Unit 5 Flashcards by Rachel B

What is Conway-Bouge decision?

Brokers are practicing limited law when they fill out forms

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What court ruling is Rule F associated with?

Conway-Bouge

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What is the purpose of Rule F?

Deals with (F)orms

- To assist brokers in complying with the Conway-Bouge decisions

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Are you required to use an approved form when your attorney can draft a similar one for general use at the firm?

Yes. You must use an approved form

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Can attorneys draft transaction specific contract for the parties that they represent?

Yes

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Can a brokerage firms attorney prepare a contract to buy for a seller or buyer?

No.

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Can a principal’s attorney prepare a contract to buy for a seller or buyer?

Yes

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Language of approved forms must be used ______ as approved by the commission

Exactly

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How do you delete a clause on a standard form?

Striking through but still legible

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Do attorneys need to be part of an RE transaction?

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Can certain clauses, specified by Rule F, be omitted in the printing of the form? If so, what primarily does not apply?

Yes. Financing methods may not apply.

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If a specific clause is omitted from the form, what must still be printed?

The heading (i.e. assumption) followed by the word omitted

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What is written in the additional provisions section?

Transaction specific provisions

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Brokers’ personal provisions or _______ language may only be in a contract to which the broker is a ________ party (not the Contract to Buy and Sell).

exculpatory, principal

-Can’t say the buyer/seller can’t sue broker if it doesn’t go their way

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Can brokers fill out a form without discussing it with the parties?

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Contract forms generated by computer must:

Must reproduced language exactly as approved
Have software security to prevent language from being delated or changed
Differentiate any language added in the blanks (Italics, bold, larger size, different font. Does not have to be in any specific font - only different. Even handwriting is fine)

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What is Rule F-3?

Addenda

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What is an addenda?

An addendum explains more about something that wasn’t detailed within the contract.

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Who can create an addenda?

Plural of addendum
May be created by an attorney of the principal or brokerage firm
Never created by a broker associate

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Rule F does not apply to the following:

Contracts for new homes with warranties

- Contracts prepared by subdivision developers or new home builders

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What is mediation

Mediation is a process in which a neutral person-the mediator-helps parties reach a settlement to their dispute

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Is a mediation binding?

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Is a resolution binding?

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Yes. If signed by both parties

Is mediation standard in all Colorado contracts? Is it negotiable?

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Yes it is standard. No it is not negotiable.

The parties (brokerage firm and consumer or seller and buyer) agree to submit any dispute about the contract in mediation within _____ days.

If a party does not come to an agreement during a mediation, will a resolution be imposed?

Do both parties need to agree on a mediator?

Yes

Do both parties split the cost of mediation? Is this negotiable?

Yes. No.

After fair mediation (if the dispute is not resolved), either party may go through _______ or go into court for ________.

Arbitration, Litigation.

What is arbitration?

A form of alternative dispute resolution, is a legal technique for the resolution of disputes outside the courts.

What is litigation?

Litigation is the term used to describe proceedings initiated between two opposing parties to enforce or defend a legal right. Litigation is typically settled by agreement between the parties, but may also be heard and decided by a jury or judge in court.

What are the two ways to represent as a broker?

- Agent | - Transaction Broker

Agents owe OLD CAR. What does OLD CAR stand for?

- Obedience - Loyalty - Disclosure - Confidentiality - Accountability - Reasonable care/diligence

What is the main difference between agent and transaction broker?

Agents only represent 1 side (buyer OR seller), whereas transaction brokers represent both sides (at the same time).

How is an agency representation created?

Through a written agency listing contract

Agent brokers require additional fiduciary duties such as _____, ________, _________.

- Obedience - Loyalty - Advocacy

With an agency broker, you owe all loyalty to the ________ whose interest are before all others.

Principal

Transaction brokers owe DCAR. What does DCAR stand for?

- Negative disclosure (only things that could change your mind) - Confidentiality - Accountability ($ and docs) - Reasonable skill and care

How is a transaction broker representation created?

-Written exclusive right-to-buy or exclusive-right-to-sell contract and checking the box at the top for transaction broker OR -Created by default using a written disclosure

Transaction brokers act as a mediator or referee, thus, they keep what information confidential?

- Motivation - Price - Terms

What is required to be written in the office manual of a brokerage firm?

How they designate broker associates to represent the firm's clients

A brokerage firm is obligated to supervise each broker associated based on their experience level. How many years of experience requires a high level of supervision?

Less than 2

True or False? All contracts do not belong to the brokerage firm?

False.

The ______ are the consumer (buyer, seller, landlord, tenant) and the brokerage firm

Parties (to a contract)

Can a brokerage firm's attorney or consumer's attorney draft a transition specific listing agreement?

Yes

The brokerage firms attorney may draft an _______ to be used used by all brokers in the firm for all listings.

Addendum (i.e. mold)

What are express contracts? Are seller and buyer listing contracts express contracts?

- Written or oral contacts | - Yes, they are express

Are implied contracts acceptable? (implied only through action)

Can a broker refuse to take a listing or work with a buyer?

Yes

Are seller and buyer listing contracts (exclusive right to buy/sell) used to establish representation? Do they meet the express written agency agreement requirement?

- Yes | - Yes

Is the compensation charged by brokerage firms set by law? If not, is it negotiable?

- It is not set by law | - It is negotiable

Who technically earns the commission?

The brokerage firm

Is the seller's listing fee/commission negotiable?

Yes

Who typically pays the buyer's broker fee/commission?

Listing broker (then seller, then buyer)

What is another term for buyer's broker's fee?

Success fee

Unit 5 Flashcards

(55 cards)