The advertisement is a "blind ad" and violates Pennsylvania Real Estate Commission regulations. According to these rules, any advertisement placed by a salesperson or associate broker must contain the business name and telephone number of their employing broker as it appears on the broker's license. The provided ad lists the salesperson's name, John Doe, but completely omits the name of the brokerage, ABC Realty, which is a clear violation.

A. No address is given.

Pennsylvania law does not mandate that a specific property address be included in every real estate advertisement.

B. The salesperson's name appears in the ad.

It is permissible for a salesperson's name to be in an ad, but the employing broker's name must also be included and be more prominent.

D. The MLS number is not included in the ad.

There is no state-level requirement under the Pennsylvania Real Estate Licensing and Registration Act (RELRA) to include an MLS number in advertisements.

1. Pennsylvania Code, Title 49, Chapter 35, § 35.305. Business name on advertisements.

Section (b): "An advertisement by a salesperson or associate broker shall contain the business name and telephone number of the employing broker. The name and telephone number of the employing broker shall be given greater prominence in the advertisement than the name and telephone number of the employee." This directly supports that the broker's name (ABC Realty) is required, making its omission a violation.

2. Pennsylvania Real Estate Licensing and Registration Act (RELRA), 63 P.S. § 455.604. Prohibited acts.

Section (a)(6): This section prohibits "Placing a 'for sale' or 'for rent' sign on or advertising any property without the written consent of the owner..." While not the primary violation here, the body of advertising law under RELRA is built on clear disclosure, and a blind ad fails this principle by obscuring the responsible broker. The specific rule is found in the Commission's regulations (Title 49).

3. Real Estate Education and Community Housing (REECH) Program, Temple University. Course materials for Pennsylvania Real Estate Salesperson licensing frequently cite the prohibition of blind ads as a key regulatory point.

Module on Real Estate Advertising: "All advertising must be done under the direct supervision of the broker and must include the broker's business name and phone number as registered with the Commission. Failure to include the broker's name constitutes a prohibited blind ad." This aligns with the reasoning for selecting option C.

The minimum number of continuing education (CE) hours required for a real estate licensee varies by jurisdiction. However, a common standard, as exemplified by the Pennsylvania Real Estate Commission, is 14 hours. This requirement must be completed during each two-year renewal period. The purpose of CE is to ensure that licensees maintain and enhance their professional competence, stay current with changes in laws and regulations, and uphold public trust. These hours typically include mandatory topics on ethics and legal updates, as well as elective courses relevant to the practice of real estate.

A. 10: This number of hours is insufficient to meet the standard biennial CE requirement in many jurisdictions that mandate 14 hours for license renewal.

B. 12: This is not the standard minimum requirement in jurisdictions like Pennsylvania, which explicitly mandates 14 hours of approved continuing education.

D. 16: This exceeds the specified minimum requirement. While a licensee may take more than the minimum, 16 is not the mandated number of hours.

1. Pennsylvania Code, Title 49, Chapter 35, Subchapter E. § 35.384. Continuing education. This official state regulation specifies the requirement. It states, "A salesperson or broker licensee shall, as a condition of biennial renewal of a license, complete 14 hours of Commission-approved continuing education."

Source: Pennsylvania State Real Estate Commission, official state regulations.

2. Temple University, Real Estate Institute. Course materials for real estate licensing and continuing education frequently cite the state-mandated requirements. The curriculum for Pennsylvania license renewal is built around the 14-hour CE requirement established by the State Real Estate Commission.

Source: Temple University, Real Estate Institute Course Catalog, Continuing Education section.

3. Florida Statutes, Title XXXII, Chapter 475.182. This is another example of a primary legal source from a major state establishing the 14-hour standard. The statute requires, "The commission shall... require a licensee to complete at least 14 classroom hours of instruction... during each license renewal period."

Source: The 2023 Florida Statutes, Chapter 475, Part I - Real Estate Brokers, Sales Associates, and Schools.

