Florida Real Estate Key Terms

Business Broker

a broker who specializes in selling businesses in Florida

Business Opportunity

a real estate transaction involving a business that already exists and includes both tangible and intangible assets

farm area (target market)

a specific area a real estate associate chooses to specialize and become an expert in; aka target market

follow up

the contact a sales associate makes with a buyer or seller after closing a real estate transaction

multiple listing service (MLS)

a database in which local member brokers share listings so that fellow member brokers can procure buyers for those properties

community association manager (CAM)

a type of property manager that manages a community association for properties like condos, co-ops, timeshares, manufactured housing parks, and PUDs

Property managment

the vocation of renting or leasing someone else's real property on their behalf in exchange for compensation and in accordance with a property management employee contract

Property Managment

someone who is hired by a property owner to market, maintain, and oversee the day-to-day operation of a property (usually a rental property)

absentee owner

a property owner who does not occupy the property in question and therefore often utilizes a property manager’s services

appraisal

an official valuation given to a property by a licensed appraiser

appraiser

an individual who is trained and licensed to perform appraisals, which estimate the value of real property

USPAP

an agency charged with overseeing, regulating, and promulgating real estate appraisals and appraisal practices; aka Uniform Standards of Professional Appraisal Practice

Broker Price Opinion (BPO)

a broker’s opinion of the value of a piece of real property, given in writing

Comparative Market Analysis (CMA)

a report that compares the prices of recently sold or listed homes ("comparables") in order to estimate the market value of a similar property (the "subject property") located in the same area

subdivision plat map

the proposed map of a to-be-developed subdivision indicating proposed lots, streets, and other important organizational information, created according to the layout of the existing parcel of real property

dedication

a gift of land to the government for public use, gifted by the property owner

caveat emptor

the concept that a buyer is responsible for verifying the quality and value of the goods prior to the purchase

Different Florida Real Estate Laws and Regulations

broker

a person or business entity who is licensed to represent one of the parties in a real estate transaction in exchange for a commission or other valuable consideration

broker associate

an individual who meets the licensure requirements to be a real estate broker but provides real estate brokerage services as an agent of another broker

sales associate

a real estate license holder who is associated with a licensed broker for the purpose of performing real estate brokerage acts on the broker’s behalf

real estate services

buying, selling, leasing, renting, auctioning, appraising, exchanging, negotiating for, or closing on real property or a business for compensation; advertising that you will do any of the aforementioned

owner-developer

an unlicensed entity that sells, exchanges, or leases its own property

Florida Resident

a person who has resided (regardless of whether the place or base of residence is a recreational vehicle, hotel, rental unit, or any other temporary or permanent situs) in Florida, continuously for a period of 4 calendar months or more, within the preceding one year

prima facie evidence

evidence that in and of itself is sufficient to prove a fact

license

a license is granted when an applicant passes the state exam

registration

registration is the process of submitting information to the DBPR

adjudication withheld

when a court stays the imposition of a sentence and instead puts the defendant on probation

nolo contendere (no contest)

a plea where a defendant does not admit guilt to a crime they are accused of, but do accept punishment as though they have been found guilty

sealing

putting a criminal record under highly restricted access

expungment

removing a criminal record and destroying it

mutual recognition agreement

fee waivers for license

reciprocity and mutual agreement states with florida

• Alabama

• Arkansas

• Connecticut

• Georgia

• Illinois

• Kentucky

• Mississippi

• Nebraska

• Rhode Island

• West Virginia

probation

a period in which a license holder may continue to practice real estate while meeting certain conditions under the supervision of FREC

FREC Members

cease to be in force

describes a license that is not active due to a failure to notify the Florida Real Estate Commission of an important change, such as a change in employer or address

group license

a license that allows a sales associate or broker associate to conduct real estate transactions for multiple entities owned by the same owner-developer

involuntary inactive

describes a license that is inactive due to either a failure to meet renewal requirements or the lack of an employing broker

Difference between multiple licenses and group licenses

Multiple licenses are additional licenses held by a broker who is permitted to serve as the broker for more than one business entity. They are issued to brokers only at the discretion of the FREC. In contrast, group licenses are held by sales associates and broker associates. A group license holder is registered under a single employer, but that employer may be an owner-developer who owns two or more connected businesses for which the licensee can conduct transactions and are awarded by DBPR.

