Arkansas Real Estate License License Law and Disclosures Questions and Answers

Question 1

An active Arkansas real estate agent decides to purchase an investment property for themselves. The property is listed for sale by owner (FSBO). What is the agent's primary disclosure obligation in this situation according to Arkansas law?

Accepted Answer

Disclose their licensed status to the seller in writing before or at the time of signing the purchase offer.

Answer

AREC Regulation 10.11 requires licensees to make a full written disclosure of the fact they are a licensed agent when they are a principal party (buyer or seller) in a transaction. This disclosure must be made before a contract is entered into.

Question 2

For how long must a principal broker in Arkansas maintain complete records of their real estate transactions, including trust account files and closing statements?

Accepted Answer

Three years from the date of the transaction.

Answer

According to Arkansas Code of Rules § 220-1006, principal brokers must maintain complete records of all real estate business, including transaction files and property management records, for a period of three years.

Question 3

A new salesperson at a brokerage, eager to make a sale, significantly exaggerates the potential for commercial rezoning of a residential property to a potential buyer. The principal broker was unaware of this specific conversation. If the buyer files a complaint with the AREC, who is ultimately responsible?

Accepted Answer

Both the salesperson for making the misrepresentation and the principal broker for failure to adequately supervise.

Answer

While the salesperson is directly responsible for their misrepresentation, Arkansas law holds the principal broker responsible for exercising strict and adequate supervision over the activities of their associated licensees. Failure to do so is a violation, meaning both parties can be subject to disciplinary action.

Question 4

Which of the following is a requirement for a principal broker's real estate office in Arkansas?

Accepted Answer

A sign must be permanently attached and easily visible, identifying the location as a real estate office.

Answer

Arkansas law requires that every principal broker maintain a place of business and display a permanently attached sign that clearly indicates to the public that they are engaged in the real estate business. There are no specific rules about commercial zoning or the broker being present at all times.

Question 5

Which of the following statements is TRUE regarding a real estate license on inactive status in Arkansas?

Accepted Answer

An inactive licensee is not required to complete continuing education for the annual renewal of the inactive license.

Answer

A licensee on inactive status in Arkansas must still pay renewal fees but is not required to complete the annual continuing education (CE) to renew on inactive status. To reactivate, they must complete the CE that would have been required (up to a maximum of 30 hours). They are strictly prohibited from engaging in any real estate activities.

Arkansas Real Estate License Practice Test

Arkansas Real Estate License Practice Test

Arkansas Real Estate License License Law and Disclosures Questions and Answers