According to fundamental principles of agency law and real estate regulations, a licensee cannot act on behalf of a principal (the property owner) without express authority. Before advertising, showing, or offering a property, the licensee must obtain authorization from the owner. This is typically accomplished through a legally binding listing agreement, which establishes the agency relationship and outlines the scope of the licensee's authority to market the property and represent the seller's interests. Acting without this permission constitutes a violation of licensing law and fiduciary duties.

A. Prepare a preliminary appraisal of the property.

A formal appraisal must be done by a licensed appraiser. A licensee prepares a market analysis, not an appraisal, and it is not a legal prerequisite for advertising.

C. Provide a list of clients for whom she has successfully completed real estate transactions in the area.

This is a marketing tool to secure a listing from a potential seller, not a legal requirement before advertising a property for which a listing has been secured.

D. Prepare a comparative market analysis for the property.

While a comparative market analysis (CMA) is a standard practice to help the seller determine a listing price, the essential legal requirement before marketing can begin is the owner's authorization.

1. Ling, D. C., & Archer, W. R. (2018). Real Estate Principles: A Value Approach (6th ed.). McGraw-Hill Education.

Chapter 11, "Listing Contracts," Section 11.1: This chapter explicitly states that a listing contract is an agreement that creates an agency relationship between a property owner and a broker, empowering the broker to market the property on the owner's behalf. It clarifies that this authorization is the foundational step before any marketing activities can commence.

2. Galaty, F. W., Allaway, W. J., & Kyle, R. C. (2022). Modern Real Estate Practice (21st ed.). DF Institute, Inc.

Chapter 10, "Real Estate Brokerage and Law of Agency," Section on "Authority": This section details that an agent's authority to act is granted by the principal. It specifies that a real estate licensee may not offer property for sale or advertise it without the owner's consent, typically in the form of a written listing agreement.

3. University of Texas at Austin, McCombs School of Business. (n.d.). Courseware for RE 358: Real Estate Law.

Module on "Agency and Brokerage": The course materials emphasize that a broker's authority to sell property is not inherent and must be expressly granted by the property owner. Any advertisement or offer made without such authority is legally invalid and a violation of state licensing regulations. The creation of the agency relationship via a listing agreement is presented as the critical prerequisite.

Under Pennsylvania law, a real estate licensee selling their own property must disclose their licensed status. This requirement stems from the duty of honesty and the prevention of misrepresentation. By stating in all advertisements that the owner is a real estate licensee, the salesperson ensures transparency from the initial point of contact with the public. This disclosure prevents any potential for misleading consumers and makes it clear that the seller is a trained professional with a personal financial interest in the transaction, a key principle upheld by the State Real Estate Commission.

A. list the property with their firm: Pennsylvania law does not compel a licensee to list their personal property with their employing broker; this would be a matter of the broker's internal policy, not state law.

C. offer a sales commission or fee to cooperating brokers: Offering compensation to other brokers is a common business practice to attract buyers but is not a legal requirement for a licensee selling their own property.

D. have an active license: While the individual must have an active license to be considered a "salesperson," this describes their status, not the specific disclosure action legally required during the sale process.

1. Pennsylvania State Real Estate Commission Rules and Regulations, 49 Pa. Code § 35.304. Disclosure of interest. This regulation states: "A licensee may not participate in a real estate transaction involving property in which he has an ownership interest unless he first discloses his interest in writing to all parties." While the rule specifies disclosure to "all parties," its application is interpreted to include advertising to ensure transparency from the outset.

2. Pennsylvania Real Estate Licensing and Registration Act, 63 P.S. § 455.604(a)(18). This section on Prohibited Acts forbids "Making any representation in any... advertisement... that is false, deceptive, or misleading." Advertising a property for sale by owner without disclosing that the owner is a licensee could be deemed misleading by omission, as the public is not aware they are dealing with a professional.

