FREC EXAM PRACTICE 2
| Term/Front | Definition/Back |
|---|---|
| 1 What does FREC stand for? | Florida Real Estate Commission |
| 2 What is the primary role of FREC? | To regulate real estate licensees in Florida. |
| 3 How many members serve on FREC? | Seven members. |
| 4 How many FREC members must be licensed brokers? | Four members. |
| 5 How many FREC members must be licensed brokers who have held active licenses for at least five years? | Four members. |
| 6 How many FREC members are consumer members with no real estate background? | Two members. |
| 7 Who appoints the members of FREC? | The Governor of Florida. |
| 8 How long is a FREC member's term? | Four years. |
| 9 What is the maximum number of consecutive terms a FREC member may serve? | Two terms. |
| 10 What is the purpose of FREC meetings? | To conduct regulatory and disciplinary business. |
| 11 What authority does FREC have over licensees? | It can issue discipline for violations of real estate law. |
| 12 Can FREC create real estate laws? | No, it enforces laws passed by the legislature. |
| 13 What chapter of Florida Statutes contains real estate license law? | Chapter 475. |
| 14 What administrative rules govern FREC operations? | Chapter 61J2 of the Florida Administrative Code. |
| 15 What is a quorum for a FREC meeting? | Four members. |
| 16 Who acts as the chairperson of FREC meetings? | The chair elected by FREC members. |
| 17 What is the purpose of a FREC citation? | To resolve minor violations without a formal hearing. |
| 18 What is the purpose of a FREC hearing? | To determine disciplinary action for violations. |
| 19 What is the Florida Department of Business and Professional Regulation (DBPR)? | The state agency that oversees FREC and professional licensing. |
| 20 What is the primary role of DBPR in real estate? | Administering licenses and enforcing professional regulations. |
| 21 What does DRE stand for in Florida real estate? | Division of Real Estate |
| 22 What is the role of the Division of Real Estate (DRE)? | Providing administrative support to FREC. |
| 23 Who employs the investigators that examine real estate complaints? | DBPR |
| 24 Who issues real estate licenses in Florida? | DBPR |
| 25 Who regulates real estate licensees in Florida? | FREC |
| 26 What is a voluntary inactive license? | A license placed inactive at the licensee's request. |
| 27 How long can a Florida real estate license remain involuntarily inactive before becoming null and void? | Two years. |
| 28 How long can a Florida real estate license remain voluntarily inactive? | Indefinitely if renewal requirements are met. |
| 29 How many hours of continuing education are required every renewal period? | 14 hours. |
| 30 How many hours of ethics and business practices are included in Florida continuing education requirements? | 3 hours. |
| 31 What is the renewal period for Florida real estate licenses? | Every two years. |
| 32 Which state does not have mutual recognition with Florida? | California. |
| 33 What is a broker in Florida real estate? | A person licensed to operate independently and supervise licensees. |
| 34 Can a sales associate work independently in Florida? | No |
| 35 Who is responsible for the actions of sales associates working under a brokerage? | The broker |
| 36 What is a broker associate? | A broker who chooses to work under another broker. |
| 37 What is an independent contractor relationship in real estate? | A relationship where the agent controls how work is performed. |
| 38 What is required for a sales associate to be paid a commission? | Payment must come through the employing broker. |
| 39 Can a seller pay a sales associate directly? | No |
| 40 Can a broker share a commission with an unlicensed person? | No |
| 41 Can a broker pay a referral fee to an unlicensed person? | No |
| 42 What is the minimum age to obtain a Florida real estate license? | 18 years old. |
| 43 What education level is required for a Florida real estate license? | High school diploma or equivalent. |
| 44 How many questions are on the Florida sales associate exam? | 100 questions. |
| 45 What score is required to pass the Florida sales associate exam? | 75% |
| 46 How many questions are on the Florida broker exam? | 100 questions. |
| 47 What score is required to pass the Florida broker exam? | 75% |
| 48 Who is the principal in an agency relationship? | The person being represented. |
| 49 Who is the agent in an agency relationship? | The licensee representing the principal. |
| 50 What does the acronym FREC use for fiduciary duties? | Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Care. |
| 51 What does the fiduciary duty of obedience require? | Following lawful instructions from the principal. |
| 52 What does the fiduciary duty of loyalty require? | Acting in the principal's best interests. |
| 53 What does the fiduciary duty of disclosure require? | Informing the principal of material facts. |
| 54 What does the fiduciary duty of confidentiality require? | Protecting the principal's private information. |
| 55 What does the fiduciary duty of accounting require? | Properly handling money and property entrusted to the agent. |
