CRECI Industry Standards & Ethical Practices 2

Question 1

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

Accepted Answer

Dual agency

Answer

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

Question 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:

Accepted Answer

Immediately withdraw from representation

Answer

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

Question 3

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

Accepted Answer

Full disclosure doctrine

Answer

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.

Question 4

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

Accepted Answer

An escrow or trust account separate from operating funds

Answer

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

Question 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?

Accepted Answer

Only when disclosed to and consented to by the client

Answer

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

(CRECI) Commercial Real Estate Certification Institute Practice Test

(CRECI) Commercial Real Estate Certification Institute Practice Test

CRECI Industry Standards & Ethical Practices 2