3. Pannabecker, F., & Finkelstein, M. (2022). Modern Real Estate Practice in Pennsylvania (14th ed.). Dearborn Real Estate Education. As used in university and college real estate licensing programs, this text clarifies the application of state law. Chapter 10, "The Real Estate Business," explains that when licensees buy or sell their own property, they must disclose their license status at the first contact, which includes advertising. This is a standard interpretation of the disclosure and anti-deception rules.

Real estate licensing laws universally mandate that a salesperson can only receive compensation for licensed activities from their sponsoring broker. The agency agreement and the right to a commission belong to the brokerage, not the individual salesperson. Accepting payment directly from a client, even if the broker was fired, constitutes a violation of these laws. The proper procedure is for any earned fees to be paid to the broker, who then compensates the salesperson according to their independent contractor agreement.

B. The owner cannot unilaterally cancel the sales contract with the buyer; this option incorrectly confuses the listing agreement with the purchase agreement.

C. This is legally false. Accepting direct payment from a client is a common and serious violation of real estate licensing regulations.

D. Even with the broker's consent, the legal flow of funds requires payment to be made to the brokerage first, not directly to the salesperson.

1. Galaty, F. W., Allaway, W. J., & Kyle, R. C. (2022). Modern Real Estate Practice (21st ed.). DF Institute, Inc. In Chapter 5, "Real Estate Brokerage," the section on "Sales Associate Compensation" specifies that a sales associate's compensation is paid by their employing broker. It states, "The amount of a sales associate's compensation is set by mutual agreement between the broker and the sales associate... A sales associate may not receive compensation from any person other than that broker." (p. 78).

2. Jennings, M. M. (2017). Real Estate Law (11th ed.). Cengage Learning. Chapter 7, "The Broker's Role and Commission," clarifies that the listing agreement is a contract between the seller and the broker. It states, "Agents working for brokers cannot be paid directly by the parties to the transaction; they must be paid by their brokers." (p. 215).

3. University of North Texas, College of Business. Course: REAL 2100 - Principles of Real Estate. Course materials on "Agency and Brokerage" emphasize that the broker is the agent of the principal (client), and the salesperson is an agent of the broker. All commissions are paid to the broker, who then distributes the salesperson's share. This structure is a cornerstone of brokerage supervision and liability.

A licensed real estate salesperson is legally required to work under the supervision of a licensed broker. All compensation related to real estate activities, including commissions and bonuses, must be paid by the client (e.g., seller) to the brokerage firm. The supervising broker then pays the salesperson their agreed-upon share. This structure ensures regulatory compliance, proper accounting, and adherence to agency law. A salesperson cannot legally receive compensation directly from a client or another licensee.

A. Salespersons are prohibited from receiving compensation directly from any party to a transaction; all funds must first be paid to their supervising broker.

B. Any referral fees must be paid from one broker to another broker, who then compensates their respective salesperson. Direct salesperson-to-salesperson payments are not permitted.

D. While licensees can agree to split commissions, the funds must be disbursed through their respective brokers, not paid directly between the salespersons.

1. California Department of Real Estate. (2023). Reference Book - A Real Estate Guide. Chapter 16, "Operation of a Real Estate Broker's Office," Section: Salesperson's Compensation. The guide states, "A real estate salesperson...cannot...accept compensation from any person other than the broker under whom he or she is licensed." This directly supports the principle that all payments must flow through the broker.

2. Jennings, M. M. (2017). Real Estate Law (11th ed.). Cengage Learning. Chapter 5, "The Real Estate Brokerage and Listing Agreements," Section 5-3d, "Who Receives the Commission." This university textbook clarifies that the commission is technically earned by and paid to the brokerage entity (the broker), which then compensates the salesperson according to their employment or independent contractor agreement.

3. Floyd, C. F., & Allen, M. T. (2018). Real Estate Principles (11th ed.). Dearborn Real Estate Education. Chapter 5, "Real Estate Brokerage," Section: "Compensation." This text explains the legal and practical framework where commissions are paid to the sponsoring broker, who is legally responsible for the transaction and for compensating the affiliated salespersons.