| 56 What does the fiduciary duty of care require? | Using skill, diligence, and competence in representation. |
| 57 What is single agency? | Representation of one party with full fiduciary duties. |
| 58 What is transaction brokerage? | Limited representation without fiduciary duties of loyalty and confidentiality. |
| 59 What is the presumed brokerage relationship in Florida? | Transaction brokerage. |
| 60 What is no brokerage relationship? | Providing limited services without representation. |
| 61 Does a no brokerage relationship include fiduciary duties? | No |
| 62 When must the single agent notice be disclosed? | Before or at the time of entering into a listing agreement or showing property. |
| 63 When must the transaction broker notice be disclosed? | Before the customer signs a contract. |
| 64 Can a broker transition from single agent to transaction broker? | Yes, with written consent from the principal. |
| 65 What is designated sales associate representation? | Appointing specific associates to represent different parties in the same brokerage. |
| 66 What is constructive notice? | Information that a person is assumed to know because it is publicly recorded. |
| 67 What is a material fact? | A fact that could influence a buyer's or seller's decision. |
| 68 What is stigmatized property? | Property associated with events that may affect buyer perception but not physical condition. |
| 69 Must a Florida licensee disclose known material defects? | Yes |
| 70 What is the Johnson v. Davis decision? | A Florida case requiring sellers to disclose known facts that materially affect property value. |
| 71 What is latent defect? | A hidden defect not easily discovered by inspection. |
| 72 What is a patent defect? | A defect that is visible or readily observable. |
| 73 What is caveat emptor? | Let the buyer beware. |
| 74 Does caveat emptor fully apply to residential real estate in Florida? | No, because material defects must be disclosed. |
| 75 What is the purpose of an escrow account? | To hold funds belonging to others in trust. |
| 76 Who is responsible for escrow funds held by a brokerage? | The broker. |
| 77 How many business days does a broker have to notify FREC of an escrow dispute? | 15 business days. |
| 78 How many business days does a broker have to institute one of the settlement procedures after notifying FREC? | 30 business days. |
| 79 What are the four authorized escrow settlement procedures? | Mediation, arbitration, litigation, and escrow disbursement order. |
| 80 What is an escrow disbursement order (EDO)? | An order from FREC directing the broker on how to disburse escrow funds. |
| 81 What is arbitration in an escrow dispute? | A binding decision made by a neutral third party. |
| 82 What is mediation in an escrow dispute? | A nonbinding process to help parties reach an agreement. |
| 83 What is litigation? | Resolving a dispute through the court system. |
| 84 What is the maximum time a broker may hold an escrow check before depositing it? | By the end of the third business day after receipt. |
| 85 What is a business day for escrow purposes? | Any day that the brokerage office is open for business. |
| 86 Where must escrow funds be deposited? | In a Florida escrow account, title company, or attorney trust account. |
| 87 What is a security deposit? | Money held to protect a landlord against tenant default or damages. |
| 88 What is earnest money? | A buyer's deposit showing good faith in a purchase transaction. |
| 89 What is the Florida Real Estate Recovery Fund? | A fund that reimburses consumers harmed by certain licensee misconduct. |
| 90 What is the maximum payment from the Recovery Fund for one transaction? | $50,000. |
| 91 What is the maximum amount paid for claims against one licensee? | $150,000. |
| 92 What happens to a license after payment is made from the Recovery Fund on behalf of a licensee? | The license is automatically suspended until repayment. |
| 93 What is a lis pendens? | A recorded notice of pending legal action involving property. |
| 94 What is specific performance? | A court order requiring a party to fulfill contract obligations. |
| 95 What is rescission? | Canceling a contract and returning the parties to their original positions. |
| 96 What is liquidated damages? | Predetermined damages agreed upon in a contract. |
| 97 What is an option contract? | A contract giving a buyer the right, but not the obligation, to purchase property. |
| 98 What consideration is required for an option contract? | Valuable consideration from the option holder. |
| 99 What is a bilateral contract? | A contract in which both parties make promises. |
| 100 What is a unilateral contract? | A contract in which one party makes a promise that is accepted by performance. |
| 101 What is assignment of contract? | Transferring contractual rights to another party. |
| 102 What is leasehold estate? | A possessory interest in property for a specific period of time. |
| 103 What is fee simple estate? | The highest form of property ownership recognized by law. |
| 104 What is fee simple absolute? | Ownership with the greatest bundle of rights and fewest restrictions. |
