Instructor Manual 5th Edition SQC R2.pdf - Greater Syracuse

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© 2013 All rights reserved. 1 INSTRUCTOR’S MANUAL NEW YORK REAL ESTATE FOR SALESPERSONS FIFTH EDITION MARCIA DARVIN SPADA All rights reserved The names of all…
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© 2013 All rights reserved. 1 INSTRUCTOR’S MANUAL NEW YORK REAL ESTATE FOR SALESPERSONS FIFTH EDITION MARCIA DARVIN SPADA All rights reserved The names of all products mentioned herein are used for identification purposes only and may be trademarks or registered trademarks of their respective owners. Cengage Learning disclaims any affiliation, association, connection with, sponsorship, or endorsement by such owners. Contents To the Instructor 1 License Law and Regulations 2 Law of Agency 3 Legal Issues Parts I and II 4 Legal Issues Parts III and IV 5 The Contract of Sale and Leases 6 Real Estate Finance 7 Mortgage Brokerage 8 Real Estate Mathematics 9 Land Use Regulations 10 Municipal Agencies 11 Construction and Environmental Issues 12 Valuation Process and Pricing Properties 13 Human Rights and Fair Housing 14 Property Insurance 15 Taxes and Assessments 16 Condominiums and Cooperatives 17 Commercial and Investment Real Estate 18 Income Tax Issues in Real Estate Transactions © 2013 All rights reserved. 2 19 Property Management TO THE INSTRUCTOR The New York syllabus offers a challenge to both student and instructor. New York Real Estate for Salespersons 5th e is designed to meet this challenge. The To the Student section of the textbook explains how students should approach the textbook. The following offers some ideas that may be useful to the instructor: Using the instructor’s manual  This manual offers a complete outline of all content in the chapter. If you want, you need only to familiarize yourself with the chapter and then teach from the outline.  The manual presents a focus of presentation for each chapter sometimes with suggested  guidelines for time constraints. The focus explanation will help you emphasize the more relevant aspects of each topic.  Each chapter of the manual presents supplemental learning activities. Students do not have these activities (or answers) in their textbook. Use them as needed for more class work or for home study. You may copy the content in the instructor’s manual.  Further math questions are offered in this manual. They are divided and captioned as to where they are applicable in the textbook. Use as needed for classroom or suggested home study.  Two 75-question classroom salesperson exams that are for practice only. Contact the author for state approvable classroom exams. Using the textbook  The textbook provides an interactive learning experience. Although learning activities are included at certain junctures in the chapter; it is still up to the instructor as to where you feel they would best meet the needs of students.  Instructors who begin the course may want to include the introductory chapter that answers many general questions as to a career in real estate.  Many of the activities such as the role playing exercise in the Law of Agency chapter, and the DOS case studies are required by the syllabus. Include these items in your presentation.  The textbook follows the syllabus exactly as to form and content. A thorough presentation of the content will prepare your students for the state licensing exam © 2013 All rights reserved. 3  The sample exam at the end of the textbook will provide diagnostic information as to how students are doing and where they need further study.  All key terms required by the syllabus are contained in the chapter where they are supposed to be addressed as well as in the glossary.  The publisher invites you to address any ideas regarding presentation or learning activities, questions, or concerns regarding the text and syllabus to the author. The author may be contacted through email at cramforexam@hotmail.com. You can also visit the author’s website: http://www.cramforexam.net where you can access up-to-date exam information, more practice exams, and supplemental study content that supports this textbook. Supplemental Study Content  Cram for the Exam! Your Guide to Passing the New York Real Estate Salesperson and Broker Exams. All practice questions and exams in this comprehensive guide are footnoted to New York Real Estate for Salespersons, 5th e.  New York Real Estate for Brokers 5th e by Marcia Darvin Spada. This is the textbook for those who are preparing for the New York broker license and completely covers the syllabus for the required 45-hour broker course.  30-Hour Remedial Course by Marcia Darvin Spada. This companion textbook for the salesperson or broker course is for students who have completed the old salesperson 45-hour course (completed before July 1, 2008) and need to complete the entire 75 hours for the salesperson course or the 120 hours for the broker course.  