When a payment is made from the Real Estate Recovery Fund to satisfy a judgment against a licensee, the license is automatically suspended by law. This is a mandatory disciplinary action, not a voluntary status change. The purpose of the suspension is to protect the public from a licensee who has been found liable for fraudulent or dishonest dealings. The license remains suspended until the licensee has repaid the fund in full, including interest, and has met any other requirements for reinstatement imposed by the state's real estate commission.

A. Active: The license is not active. A payment from the Recovery Fund signifies a serious offense, triggering immediate and automatic disciplinary action.

B. Inactive: An inactive status is generally a voluntary choice by a licensee who is not currently practicing but wishes to maintain their license, not a disciplinary penalty.

C. Reinstated: Reinstatement is the process of restoring a license after a period of suspension, once all conditions, such as repayment to the fund, have been met.

1. Texas A&M University, Real Estate Center. (2023). TRELA Update: Changes to the Real Estate License Act. In the discussion of the Real Estate Recovery Trust Account, it is clarified that under §1101.613 of the Texas Real Estate License Act, a license is automatically suspended upon payment from the account on behalf of a license holder. (See Texas Occupations Code, Chapter 1101, Subchapter M, Sec. 1101.613).

2. California Department of Real Estate. (2023). Real Estate Law. Sacramento, CA. California Business and Professions Code §10475(a) explicitly states: "If the commissioner pays from the Recovery Account any amount in settlement of a claim or toward satisfaction of a judgment against a licensee, the license of the licensee shall be automatically suspended upon the date of payment from the Recovery Account."

3. Florida Statutes, Title XXXII, Chapter 475. (2023). Real Estate Brokers, Sales Associates, Schools, and Appraisers. Section 475.484(3) mandates: "Upon the payment of any amount from the Real Estate Recovery Fund in settlement of a claim or toward satisfaction of a judgment against a licensee, the license of the licensee shall be automatically suspended upon the date of payment from the fund." This is a primary legal source often referenced in university real estate law courses.

The Pennsylvania Real Estate Licensing and Registration Act (RELRA) and the Pennsylvania Real Estate Commission's regulations mandate the use of the "Consumer Notice." This notice explicitly outlines the five permitted business relationships a licensee can have with a consumer. These are: Seller Agent, Buyer Agent, Dual Agent, Designated Agent, and Transaction Licensee. The notice is designed to inform consumers of these options at the initial interview so they can make an informed decision about representation.

A. "Rental agent" is a description of a licensee's specialization, not a formal business relationship defined by RELRA in the same category as the others.

B. While sub-agency exists, it is not listed as one of the primary, distinct business relationships that must be disclosed on the mandatory Consumer Notice.

D. This option incorrectly uses the term "designated dual agent" and omits "Dual Agent" as a standalone relationship type, both of which are defined separately in the regulations.

1. Pennsylvania Code, Title 49, Chapter 35, § 35.336. Disclosure summary for the purchase or sale of residential or commercial real estate or for the lease of residential or commercial real estate when the licensee is working on behalf of the tenant. This section mandates the specific content of the Consumer Notice, which explicitly lists Seller Agent, Buyer Agent, Dual Agent, Designated Agent, and Transaction Licensee as the business relationships.

2. The Pennsylvania Real Estate Licensing and Registration Act (RELRA), 63 P.S. § 455.606a. Duties of licensee generally. This act establishes the legal foundation for the different types of agency relationships and the non-agency Transaction Licensee role, which are then summarized in the Consumer Notice.

3. Pennsylvania State Real Estate Commission. (2019). Consumer Notice - For the Purchase or Sale of Residential or Commercial Real Estate (Form No. 4503). The official, state-sanctioned form itself serves as a primary source, listing these five relationships directly under the "BUSINESS RELATIONSHIP WITH A REAL ESTATE BROKER" section.

