A Virginia-licensed salesperson, Derek, is also a licensed auctioneer. He conducts a real estate auction on behalf of a seller client and collects a buyer's premium from the winning bidder without disclosing this arrangement to the seller. The seller later discovers this and files a VREB complaint. Under Virginia License Law, Derek's most significant regulatory exposure arises from:
Correct Answer
B) Accepting compensation from a party other than his client without prior written disclosure and consent
Under Va. Code § 54.1-2130 and 18 VAC 135-20-260, a licensee may not accept compensation from any party to a transaction other than their client without prior written disclosure to and consent from all parties. Derek's collection of a buyer's premium — compensation paid by the buyer — without disclosing this to his seller client constitutes receiving undisclosed compensation from a transaction party, which is a clear ground for disciplinary action. This violates both the duty of loyalty and the prohibition on undisclosed compensation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
- → A responsible broker in Wyoming asks about a first-time salesperson applicant prepares for Wyoming-specific licensing. Which answer follows Wyoming law?
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- → A responsible broker in Wyoming asks about the Commission director receives a complaint about real estate practice. Which answer follows Wyoming law?
- → For the Wyoming salesperson state portion, a first-time Wyoming salesperson applicant starts the application process. Which statement is correct?
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- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
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