| 105 What is a life estate? | Ownership that lasts for the lifetime of a specified person. |
| 106 Who is the life tenant? | The person who holds a life estate. |
| 107 What is a remainderman? | The person who receives ownership after a life estate ends. |
| 108 What is a reversion estate? | Ownership that returns to the original owner after a life estate ends. |
| 109 What is tenancy in common? | Ownership where each owner has a separate and potentially unequal interest. |
| 110 Does tenancy in common include right of survivorship? | No |
| 111 What is joint tenancy? | Ownership with equal interests and right of survivorship. |
| 112 What are the four unities required for joint tenancy? | Time, title, interest, and possession. |
| 113 What is tenancy by the entirety? | Ownership between married spouses with right of survivorship. |
| 114 Who may own property as tenants by the entirety? | Legally married spouses only. |
| 115 What is community property? | Property ownership system used in some states but not Florida. |
| 116 What is severance in joint tenancy? | The act of ending the joint tenancy relationship. |
| 117 What is partition? | A court action to divide jointly owned property. |
| 118 What is severalty ownership? | Ownership by one person or one legal entity. |
| 119 What is cooperative ownership? | Ownership through shares in a corporation that owns the property. |
| 120 What are common elements in a condominium? | Areas jointly owned by all unit owners. |
| 121 What are limited common elements? | Common areas reserved for the use of specific unit owners. |
| 122 What is a homeowners association (HOA)? | An organization that manages a residential community and enforces rules. |
| 123 What are deed restrictions? | Private limitations placed on property use by the developer or property owners. |
| 124 What are CC&Rs? | Covenants, Conditions, and Restrictions governing a community. |
| 125 What is a special assessment? | An additional fee charged to owners for unexpected expenses or improvements. |
| 126 What is a planned unit development (PUD)? | A development combining private ownership with shared common areas. |
| 127 What is the bundle of rights in real estate? | The rights to possess, control, enjoy, exclude, and dispose of property. |
| 128 What is the right of disposition? | The right to sell, lease, transfer, or give away property. |
| 129 What is the right of exclusion? | The right to prevent others from entering or using the property. |
| 130 What is the right of enjoyment? | The right to use property without interference. |
| 131 What is the right of control? | The right to determine how property is used within legal limits. |
| 132 What is the right of possession? | The right to occupy and use the property. |
| 133 What is an encumbrance? | A claim, charge, or liability that affects property rights. |
| 134 What is a lien? | A claim against property used to secure payment of a debt. |
| 135 What is a voluntary lien? | A lien created by the property owner's actions. |
| 136 What is an involuntary lien? | A lien imposed by law without the owner's consent. |
| 137 What is a specific lien? | A lien affecting one particular property. |
| 138 What is a property tax lien? | An involuntary specific lien for unpaid property taxes. |
| 139 What is a judgment lien? | An involuntary general lien resulting from a court decision. |
| 140 What is a mechanic's lien? | A lien filed by contractors or suppliers for unpaid work or materials. |
| 141 Which lien generally has the highest priority in Florida? | Property tax lien. |
| 142 What is lien priority? | The order in which liens are paid after foreclosure. |
| 143 What does "first in time, first in right" mean? | Earlier recorded liens generally have priority over later liens. |
| 144 What is foreclosure? | The legal process used to satisfy a debt through the sale of property. |
| 145 What is a deficiency judgment? | A court judgment for the remaining debt after foreclosure proceeds are applied. |
| 146 What is equity in real estate? | The owner's interest in property value after debts are deducted. |
| 147 What is leverage in real estate? | Using borrowed money to purchase property. |
| 148 What is amortization? | Gradual repayment of a loan through scheduled payments. |
| 149 What is principal? | The amount borrowed on a loan. |
| 150 What is interest? | The cost of borrowing money. |
| 151 What is an acceleration clause? | A clause making the entire loan balance due after default. |
| 152 What is a prepayment penalty? | A fee charged for paying off a loan early. |
| 153 What is discount point? | Prepaid interest used to lower the loan interest rate. |
| 154 What is the difference between a promissory note and a mortgage? | The note creates the debt and the mortgage secures the debt with property. |
| 155 What is a mortgagee? | The lender in a mortgage transaction. |
| 156 What is a mortgagor? | The borrower in a mortgage transaction. |
| 157 What is title theory? | A theory where the lender holds title until the loan is paid. |
| 158 What theory of mortgages does Florida follow? | Lien theory. |
