In California, a seller signs an exclusive right to sell listing with Broker Nguyen. The listing agreement contains a clause stating: "Commission rates are not set by law and are negotiable between seller and broker." This clause is included because:
Correct Answer
C) California law requires the notice in listing agreements for residential property of one to four units
Business and Professions Code Section 10147.5 requires a boldface notice that the amount or rate of real estate commissions is not fixed by law and is negotiable between the parties. The requirement reaches printed or form agreements that establish a right to compensation for the sale of residential real property of not more than four units or for the sale of a mobilehome, and a parallel requirement now applies to buyer representation agreements. The point is antitrust: it forecloses any suggestion that a standard rate exists. The scope is set by property type, not by price, and the obligation comes from California statute rather than a trade association or a federal mandate.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Laws Of Agency Fiduciary Duties Question
Background Knowledge for Laws Of Agency Fiduciary Duties
Real World Application in Laws Of Agency Fiduciary Duties
Common Mistakes to Avoid on Laws Of Agency Fiduciary Duties Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
More Laws Of Agency Fiduciary Duties Questions
Under California law, the agency disclosure requirements apply to which types of property?
Under California law, when must a buyer's agent give the agency disclosure form to the buyer?
A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
- → Under California Business and Professions Code §10140.6, what must a licensee disclose on solicitation materials intended to be the first point of contact with consumers, such as a business card or an open house sign?
- → A California buyer's agent fails to note a material defect during the visual inspection required by Civil Code §2079. The buyer discovers the defect eight months after close of escrow and wants to sue the agent for breach of that inspection duty. What limitations period applies?
- → Broker Chuck listed a duplex for sale from a corporate owner. After entering into the listing, the officers of the corporation die in a plane crash. What happens to the listing?
- → A listing broker sells an office building to a syndicate of which the broker is a member without informing the seller of this interest. Before closing, the seller discovers the broker’s interest and refuses to sell. What would happen in a civil suit to collect a commission?
- → A California real estate salesperson leaves one brokerage and is retained by another. Who reports the change to the Department of Real Estate, and by when?
- → After a seller accepts an offer, the seller's agent receives a second written offer at a higher price before the sale closes. California licensing rules require the agent to present that offer to the seller. Which fiduciary duty does this requirement carry out?
- → The creation of a valid agency relationship between a principal and an agent requires:
- → Without being licensed as an escrow officer, a broker may not handle escrow activities when they:
- → Seller Sally lists her property with Agent Fred and receives an offer. Agent Fred convinces Seller Sally to accept the offer by verbally promising her he will find her an ideal replacement home before the close of escrow. Agent Fred is unable to find an acceptable replacement home for Seller Sally before the close of escrow. Which of the following is most correct?
- → All of the following statements are true concerning an in-house sale, except:
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam