US Ohio Salesperson License Exam

The correct disposition of the accrued interest is governed by the Ohio Administrative Code. Specifically, when funds held in a brokerage trust account are placed in an interest-bearing account, the interest must be handled according to a written agreement between the parties to the transaction. In the absence of such a written agreement, any interest earned must be paid to the Ohio Division of Real Estate & Professional Licensing. A verbal agreement, even if made in good faith, is not sufficient to direct the interest to a third party like a charity or to one of the principals. Therefore, the $75 in interest must be remitted to the Division. Regarding the broker’s own funds, Ohio law permits a broker to deposit a reasonable amount of their personal or business funds into the trust account. This is allowed for the sole purposes of covering bank service charges or to meet the minimum balance requirements to keep the account open. This specific action is an exception to the general prohibition against commingling funds. Thus, the initial deposit of $150 by the broker for this stated purpose is a permissible practice under Ohio real estate license law and does not constitute improper commingling.

The calculation to determine the Loan-to-Value (LTV) ratio is as follows: Loan Amount / Property Value = LTV Ratio \[\frac{\$340,000}{\$400,000} = 0.85\] To express this as a percentage: \[0.85 \times 100 = 85\%\] The Loan-to-Value ratio is a critical risk assessment tool used by lenders to evaluate a mortgage application. It compares the amount of the loan a borrower is requesting to the value of the property they wish to purchase. The value is determined by the lower of the property’s appraised value or its sale price. A higher LTV ratio indicates a smaller down payment from the borrower, which translates to a greater risk for the lender. If the borrower defaults on the loan, the lender may not be able to recover the full loan amount through foreclosure and sale, especially if property values decline. To mitigate this increased risk, lenders have established industry-standard thresholds. For conventional loans, an LTV ratio exceeding 80% is generally considered higher risk. In such cases, the lender’s primary and most common requirement is for the borrower to obtain and pay for Private Mortgage Insurance. This insurance policy protects the lender, not the borrower, against financial loss if the borrower fails to repay the loan. It is a mandatory condition for approving a conventional loan with less than a 20% down payment.

In this scenario, the brokerage, represented by the broker Maria, has agency agreements with both the seller, Kenji, and the buyer, Priya. Initially, this was structured as a designated agency, with Lien representing Kenji and David representing Priya. Under Ohio law, in a designated agency arrangement, the brokerage itself and the broker of record (Maria) function as dual agents, while the designated agents provide exclusive representation to their respective clients. When Lien becomes unavailable, and Maria steps in to communicate directly with both Kenji and Priya, she is actively performing the role of a dual agent. Her previous status as a supervising dual agent becomes an active, direct one. As a dual agent, Maria’s fiduciary duties are limited by law. She cannot advocate for the exclusive interests of one party over the other. Her primary legal obligation is to facilitate the transaction in a neutral, fair, and honest manner. A critical component of this duty is to protect the confidential information of both clients. She cannot disclose to Priya that Kenji might be willing to pay for all repairs, nor can she disclose to Kenji that Priya might be willing to waive the repairs for a price reduction. Her role is to manage the communication and paperwork impartially, not to provide advice or strategy that would benefit one party to the detriment of the other. The original designated agency structure is not voided; rather, the broker is fulfilling her inherent dual agency role due to the exigent circumstances.

The calculation is not applicable here as this is a conceptual question. In Ohio, the ownership of real property can be divided into separate estates, including the surface estate and the subsurface (mineral) estate. When these estates are severed, the mineral estate is generally considered the dominant estate, meaning the mineral rights owner has the implied right to use the surface as is reasonably necessary to access and extract the minerals. However, this right is not absolute. The mineral owner must exercise their rights with due regard for the rights of the surface owner and cannot destroy or substantially impair the use of the surface. The construction of a reservoir for agricultural purposes is a legitimate and reasonable use of the surface. A court would likely balance the interests of both estate owners. Furthermore, the situation is heavily influenced by the Ohio Dormant Mineral Act (Ohio Revised Code 5301.56). This law provides a mechanism for a surface owner to have mineral interests that have been inactive for a 20-year period deemed abandoned and merged back into the surface title. For the mineral interest to be preserved, the holder must have taken certain actions within the preceding 20 years, such as recording a claim, actually producing minerals, or having the mineral interest listed for tax purposes. Since there has been no activity for over 30 years, the surface owner has a strong legal pathway to file an affidavit and provide notice to have the mineral rights declared abandoned and vested in their name. Therefore, the surface owner’s right to develop the land for a reasonable purpose like agriculture is protected, and the dormant nature of the mineral rights provides a powerful tool to clear the title.

The correct analysis of this situation hinges on two fundamental principles of Ohio riparian law as it applies to non-navigable watercourses. First is the doctrine of reasonable use. Riparian rights are correlative, meaning an owner does not have an absolute right to use the water. Their use must be reasonable in a way that does not infringe upon the rights of other riparian owners, particularly those downstream. An upstream owner who diverts a significant amount of water for agricultural purposes, to the point that it substantially diminishes the flow and impairs the downstream owner’s use and enjoyment of the water, is likely engaging in an unreasonable use. Therefore, the downstream owner, Mr. Chen, would have grounds to challenge this use. Second is the legal distinction between avulsion and accretion. Avulsion is the sudden and perceptible change in the course of a body of water, such as one caused by a severe storm. Under Ohio law, avulsion does not change the property boundaries. The boundary line remains at its original location, which for a non-navigable stream is the thread, or center line, of the stream as it existed before the avulsive event. The claim by the upstream owner, Ms. Alvarez, to the newly exposed land is therefore invalid. The original boundary persists despite the creek’s sudden shift.

The federal Residential Lead-Based Paint Hazard Reduction Act of 1992 mandates specific procedures for residential properties built before 1978. A critical component of this law is the buyer’s right to a 10-day period to conduct a lead-based paint inspection or risk assessment. This right exists to allow the buyer to make an informed decision before becoming obligated to purchase the property. The buyer can choose to waive this right, but the waiver must be an affirmative, written action, typically by initialing a specific clause in the disclosure form. If the buyer does not explicitly waive this right, the 10-day period is automatically incorporated into the transaction timeline. The real estate agent’s responsibility is not merely to provide the disclosure forms but to ensure the parties understand and comply with the law’s requirements. In a situation where the buyer has not waived their right, the agent must advise the seller that the buyer is legally entitled to the inspection period. The purchase contract’s obligation is contingent upon this period. The seller’s misunderstanding that a signed contract immediately negates this right is incorrect. The agent must facilitate the inspection and ensure the transaction proceeds in compliance with federal law to avoid liability for all parties involved, including the agent and their brokerage.

In Ohio, for a contract to be legally binding, all parties must have legal capacity. The age of majority in Ohio is 18. Contracts for the sale of real property entered into by a person under the age of 18, a minor, are not automatically void. Instead, they are considered voidable. This critical distinction means the contract is valid unless and until the minor decides to disaffirm it. The choice to either honor the contract or void it rests solely with the minor party. The adult party to the contract is bound by the terms and cannot void the agreement based on the other party’s age. When the minor reaches the age of majority, they gain the full capacity to contract. At this point, they can choose to ratify the contract they made as a minor. Ratification can be express, such as stating in writing that they intend to honor the deal, or implied, such as continuing to make payments or taking steps to close the transaction. However, reaching the age of majority does not automatically ratify the contract. The individual has a reasonable period of time after turning 18 to disaffirm the contract. If they do nothing, their continued inaction or actions consistent with the contract’s terms may eventually be seen as ratification. In the described situation, the individual has just reached the age of majority and has not yet taken any action to ratify the agreement. Therefore, the power to disaffirm the contract still rests with them. Their decision to pursue a different offer constitutes an intention to disaffirm the original agreement, which they are legally entitled to do.