PowerPoint Presentation. Extensive colorful slides that follow the key points of each chapter.  Classroom exams. These exams are referenced to New York Real Estate for Salespersons, 5th e. These exams created by the author can be submitted for DOS approval. Contact the author to obtain these exams. To order a desk copy of this Cram or any Cengage Learning real estate textbook, contact: Shawna Hershey, National Account Manager, Real Estate & Appraisal Cengage Learning 5191 Natorp Blvd. Mason, OH 45040 Office: 513.229.1796; Fax: 513.229.1031 Email: shawna.hershey@cengage.com To order Cengage textbooks online; go to the Cengage Learning bookstore at cengagebrain.com To view the Cengage Learning online real estate catalogue go to © 2013 All rights reserved. 4 http://www.cengage.com/realestate; and to order textbooks by Marcia Darvin Spada, go to http://cengage.com/realestate/spada. To order any textbooks directly, contact Cengage Learning customer service at (800) 842-3636. © 2013 All rights reserved. 5 CHAPTER 1 LICENSE LAW AND REGULATIONS CLASSROOM HOURS: 3 RATIONALE FOR CHAPTER License law is fundamental to real estate practice in New York. Therefore, it is essential that students have a sound understanding of the statutes, rules, and regulations specific to New York practice. License laws can trace their history to the 1906 Code of Ethics adopted by the National Association of REALTORS®. Today, each state, including New York, has its own separate body of statutes that define and govern the practice of real estate. This framework is outlined in the chapter. FOCUS OF PRESENTATION 1. Introduce the purpose of New York’s license law in general, that is, to protect the public, as opposed to other common ideas such as to regulate competition or illegally establish commission structures. 2. Review the distinction between the broker’s and salesperson’s license both in terms of the requirements for licensure as well as independence of practice. Many students enter the practice at the salesperson level and may aspire to go on to the broker license. If you have not done so already, this is a good opportunity to go over the question and answers presented in the introductory chapter regarding real estate as a career. 3. List the activities that require a real estate license in New York, as well as actions that are specifically exempt. Include a discussion of the rules for proper maintenance of a license. 4. Review the licensure process and particularly the salesperson’s application depicted in the textbook. Explain eAccessNY, the NYS online management system and its services, the licensure exam and the fees involved with licensure. Go online for a copy of the current exam schedule.DOSwebsite:http://www.dos.state.ny.us. Discuss other types of licenses related to real estate. 5. Discuss New York’s rules for supervision of the salesperson by the sponsoring broker. Review the details of the salesperson’s practice that the broker is responsible for supervising (handling of deposit monies, delivery of instruments, etc.) © 2013 All rights reserved. 6 6. Define the regulatory powers of DOS. Take time to review and give examples of those activities that are prohibited by license law. Include a discussion of advertising guidelines and unlicensed assistants. Complete advertising guidelines are from available from DOS. 7. A supplemental learning experience is to provide a copy of the REALTOR® Code of Ethics. Identify how this REALTOR® statute corresponds with New York regulations. LEARNING ACTIVITIES CONTAINED IN CHAPTER 1 Case Studies: synopsis of DOS hearings (2) How Would You Respond? typical scenarios to analyze (2) Key Terms: fill-in sentences (10) Multiple Choice (20) CHAPTER 1 OUTLINE I. CATEGORIES AND RESPONSIBILITIES OF LICENSURE A. three categories of licensure: 1. real estate broker—responsible for activities of sales associates 2. associate broker—broker supervision 3. salesperson—broker supervision B. licensure is required (unless exempt) to transact real estate for another individual and for a fee II. REQUIREMENTS FOR LICENSURE A. New York Department of State (DOS), Division of Licensing Services—regulatory agency B. understanding of English language C. must be U.S. citizens or lawful permanent resident 1. no state residency requirement D. Certificate of Relief from Disabilities if convicted felon E. age: broker—20 years; salesperson—18 years F. salesperson 75 hour qualifying course; broker 120 total qualifying hours 1. high school diploma not required G. All applicants must pass New York exam; online appointment III. DUTIES THAT REQUIRE LICENSURE A. listing B. selling © 2013 All rights reserved. 