| 159 What is lien theory? | A theory where the borrower keeps title while the lender holds a lien. |
| 160 What is a deed of trust? | A security instrument involving a borrower, lender, and trustee. |
| 161 Does Florida primarily use mortgages or deeds of trust? | Mortgages. |
| 162 What is a conventional loan? | A loan not insured or guaranteed by the government. |
| 163 What is an FHA loan? | A loan insured by the federal government to help borrowers qualify more easily. |
| 164 What does FHA stand for? | Federal Housing Administration. |
| 165 What is a VA loan? | A loan guaranteed for eligible military service members and veterans. |
| 166 What does VA stand for? | Department of Veterans Affairs. |
| 167 What is a USDA loan? | A loan program for eligible rural properties and borrowers. |
| 168 What does USDA stand for? | United States Department of Agriculture. |
| 169 What is a balloon mortgage? | A loan with smaller payments followed by a large final payment. |
| 170 What is underwriting? | The process of evaluating loan risk and borrower qualifications. |
| 171 What is a deed? | A written instrument used to transfer ownership of real property. |
| 172 What is required for a deed to be valid in Florida? | Competent parties, legal description, granting clause, and delivery and acceptance. |
| 173 What is a grantor? | The person transferring ownership of property. |
| 174 What is a grantee? | The person receiving ownership of property. |
| 175 What is a legal description? | A precise method of identifying a parcel of real property. |
| 176 What are the three main methods of legal description? | Metes and bounds, government survey, and lot and block. |
| 177 What is metes and bounds? | A legal description using distances, directions, and landmarks. |
| 178 What is the government survey system also called? | Rectangular survey system. |
| 179 What is lot and block legal description? | A description using recorded subdivision maps or plats. |
| 180 What is a general warranty deed? | A deed providing the greatest protection to the grantee. |
| 181 What is a special warranty deed? | A deed warranting title only during the grantor's ownership period. |
| 182 What is a quitclaim deed? | A deed conveying whatever interest the grantor may have without warranties. |
| 183 What is a bargain and sale deed? | A deed implying ownership but offering limited warranties. |
| 184 What is constructive delivery of a deed? | Delivery without physically handing over the document. |
| 185 When does title transfer in Florida? | Upon delivery and acceptance of the deed. |
| 186 What is recording? | Entering documents into public records to provide notice. |
| 187 What is actual notice? | Knowledge obtained directly from facts or observation. |
| 188 What is constructive notice? | Knowledge presumed because documents are publicly recorded. |
| 189 What is chain of title? | The history of ownership transfers for a property. |
| 190 What is title insurance? | Insurance protecting against defects in title. |
| 191 What is a marketable title? | A title free from significant defects or reasonable doubt. |
| 192 What is a cloud on title? | Any claim or encumbrance that may affect ownership rights. |
| 193 What is a title search? | An examination of public records to determine ownership and liens. |
| 194 What is an abstract of title? | A summary of the property's ownership history and recorded documents. |
| 195 What is a suit to quiet title? | A court action used to remove clouds from title. |
| 196 What is an easement? | A right to use another person's land for a specific purpose. |
| 197 What is an easement appurtenant? | An easement benefiting one parcel of land over another parcel. |
| 198 What are the dominant and servient tenements? | The dominant parcel benefits and the servient parcel is burdened. |
| 199 What is an easement in gross? | An easement benefiting a person or company rather than a parcel of land. |
| 200 What is an encroachment? | An unauthorized physical intrusion onto another person's property. |
| 201 What is a license in real estate? | A temporary revocable right to enter another person's property. |
| 202 What is a profit or profit a prendre? | The right to enter land and remove natural resources. |
| 203 What is an easement by necessity? | An easement created when land has no access to a public road. |
| 204 What is a prescriptive easement? | An easement acquired through continuous unauthorized use over time. |
| 205 What is an easement by prescription in Florida similar to? | Adverse possession without ownership rights. |
| 206 What is condemnation? | The government's taking of private property for public use. |
| 207 What is eminent domain? | The power of government to take private property for public use. |
| 208 What is inverse condemnation? | Legal action by an owner when government actions reduce property value. |
| 209 What is police power? | Government authority to regulate for health, safety, and welfare. |
| 210 What is escheat? |
The transfer of property to the state when a person dies without heirs or a will. |
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