fiduciary

an individual upon whom is placed the highest levels of trust and confidence when acting on behalf of another

principle

in general usage, the client of an agent; in Florida real estate, the client of a single agent operating as a fiduciary; also, the amount borrowed in a loan from which interest is accrued

customer

an individual with whom a license holder has no fiduciary relationship but to whom accounting, honesty and fairness, and disclosure of not readily observable material facts about a property are still required

dual-agent

the role of a licensee in an in-house transaction where the brokerage offers both parties fiduciary level representation; illegal in Florida

subagency

a form of agency that arises when an employing broker enlists the use of sponsored sales associates and/or sponsored associate brokers to accomplish a client's goal

caveat emptor

the concept that a buyer is responsible for verifying the quality and value of the goods prior to the purchase

general agent

an agent who is authorized to manage all of a principal's affairs within certain specified areas; enjoys broader authority than that of a special agent but less than that of a universal agent

special agent

an agent with a limited scope of authority to act on behalf of their principal; usually towards a single, specific objective, end, or goal that is not ongoing

agency relationships within real estate

Agency Classifications

Agency Creation

nonrepresentation

also known as a no brokerage relationship, is one of Florida's three authorized brokerage relationships; used when a buyer or seller of real estate opts out of representation

DAD Duties

limited representation

the degree of representation provided by a transaction broker in Florida; is more than what a party receives with nonrepresentation but less than the fiduciary level representation of a single agent

transaction broker

a broker who provides limited representation to a buyer, a seller, or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent

single agent

a broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction

consent to transition

the disclosure notice the broker must have the client sign before a change in the agency relationship from single agent to transition broker can occur

Fiduciary Duties

Comparing Brokerage Relationship Duties

designated sales associate

sales associates designated by the broker to serve as single agents for the parties in an in-house nonresidential transaction at the request of the parties

residential sale

the sale of improved property of four units or fewer; unimproved property intended for the use of four units or fewer; or agricultural property of 10 acres or fewer

Termination of Agency

TCPA Telephone Consumer Protection Act

CAN SPAM ACT

TCPA vs CAN-SPAM

deposit

a payment made from one party to another that shows a sincerity to fulfill the transaction, aka binder deposit or good-faith deposit

commingle

the illegal act of mixing personal funds with a client’s funds

conversion

a license holder's personal use or misuse of money belonging to others

conflicting demands

opposing, unresolvable demands made by the buyer and seller in a transaction regarding escrowed property disbursement

arbigation

a process whereby the parties to a dispute present their conflict to a disinterested third party and honor the third party’s binding judgment

litigation

the legal process of resolving a dispute in court that involves an interpleader or declaratory judgment

ernest money

funds paid to confirm or commit to a contract

escrow account

accounts that allow for a process in which funds and/or financial documents are held by a disinterested third party on behalf of the other two parties in the real estate transaction until specific conditions are satisfied

escrow disbursement order (EDO)

the FREC’s decision regarding who should receive disputed escrow funds held in a brokerage escrow account

good-faith doubt

a doubt that is honest, honors the business contract, is free of fraudulent motive, and implies an intent to fulfill the contract

interpleader

a court procedure meant to resolve a dispute when a party holds funds they know they do not own, but to which multiple other parties lay claim

failure to account and deliver

the failure to deliver personal property (such as money, legal documents, or commission) to the person entitled to receive it

kickback

a payment made to a licensee for a service unrelated to the real estate transaction or a service that does not fall under the responsibility of the licensee

LLC

a business entity in which parties are protected against personal liability for business debts

Limited Liability Partnership (LLP)

a business entity in which parties are protected from some liabilities while retaining other liabilities

corportation (INC)

a legally created business entity representing the interests of more than one person

general partnership

a business entity consisting of two or more parties in which all co-owners actively share power, responsibilities, and profit

limited partnership

a business entity composed of both general and limited partners where the general partners manage the business and assume most of the risk, while the limited partners are passive investors with limited risk

ostensible partnership

the appearance that a partnership exists between two parties even though no partnership was intentionally created

professional association

two or more individuals who come together as a business corporation to provide a professional service to others

sole proprietorship

ownership of a business by a lone individual

Limited and General Partners

breach of trust

the breaking of a promise or obligation, and can be done through action, omission, default, or nonperformance

moral turpitude

conduct that goes against justice, honesty, good morals, or custom; also depraved, base behavior

concealment

withholding information or a material fact

material fact

a fact that, if known, could cause someone to take a different course of action or make a different decision regarding the property to be purchased

misrepresentation

a statement, written or spoken, that is false or misleading

culpable negligence

negligent conduct that is not intentional but involves a disregard of the consequences that will likely result

failure to account or deliver

the failure to deliver personal property (such as money, legal documents, or commission) to the person entitled to receive it

legally sufficient

contains ultimate facts about an alleged violation; one of two criteria for a complaint to be investigated

summary/emergency suspension order

issued when the serious nature of a violation justifies suspending a license holder prior to their hearing

Complaint Flow Chart

probable cause

reasonable grounds for prosecution

formal administration complaint

contains allegations of fact against a licensee; filed if probable cause is found

stipulation

a settlement between parties as to the facts of the case and the penalty reached; must be approved by FREC to be effective