The disposition of any interest earned on funds held in an escrow or trust account is governed by the contractual agreement between the principals of the transaction, typically the buyer and seller. The purchase agreement or a separate escrow agreement should explicitly state who is entitled to the interest. A broker, acting as a fiduciary, holds the funds in trust and cannot benefit from them by claiming the interest unless all parties provide express written consent. In the absence of an agreement, state laws may dictate the outcome, but the primary determinant is the mutual agreement of the parties.

A. The broker is a fiduciary and cannot personally profit from client funds without explicit agreement; doing so would be the illegal act of conversion.

B. While the buyer and seller are the principals, there is no default rule for an equal split; the distribution is determined by their specific agreement.

C. Brokers are agents, not the owners of the funds, and therefore have no inherent right to any interest earned on the principals' money.

1. California Department of Real Estate. (2020). Real Estate Reference Book. Chapter 10: Trust Funds, p. 218.

Quote/Paraphrase: The text explicitly states, "The purchase agreement offer should specify the party to be credited with any interest earned... A broker may not receive any interest from a trust fund account without the express written consent of the owner of the funds." This directly supports that the disposition is subject to an agreement.

2. Jennings, M. M. (2017). Real Estate Law (11th ed.). Cengage Learning. Chapter 10: The Agency Relationship in Real Estate, Section on "Duty of Accounting".

Quote/Paraphrase: This university textbook explains the broker's fiduciary duty to account for all funds entrusted to them. This duty extends to any interest accrued on those funds. The funds and their earnings belong to the principals, and their distribution must be handled according to the contract and state law, not for the broker's benefit.

3. Floyd, C. F., & Allen, M. T. (2018). Real Estate Principles (11th ed.). Dearborn Real Estate Education. Chapter 11: Real Estate Brokerage and Management.

Quote/Paraphrase: This text, commonly used in university real estate programs, clarifies that earnest money deposits must be placed in a separate trust account. It emphasizes that state laws and the terms of the purchase contract dictate how these funds, including any interest, are handled. It reinforces that brokers cannot commingle or convert these funds for their own use.

Under the Pennsylvania Real Estate Licensing and Registration Act (RELRA), the Real Estate Commission is tasked with investigating complaints against its licensees. Upon receipt of a written complaint, the Commission's legal duty is to first investigate the allegations to "ascertain the facts." If this preliminary investigation indicates a potential violation of the Act, the Commission is then empowered to schedule and conduct a formal hearing to allow the licensee to respond to the charges before any disciplinary action is taken. This procedure ensures due process.

A. License suspension is a potential penalty that can only be imposed after a formal hearing and a finding of guilt, not as an initial step.

C. A cease and desist order is a specific remedy, primarily used to stop unlicensed individuals from practicing real estate, not the standard procedure for every complaint against a licensee.

D. The Commission has its own statutory authority and jurisdiction to investigate and discipline licensees; it does not transfer these matters to local civil authorities.

1. Pennsylvania Real Estate Licensing and Registration Act (RELRA), 63 P.S. § 455.604(a). This section outlines the Commission's power to take disciplinary action, which is predicated on a finding of fact. It states, "...where the commission finds by a preponderance of the evidence...the commission shall have the power to...suspend or revoke a license..." This implies an investigation and hearing process must first occur to establish the evidence.

2. Pennsylvania Code, Title 49, Chapter 35, § 35.321 (Complaints). This regulation specifies the procedure upon receiving a complaint: "The Commission's prosecuting attorney will investigate complaints made to the Commission which present a cognizable claim of a violation of the act or this chapter." This directly supports the "ascertain the facts" step.

3. Pennsylvania Code, Title 49, Chapter 35, § 35.324 (Hearings). This section details the formal hearing process that follows an investigation if formal action is deemed necessary, stating, "If it is determined that a formal hearing is warranted, a citation or an order to show cause will be issued..." This confirms that a hearing is the step taken when warranted by the facts.