Procedures Act prohibits kickbacks and unearned fees for settlement services; affiliated business arrangements require disclosure and no required use.

The sales comparison approach estimates value by comparing recent sales of similar properties and adjusting for differences; it is most reliable for residential property.

The cost approach estimates value as replacement cost minus depreciation plus land value; it is most reliable for new construction or special-purpose property.

The income approach capitalizes net operating income using a capitalization rate; value equals net operating income divided by the capitalization rate.

Gross rent multiplier equals sale price divided by gross monthly rent; it is a quick screening tool and does not account for operating expenses.

An appraisal is a written opinion of value prepared by a licensed or certified appraiser; a broker price opinion is a broker's estimate and may not be used for federally related transactions.

Market value assumes a willing buyer and seller, neither under duress, both informed, and a reasonable exposure time; it is not the same as the highest price a particular buyer would pay.

Depreciation in the cost approach includes physical deterioration, functional obsolescence, and external obsolescence; only external obsolescence is generally incurable.

A residential lease must disclose the name and address of the landlord or the landlord's authorized agent; the tenant must be given a written copy of the lease.

A security deposit must be held in a separate account or posted a surety bond; the landlord must return the deposit within 15 days of the tenant vacating if no claim is made, or within 30 days if a claim is made.

A landlord must give 7 days' written notice of intent to enter for inspection or repair, and may enter only at reasonable times; entry without notice may be a violation.

A landlord may not retaliate against a tenant for exercising legal rights, such as reporting code violations, within 3 months of the tenant's action.

A tenant may withhold rent only if the landlord fails to maintain the property and the tenant follows the statutory procedure, including written notice and a reasonable time to cure.

A lease for more than one year must be in writing; a lease for one year or less may be oral, but oral leases are difficult to enforce and should be avoided.

A property manager owes the owner fiduciary duties, including accounting for rents and expenses, and must maintain records of all transactions.

The Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, or disability; Florida law adds age and marital status.

A broker may not make a statement that indicates a preference or limitation based on a protected class, including in advertising or in response to inquiries.

Reasonable accommodations are required for tenants with disabilities, and a landlord may not refuse to allow a service animal even if the lease prohibits pets.

The Fair Housing Act prohibits steering, blockbusting, and redlining; blockbusting is inducing panic selling by suggesting that members of a protected class are moving into the neighborhood.

A broker may not refuse to show a property or provide services based on a protected class, and may not impose different terms or conditions on a loan or sale.

The REALTOR Code of Ethics requires honesty, disclosure of pertinent facts, and avoidance of exaggeration; it applies to members and is enforced by local boards.

The Florida Deceptive and Unfair Trade Practices Act prohibits unfair or deceptive acts in commerce; a broker may be liable for misleading advertising or misrepresentation.

The statute of limitations for a written contract in Florida is 5 years; for an oral contract it is 4 years.

A contract must have an offer, acceptance, consideration, and legal purpose; a contract with an illegal purpose is void.

A counteroffer operates as a rejection of the original offer and creates a new offer; the original offer is no longer available for acceptance.

The parol evidence rule prohibits introducing prior or contemporaneous oral statements to contradict a fully integrated written contract.

The standard Florida contract provides that the buyer may conduct inspections and may terminate within the inspection period; if the buyer does not terminate, the buyer accepts the property as-is.

A seller's property disclosure must be delivered before the buyer signs the contract; if delivered after, the buyer may rescind within 3 days.

A contract may be rescinded for fraud, misrepresentation, mistake, duress, or undue influence; rescission returns the parties to their original positions.