1. Under Ohio law, if a vendee under a recorded land installment contract wishes to sell or assign their vendee interest to a third party, which statement best describes the legal requirements under ORC Chapter 5313?
- A. The vendee may freely assign the vendee interest without notifying the vendor, because the vendee's interest is personal property that may be freely transferred
- B. The vendee must obtain written consent from the vendor before any assignment of the vendee's interest is effective under ORC 5313
- C. The vendee's interest may be assigned, but the assignee takes subject to all the conditions of the original contract, and the original vendee typically remains secondarily liable unless expressly released by the vendor ✓
- D. Once the land installment contract is recorded, the vendee's interest automatically converts to a fee simple estate that may be sold without restriction
Under Ohio land installment contract law, a vendee's equitable interest may generally be assigned to a third party, but the assignee takes subject to all terms and conditions of the original contract. Unless the vendor expressly releases the original vendee from liability, the original vendee may remain secondarily obligated on the contract. The vendee does not hold legal title and cannot convey a fee simple estate; recording does not convert the vendee's equitable interest into fee simple ownership.
2. A buyer and seller in Ohio sign a purchase contract containing a clause stating that any earnest money dispute shall be resolved by binding arbitration, and that the broker is authorized to disburse funds in accordance with any arbitration award. The buyer defaults, and an arbitrator awards the earnest money to the seller. Under Ohio law, may the broker disburse based solely on the arbitration award?
- A. Yes, because the contract expressly authorized the broker to disburse in accordance with an arbitration award, which constitutes written direction from both parties. ✓
- B. No, because Ohio law prohibits arbitration clauses in residential real estate purchase contracts.
- C. No, because the broker may only disburse trust funds pursuant to a court order or mutual written consent signed contemporaneously with the disbursement request, not a pre-signed contractual authorization.
- D. Yes, but only if the arbitration was conducted by an arbitrator licensed by the Ohio Division of Real Estate and Professional Licensing.
When both parties have pre-authorized in writing — through a binding contract clause — that the broker shall disburse earnest money in accordance with an arbitration award, that contractual provision constitutes the written direction from both parties that Ohio law requires before a broker may disburse disputed trust funds. An arbitration award pursuant to such a clause provides the broker with clear legal authority to disburse without further written consent at the time of disbursement. Ohio does not prohibit such clauses, and no Division-licensed arbitrator requirement exists.
3. Under Ohio Administrative Code rules applicable to real estate licensees, which of the following best describes a buyer's agent's affirmative duty regarding the Ohio Residential Property Disclosure Form received on behalf of the buyer?
- A. The buyer's agent must review the disclosure form and advise the buyer of any information that may be relevant to the buyer's decision to purchase ✓
- B. The buyer's agent has no duty regarding the seller's disclosure form because it is the seller's legal document
- C. The buyer's agent must independently verify every item on the disclosure form before the buyer may sign the purchase contract
- D. The buyer's agent's only duty is to deliver the form to the buyer; analysis is left entirely to the buyer's attorney
Under Ohio Administrative Code Section 1301:5-1-02 and the duties of a buyer's agent under ORC Chapter 4735, a licensee representing a buyer must promote the buyer's interests, which includes reviewing the disclosure form and advising the buyer about its contents and implications. While the agent is not required to independently verify every item, the agent must use reasonable skill to help the buyer understand what has been disclosed and identify issues warranting further investigation.
4. Under Ohio law, which of the following statements is TRUE about the termination of a seller's agency (listing) agreement before its expiration date?
- A. Either party may terminate the listing agreement at any time without consequence, as Ohio law prohibits penalties for early termination.
- B. The seller may terminate the listing agreement, but the broker may retain rights to compensation if a procuring cause sale occurs within the protection period stated in the agreement. ✓
- C. The broker may unilaterally terminate the listing agreement and immediately transfer it to another brokerage to protect their commission interest.
- D. Once signed, a listing agreement in Ohio is irrevocable until its natural expiration date under ORC Chapter 4735.
Ohio law permits a seller to terminate a listing agreement early, but the agreement typically contains a 'protection period' (also called an extender or carryover clause). If a buyer who was introduced to the property during the listing period purchases it within that protection window after termination, the broker may still be entitled to compensation. Ohio law does not make listing agreements irrevocable, nor does it allow brokers to transfer agreements unilaterally.
5. Under Ohio law, the Superintendent of the Division of Real Estate & Professional Licensing has authority to do which of the following WITHOUT first referring the matter to the Ohio Real Estate Commission?
- A. Revoke a broker's license for a pattern of fraudulent misrepresentation.
- B. Issue a civil penalty against a salesperson for a first-time advertising violation.
- C. Suspend any license for an immediate and serious danger to the public under an emergency adjudication order. ✓
- D. Permanently bar a licensee from reapplication after a second disciplinary offense.
Under ORC 4735.051 and Ohio's administrative procedure framework, the Superintendent may issue an emergency adjudication order to immediately suspend a license when continued licensure poses an immediate and serious danger to the public. This action does not require a prior Commission hearing, though the licensee is entitled to a prompt post-suspension hearing. Revocation, civil penalties, and permanent bars are Commission functions following a formal hearing.