7 C. purchasing D. real estate exchanging (property, lots or vacant land for investment only) E. leasing and renting F. auction G. tenant relocation H. business sale where real estate is substantial part IV. EXEMPTIONS TO LICENSURE A. individuals, for various governmental agencies B. attorneys admitted to practice in New York 1. need license if they employ salespersons C. Persons acting under court order D. tenant’s associations and not-for-profit corporations E. building superintendent or maintenance worker employed by one owner F. person employed by one owner to transact on their behalf V. SALESPERSON APPLICATION A. most salespersons apply for the license online through their accounts in eAccessNY B. application fee- $50 paid through credit card on eAccessNY account VI. MAINTAINING A LICENSE A. license and pocket card 1. conspicuously display broker license 2. salesperson kept by broker in safe and accessible place 3. pocket cards must be carried at all times—replacement: $10 fee B. change of address, status, or name- most activities performed online through eAccessNY account 1. broker moves principal or branch office—DOS notified within five days C. change status of license 1. associate broker to broker—$150 fee 2. changing salesperson’s name—$50 fee D. fees, branch office requirements, and term of licensure 1. broker—$150; salesperson—$50 fee per two year term 2. branch offices—$150 E. termination or change of association © 2013 All rights reserved. 8 1. broker files salesperson termination with DOS—$10 fee 2. new sponsoring broker must file new association with DOS—$10 fee F. dual licensure—broker/salesperson 1. licensees may hold more than one license at same time 2. associate brokers and salespeople must submit statement to DOS from each sponsoring broker indicating acknowledgment of other license G. renewal requirements 1. renewal application must be signed by sponsoring broker 2. must indicate continuing education status a. continuing education 22 1/2 every two years b. exemptions—brokers licensed for 15 years; attorneys VII. RECIPROCITY A. non-resident salespersons and brokers must pass New York exam and maintain New York office unless state that they are from does not require New York licensees have office in their state or pass their exam 1. New York has arrangements with other states B. requirements for non-resident license 1. current certification from home state 2. New York application with fees 3. Uniform Irrevocable Consent and Designation Form 4. salesperson must be sponsored by New York broker 5. corporations must file with DOS, Division of Corporations, as foreign corporation 6. broker applicants from nonreciprocal states submit Supplement B of application, two character witness statements, New York resident’s reference, licensing requirements from home state, course transcripts VIII. OTHER LICENSES OR REGISTRATION A. apartment information vendor—$400 for 1 year term—DOS B. apartment sharing agent—$400 per year for 1 year term—DOS C. appraisal licensure and certification 1. four levels of licensure: NYS Appraiser Assistant; NYS Licensed Real Estate Appraiser; NYS Certified Residential Appraiser; NYS Certified General Appraiser © 2013 All rights reserved. 9 2. $325 for two-year term—DOS D. NYS licensed home inspector-$250-two year term-DOS IX. REGULATIONS PROMULGATED BY DEPARTMENT OF STATE A. business sign conspicuously posted on outside of place of business or in building directory 1. indicate individual or company is broker B. compensation and fee splitting 1. salespersons receive compensation sponsoring broker only 2. kickbacks—brokers may not share compensation with unlicensed individuals 3. unlicensed individuals may not bring suit C. other violations 1. misstatement in application 2. fraud 3. incompetency 4. misrepresentations 5. mandatory seller property condition disclosure—NY law requires that sellers disclose known defects in the sale of 1- to 4-unit resident property. 6. receiving compensation from more than one party without consent of all parties 7. interference with contract of another broker 8. offering property for sale or lease or placing sign without owner permission 9. failing to deliver duplicate instruments 10. accepting services of salesperson employed by another broker (salesperson may not represent another broker without consent of employing broker) 11. retaining listing information upon termination of association 12. being a party to listing contract that has automatic extension 13. being party to exclusive listing contract which contains automatic continuation of listing beyond termination date 14. drawing legal documents; giving legal advice 15. failing to account for funds belonging to others a. commingling prohibited 16. net listing contract illegal in New York 17. discrimination © 2013 All rights reserved. 