The process of site analysis involves evaluating a property’s suitability for a specific use by examining its physical, locational, and legal characteristics. In this scenario, the most critical and primary obstacle is the legal constraint imposed by the existing zoning classification. The current A-R (Agricultural-Residential) zoning in the Ohio jurisdiction permits low-density uses like single-family homes on large lots, which is fundamentally incompatible with the developer’s plan for a high-density, 200-unit apartment complex. Before any other aspect of the site’s feasibility can be meaningfully assessed, the developer must determine if the controlling governmental body, such as the county or township zoning commission, will approve a zoning change or grant a conditional use permit. This process of seeking a rezoning is often lengthy, politically sensitive, and has no guarantee of success. While physical issues like topography and the presence of a stream, and infrastructural issues like utility availability, are significant and will impact project design and cost, they are secondary to the fundamental legal entitlement to build. A developer would not invest substantial capital into detailed engineering plans, environmental impact studies for the stream, or plans for utility extensions until they have a reasonable assurance that the proposed land use itself will be legally permitted. Therefore, the zoning discrepancy represents the initial, make-or-break hurdle that governs all subsequent development decisions and expenditures.

The legal analysis begins with Leo’s initial submission, which constitutes a formal offer to purchase. When Mr. Chen altered a material term of this offer, specifically the closing date, he did not accept it. Under Ohio contract law, any modification to the original offer’s terms acts as a rejection of that offer and simultaneously creates a new offer, known as a counteroffer. At this point, the roles have reversed: Mr. Chen is now the offeror, and Leo is the offeree. The original offer from Leo is terminated and can no longer be accepted. An offeror retains the absolute right to revoke their offer at any point before it has been accepted by the offeree. In this scenario, Mr. Chen, through his agent Priya, communicated a formal written revocation of his counteroffer to Leo’s agent. This act of revocation was initiated before Leo’s agent communicated Leo’s acceptance. For a contract to be formed, there must be an offer and an unconditional acceptance of that exact offer. Since Mr. Chen’s counteroffer was validly withdrawn before Leo could accept it, the power of acceptance was terminated. Leo’s subsequent attempt to accept was legally ineffective because there was no longer an active offer on the table to accept. Consequently, no binding contract was ever formed between Mr. Chen and Leo, leaving Mr. Chen free to consider and accept other offers, such as the one from Beatrice.

An exclusive buyer agency agreement is a legally binding contract that establishes an agency relationship for a specified period. Under Ohio law, such agreements must be in writing and contain a definite expiration date to be enforceable, particularly concerning commission claims. A client’s unilateral declaration to terminate the agreement before the specified expiration date does not automatically void the contract’s terms, although it may revoke the agent’s authority to perform further services. This action by the client could be considered a breach of contract. A critical component of many exclusive agency agreements is the protection period clause, also known as an extender or safety clause. This clause is designed to protect the agent’s efforts. It stipulates that if the buyer, within a specified period after the agreement terminates or expires, purchases a property that the agent introduced to them during the term of the agreement, the brokerage is still owed a commission. In this scenario, the agent introduced the property during the valid term of the written agreement. The buyer’s purchase occurred after her attempted termination but within the timeframe specified by the protection period clause. Therefore, the contractual obligation to pay the commission, as defined by that clause, remains in effect. The client’s direct contact with the listing agent does not negate the terms of the pre-existing, signed buyer agency agreement and its protection clause.

The legal determination of whether an item is real property (a fixture) or personal property (chattel) in Ohio relies on a three-part test, with the third part being the most critical. The tests are the method of annexation, the adaptation of the item to the real estate, and the intention of the party who attached the item. First, the method of annexation considers how the item is attached to the property. If removal would cause significant damage to the property, it points toward the item being a fixture. The fireplace mantelpiece is securely bolted into the brickwork, a permanent part of the structure, indicating a high degree of annexation. Second, adaptation refers to how the item is customized for, or integral to the use of, the property. A custom-milled mantelpiece is specifically designed and fitted for that particular fireplace, making it highly adapted. Third, and most importantly, is the objective intention of the annexor. Courts look at the nature of the item and the circumstances to infer what a reasonable person would have intended. A fireplace mantel is an integral architectural component of a living room, and the clear intention is for it to be a permanent installation that adds value to the real estate itself. It is not an item typically taken by a seller. By satisfying all three tests, particularly the crucial intention test, the mantelpiece is legally classified as a fixture and therefore part of the real property to be conveyed in the sale.

