Retake Recovery Practice Set Preview

1. A.Guarantee the commissions owed to affiliated licensees
2. B.Supervise the affiliated licensees and their activities
3. C.Hold the firm's trust funds in an account in her own name
4. D.Personally handle every transaction the firm lists or sells

Why each choice works or fails

• A. Misconception: the broker is a guarantor of splits. Compensation is set by written agreement and depends on the deal closing.
• B. Correct. The qualifying broker answers for supervising the firm's affiliated licensees.
• C. Misconception: trust money belongs to the broker. Trust funds go in a designated firm trust account, never a personal one.
• D. Misconception: supervision means doing every deal. Affiliated licensees handle transactions under the broker's supervision.

Rule to remember: The qualifying broker qualifies the firm's license and is responsible for supervising its affiliated licensees.

1. A.Immediately, because the seller has signed and delivered the deed
2. B.Only once the lender's wire lands in the escrow account
3. C.Only after the deed is recorded and returned by the clerk
4. D.Only after a three-day waiting period that applies to all sales

Why each choice works or fails

• A. Misconception: signing equals funding. The attorney cannot pay out money the account does not yet hold.
• B. Correct. Disbursement follows receipt of good (collected) funds, such as a completed wire, in the escrow account.
• C. Misconception: recording comes first. Recording commonly follows disbursement and is not a precondition to paying the seller.
• D. Misconception: blending the Closing Disclosure timing or refinance rescission rules into sales. No general three-day wait applies.

Rule to remember: A Georgia settlement agent may disburse closing proceeds only after good (collected) funds are in its escrow account.

1. A.Only if the tenant agrees to amend the lease
2. B.After giving the tenant 60 days' written notice
3. C.Immediately, to pass through the tax increase
4. D.Once the tenant has paid rent late

Why each choice works or fails

• A. Correct. The lease fixes the rent for its term, so a mid-term change needs the tenant's agreement.
• B. Misconception: borrowing the 60-day notice that ends a tenancy at will. Notice cannot rewrite a fixed-term lease.
• C. Misconception: higher costs pass through automatically. Only an escalation clause allows that, and this lease has none.
• D. Misconception: a late payment frees the landlord. Late rent triggers default remedies, not a right to raise rent.

Rule to remember: Rent in a fixed-term lease stays as written for the term unless the lease allows a change or the tenant agrees.

1. A.Provide the names of several attorneys and let the buyer choose
2. B.Tell the buyer no attorney is needed for a cash purchase
3. C.Prepare the deed and closing documents to save the buyer money
4. D.Require the firm's preferred attorney as a condition of the sale

Why each choice works or fails

• A. Correct. Offering options and letting the client choose is appropriate.
• B. The attorney-closing requirement is not limited to financed purchases.
• C. Preparing deeds and closing documents is the practice of law, which a licensee may not do.
• D. Conditioning the sale on a particular provider improperly removes the buyer's choice.

Rule to remember: Georgia closings are run by attorneys; an agent may suggest several and let the client choose, but may not draft closing documents.

1. A.Obtain an unsatisfied court judgment against the licensee
2. B.Exhaust the licensee's errors and omissions policy
3. C.Prove the licensee has been criminally convicted
4. D.File a complaint with the Commission and wait 30 days

Why each choice works or fails

• A. Correct. An unsatisfied court judgment against the licensee is the gateway to a fund claim.
• B. Misconception: the fund acts as excess insurance. Recovery is keyed to an unsatisfied judgment, not to private coverage.
• C. Misconception: the fund pays only for crimes. A civil judgment for a violation is enough; no conviction is needed.
• D. Misconception: a GREC complaint opens the fund. A complaint can lead to discipline, not compensation.

Rule to remember: The Recovery Fund pays only on an unsatisfied court judgment against a licensee, after collection efforts fail.

1. A.A court order authorizing the sale before it may be advertised
2. B.Conducting the sale on the first Tuesday of the month during legal sale hours
3. C.Giving the debtor the prescribed notice at least 30 days before the sale date
4. D.Publication of the notice of sale in the county's legal organ once a week for four weeks before the sale

Why each choice works or fails

• A. No court order is needed; the power of sale supplies the authority.
• B. Sales follow sheriff's-sale timing: the first Tuesday of the month during legal sale hours.
• C. The creditor must give the prescribed notice at least 30 days before the proposed sale. Proper mailing completes notice on the official postmark date.
• D. The notice runs in the county legal organ once a week for the four weeks before the sale.

Rule to remember: Georgia power-of-sale foreclosure requires statutory notice, four weeks of publication, and a first-Tuesday sale, but no court order.

1. A.$228.00
2. B.$684.00
3. C.$285.00
4. D.$2,850.00

Why each choice works or fails

• A. Wrong. $228.00 uses the loan amount as the base.
• B. Wrong. $684.00 is the intangible recording tax on the $228,000 note.
• C. Correct. $1 + 2,840 x $0.10 = $285.00.
• D. Wrong. $2,850.00 moves the decimal, charging $10 per $1,000.

Work it through

1. $285,000 - $1,000 = $284,000
2. $284,000 / $100 = 2,840 units x $0.10 = $284.00
3. $1.00 + $284.00 = $285.00

Rule to remember: Transfer tax follows the price ($1 first $1,000, $0.10 per added $100). Intangible tax follows the loan.

1. A.Mortgage
2. B.Deed of trust
3. C.Security deed
4. D.Land contract

Why each choice works or fails

• A. A Georgia mortgage creates a lien rather than making the legal-title conveyance described.
• B. A deed of trust uses a third-party trustee; this question expressly excludes one.
• C. Correct. Georgia uses the security deed (deed to secure debt).
• D. Wrong. A land contract is seller financing where the seller keeps title, not a lender's security instrument.

Rule to remember: A Georgia security deed conveys legal title as security for the debt; a Georgia mortgage creates a lien.

1. A.Say it is unnecessary because the lender's policy protects the buyer
2. B.Promise that the policy will cover any title defect that arises
3. C.Explain the option and refer coverage questions to the closing attorney
4. D.Stay silent, since title insurance is outside brokerage duties

Why each choice works or fails

• A. Misconception: one policy covers both. The lender's policy protects the lender's loan, not the buyer's equity.
• B. Misconception: title insurance covers everything. Policies carry exclusions and exceptions, and an agent cannot promise coverage.
• C. Correct. Raise the option, then send coverage questions to the closing attorney or title insurer.
• D. Misconception: title is outside the agent's lane. Silence about a material protection is a failure of diligence.

Rule to remember: A lender's title policy protects only the lender; the owner's policy is optional and protects the buyer.

1. A.Permitted, because the full deposit stays in the account
2. B.Permitted, if the broker discloses the interest at closing
3. C.A violation, because the parties never agreed in writing
4. D.A violation only if the interest exceeds $100 a year

Why each choice works or fails

• A. Misconception: only the principal matters. An intact deposit does not make the interest the broker's to keep.
• B. Misconception: after-the-fact disclosure cures it. The written agreement on interest must come before the deposit.
• C. Correct. The parties must agree in writing who receives the interest before the broker deposits into an interest-bearing account.
• D. Misconception: small amounts are excused. No dollar threshold excuses keeping interest without a written agreement.

Rule to remember: Interest-bearing trust account: get the parties' written agreement on who gets the interest before depositing.