10 a. blockbusting 18. failing to provide definitions of difference between exclusive right-to-sell and exclusive agency listing agreements 19. failing to provide list of MLS members D. guidelines on advertisements 1. must indicate that advertiser is broker 2. give name of broker and telephone number a. blind ad E. unlicensed assistants 1. activities including answering phone, taking messages, arranging appointments, assembling documents XI. LIABILITIES AND PENALTIES FOR VIOLATIONS A. Violation of Article 12-A of Real Property law; misdemeanor 1. punishable by fine of up to $1,000 2. and/or imprisonment for not more than one year 3. DOS may reprimand licensee, or deny, revoke, or suspend license for as long as it deems proper 4. all courts of state may hear and try violators B. DOS hearings and appeals 1. DOS investigates complaints and notifies licensee of charge and penalty 2. licensee may request hearing to contest charge and penalty a. voluntary mediation or b. hearing 3. appeal of decision—Article 78 proceeding a. method for appeals against regulatory agencies 4. revocation or suspension of broker’s license suspends licenses of affiliated salespersons and associate brokers 5. If salesperson or broker license revoked, licensee must wait one year for relicensure © 2013 All rights reserved. 11 SUPPLEMENTAL LEARNING ACTIVITIES – Chapter 2 Putting It To Work* Why is it necessary that the real estate broker be paid based upon a set rate which is a percentage of the sales price? Is it because rates are officially set by a government agency? Can’t we make other arrangements such as the payment of a flat fee? *Reprinted by permission of James A. Ader, Administrator, Greater Capital Association of REALTORS®, Inc. and the Albany Times Union, in the column, Real Estate Spotlight. How Would You Respond? Peter has served time in jail more than 20 years ago for a felony he had committed when he was 21 years old. For the past ten years, Peter has worked as construction foreman. Peter’s body feels tired, and he is ready for a “desk job.” Since he has been in the “home” business all these years, he figures that the real estate profession is a perfect career change. What documents would Peter need to become licensed in New York, and assuming that he had the proper documentation, what level of licensure is Peter eligible for? © 2013 All rights reserved. 12 True or False – Chapter 2 1. Salesperson and broker licenses are renewable every year. 2. Attorneys must take qualifying courses to be licensed. 3. Violations of the license law are a felony. 4. Associate broker applicants need not take the broker exam. 5. The fee for a salesperson license is $75. 6. Apartment sharing agents are licensed by the Department of Housing and Community Renewal. 7. Net listings are permissible in certain instances. 8. DOS may impose up to a $1000 fine as a penalty for violation of license law. 9. A broker may share a commission with anyone. 10. You need not have a high school diploma to obtain a real estate license. 11. A real estate broker need not pay DOS fees for any branch offices. 12. A real estate salesperson may be an officer of a real estate brokerage corporation. 13. Nonresident licensees who are salespersons must work under the supervision of a sponsoring broker in New York. 14. DOS charges a $15 fee for the state exam. 15. Commingling refers to socializing with clients. 16. A real estate broker must be at least 21 years old. 17. A real estate salesperson must be at least 20 years old. 18. A real estate salesperson may be exempt from continuing ed. 19. New York never grants reciprocity to out of state licensees. 20. A corporations may obtain a real estate broker license. © 2013 All rights reserved. 13 Multiple Choice – Chapter 2 1. The overall purpose of the license law is to: a. protect the public b. regulate competition and fee structure c. raise revenue d. create a quota of licensee 2. The association that has the primary purpose in exchange of license law information and promotion of uniformity of statutes between states is: a. NAR b. ARELLO c. HUD d. VA/FHA 3. The distinction between broker and salesperson is generally that a: a. broker must be sponsored by another agent b. salesperson can practice independently c. salesperson must be sponsored by a broker d. broker cannot practice independently 4. Which of the following is NOT an exemption to real estate licensure? a. owner of property b. trustee c. attorney d. property manager for more than one owner 5. A broker must present: a. all offers to the seller b. only those offers that appear to be in the best interest of the seller c. only full price offers d. only offers with $1000 earnest money 6. Under what authority does the Department of State derive its authority to regulate the activities of licensees? a. eminent domain b. taxation c. police power d. escheat © 2013 All rights reserved. 14 7. In representing the seller, the real estate agent is authorized to do which functions? a. draft contracts b. provide legal advice c. give tax advice d. show property 8. Roy held himself out to be a REALTOR®, but in fact had no license. He sold a large commercial property to Igor Investor who had promised Roy a $50,000 commission. When Igor discovered that Roy had no license, he decided to only pay him $25,000. Roy refused to accep
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