Practice Test Geeks(CRECI) Commercial Real Estate Certification Institute Practice Test
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Industry Standards & Ethical Practices Flashcards

7 cards from real CRECI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Industry Standards & Ethical Practices flashcards as text

  1. Under CRECI ethical standards, when a commercial broker represents both buyer and seller in the same transaction, this is known as:

    Answer: Dual agency

    Dual agency occurs when the same broker or brokerage represents both parties in a transaction, requiring full disclosure and informed consent.

  2. A commercial real estate professional discovers their client is planning to use a property for an illegal purpose. The ethical course of action is to:

    Answer: Immediately withdraw from representation

    A professional must withdraw from representation if they learn their client intends to use the property for illegal purposes to avoid facilitating unlawful activity.

  3. Which standard requires commercial real estate professionals to disclose all known material facts about a property to prospective buyers?

    Answer: Full disclosure doctrine

    The full disclosure doctrine requires professionals to proactively share all known material facts that could affect a buyer's decision, superseding caveat emptor in professional practice.

  4. CRECI standards require that earnest money deposits in commercial transactions be held in:

    Answer: An escrow or trust account separate from operating funds

    Earnest money must be placed in a separate escrow or trust account to protect client funds and comply with professional standards.

  5. When is it ethically permissible for a commercial broker to accept referral fees from third-party service providers such as inspectors or title companies?

    Answer: Only when disclosed to and consented to by the client

    Referral fees from third parties are permissible only when the client is fully informed and provides consent, preventing undisclosed conflicts of interest.

  6. A commercial real estate professional's duty of confidentiality to a client:

    Answer: Continues indefinitely after the transaction concludes

    The duty of confidentiality survives the transaction and requires professionals to protect client information indefinitely unless authorized to disclose.

  7. Which of the following best describes 'puffery' in commercial real estate marketing?

    Answer: Exaggerated promotional claims not meant as factual statements

    Puffery refers to vague, subjective promotional language ('premier location') that courts typically do not treat as actionable misrepresentation.