Question
nnnnWhich of the following acts by a real estate broker would not be a violation of the real estate law?
nnnnSelections
nnnnA. Taking a net listing
nnnnB. Failure to put a definite termination date in an exclusive listing
nnnnC. Failure to give a copy of the contract to the person who signed it at the time they sign
nnnnD. Taking an option on a property and collecting a commission on that option
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Answer: A
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5 Keys Summary
nnnn• Taking a Net Listing is generally not a violation of Real Estate Law in California, provided the broker adheres strictly to disclosure rules.
nnnn• To avoid a violation, the broker must provide the seller with a full disclosure of all material facts, including the property’s value and the precise amount of compensation (profit) the broker will receive from the sale, and obtain consent.
nnnn• Conversely, the failure to put a definite termination date in an exclusive listing agreement is explicitly listed as a grounds for disciplinary action against a broker’s license.
nnnn• Failure to deliver a copy of the contract to the person signing it at the time it is signed is a direct violation of the Real Estate Law.
nnnn• A broker taking an option on a property while listing it (listing-option) and collecting a commission or profit requires full disclosure of the profit amount and written consent from the principal before the option is exercised; failure to do so constitutes a secret profit violation.
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