What is not essential to the creation of an agency relationship?

Which of the following is not a possible agency relationship?

Agent for themselves.

An agent is a person who acts on behalf of another. Thus, an agent cannot be an agent for themselves. Here, they are a principal acting for their own account.

In 1968, the U.S. Supreme Court barred all racial discrimination in the sale or rental of property. A person discriminated against should ____

file a civil action in federal court.

The U.S. Supreme Court has a federal jurisdiction. The action would thus be heard in a federal court.

When a deed includes the racial identity of the parties, it can be rewritten under which of the following circumstances ____

by court order.

Altering an existing signed document can never be done without serious legal consideration. Of the answer selections, “by court order” is the only one that addresses a court order.

The Real Estate Law is part of ____

the Business and Professions Code.

The Real Estate Law is located in a specific state code. Not all real estate companies are corporations, so it would not be reasonable for the law to come from the Corporations Code. The Statute of Limitations has to do with time limits before which action need to be taken. Real estate brokerage is considered a profession, and thus is controlled under the Business and Professions Code.

When approached by members of minority groups who want to be shown property, a real estate salesperson avoids showing the buyers property in integrated areas. This would be an example of ____

steering.

Redlining is the refusal to make loans or issue insurance in a neighborhood. Blockbusting is related to listing efforts. Also known as panic selling, blockbusting occurs when an owner is warned about demographic changes in the neighborhood. Steering refers to the discriminatory practice of restricting the rental or ownership of a property to a specific class of people to perpetuate segregated housing.

An agency relationship would not be created by ____

subrogation.

Subrogation is the substitution of one person for another. Therefore, it would not create an agency relationship whereas all of the others are possible.

Which of the following is not a recognized purpose of the Equal Credit Opportunity Act?

Regulating the printing or publishing of an advertisement for the sale or rental of residential property that indicates a wrongful discriminatory preference.

In all 3 other options, each reference the stated goals of the Equal Credit Opportunity Act. However, the printing or publishing of an advertisement for the sale or rental of residential property that indicates a wrongful discriminatory preference is a violation of the Federal Fair Housing Act (FFHA) .

A buyer’s agent prepared a purchase offer on a home for their buyer. When should the agent give the buyer the Agency Law Disclosure form?

As soon as practicable.

The Agency Law Disclosure is to be made as early as practical, but always before the principal signs any contract.

The Real Estate Commissioner is authorized to ____

promulgate rules and regulations to enforce the California real estate laws.

The chief officer of the Department of Real Estate (DRE) is the Real Estate Commissioner. The Real Estate Commissioner’s principal responsibility is to enforce all the real estate laws pertaining to real estate practice, licensing and the Subdivided Lands Act.

Who may withdraw money from a trust fund?

Any authorized employee of the broker.

The broker is required to name the employee who is authorized to withdraw trust funds. The authorized party need not be licensed.

A property owner tells the broker that the house is connected to the sewer. The broker relays this information to the buyer, who later finds that the house has septic system in need of repair. The buyer would sue ____

the broker and the owner.

In this instance, the buyer includes the owner in the suit as they are required to disclose a septic system on the Transfer Disclosure Statement (TDS) . The broker is also named since they failed in their due diligence to be aware of the septic system.

If a real estate broker fires a salesperson for an illegal act, the broker should inform the Real Estate Commissioner of the firing ____

Immediately in writing. It is unconditionally required.

Informing the Department of Real Estate (DRE) of an agent’s illegal activity is an unconditional requirement. Therefore, none of the other choices can be correct.

When a broker or their agent, acting on behalf of a client, has a competing professional or personal bias which hinders their ability to unreservedly fulfill the fiduciary duty they have undertaken, this is referred to as a (n) ____

conflict of interest.

A personal bias suggests a conflict of interest. The other choices would be inappropriate to the question. Agency, whether dual agency or subagency, would imply a relationship with the client as opposed to some personal or professional conflict.

A property owner suffers a loss because of the fraudulent misrepresentation of a broker. The owner is advised to first ____

sue the broker for damages.

When a principal feels there is a grievance with a broker, they need to first pursue the broker for damages. If unsuccessful in collecting after prevailing in court, they can then submit the judgment to the Recovery Fund for payment.

Commingling means the opposite of ____

separation.

Commingling is nearly identical to the meaning of the word mixing. Therefore, separation would be its opposite.

What is not essential to the creation of an agency relationship?

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