The core legal principle is that limited common elements, despite being designated for the exclusive use of a specific unit owner, remain part of the common elements of the condominium property. Under the Ohio Condominium Property Act (Ohio Revised Code Chapter 5311), the unit owners’ association, acting through its elected board of managers, retains administrative and regulatory authority over all common elements, including limited common elements. The condominium declaration and bylaws are the primary governing documents that grant and define the scope of the board’s power. Unless these documents explicitly grant a unit owner the right to make a specific alteration to a limited common element, the authority to approve or deny such a modification rests with the board. The board’s responsibility is to act in the best interest of the entire community, which includes maintaining the structural integrity, safety, and aesthetic uniformity of the property. Therefore, a unit owner cannot unilaterally decide to alter a limited common element, such as enclosing a balcony. They must seek and obtain permission from the board, which has the legal standing to deny the request based on reasonable criteria like architectural consistency, potential impact on insurance, or future maintenance responsibilities, even if the declaration does not list every possible type of alteration.

The brokerage is not entitled to a commission. According to the Ohio Revised Code and regulations from the Ohio Division of Real Estate and Professional Licensing, all exclusive listing agreements, including exclusive right-to-sell agreements, must contain a definite and specific date of termination. The law explicitly prohibits any provision that would automatically extend the term of an exclusive listing. In this scenario, the clause stating the agreement “will automatically convert to an open listing for an additional 90-day period” is an attempt to create an automatic continuation of the agency relationship beyond the initial, definite term. This violates the statutory requirement. The purpose of this law is to prevent sellers from being locked into an agreement indefinitely without their express, written consent for a new term. Therefore, the exclusive right-to-sell agreement legally terminated after the initial 90-day period. Since the property was sold on the 100th day, after the expiration of the valid listing term, and the seller independently found the buyer without any involvement from the brokerage, the brokerage was not the procuring cause and has no legal claim to a commission. The unenforceable automatic conversion clause does not create a new, valid listing agreement.

The legal principle central to this scenario is that every parcel of real property is considered unique under the law. Unlike fungible goods, such as commodities or manufactured products, one piece of land cannot be exactly replaced by another. Consequently, when a seller breaches a valid real estate purchase agreement, monetary damages are often deemed an inadequate remedy for the buyer. The buyer contracted for a specific property with a unique location, features, and characteristics. Simply receiving money does not give the buyer the benefit of their original bargain. In this situation, the buyer’s most powerful and appropriate legal remedy is to sue for specific performance. This is an equitable remedy where a court orders the breaching party to perform their obligations as outlined in the contract. In this case, a court would compel the seller to proceed with the sale and transfer title of the property to the buyer as agreed. This remedy is granted precisely because of the unique nature of real estate, ensuring the non-breaching party receives the actual property they contracted for, rather than a monetary substitute that cannot truly compensate for the loss of that specific parcel. The seller’s reason for breaching, which is to accept a more lucrative offer, is not a valid legal defense against a suit for specific performance.

The agent’s observation of a potential vent pipe creates a reasonable suspicion of a latent defect, specifically an undisclosed Underground Storage Tank (UST). Under Ohio law, a real estate agent has a duty to disclose all known material facts to all parties in a transaction. This duty is independent of the seller’s disclosures on the Residential Property Disclosure Form (RPDF). A material fact is any information that could influence a reasonable person’s decision to buy or the price they would pay. The potential for soil and groundwater contamination from a leaking UST on a former gas station site is a significant material fact. Simply relying on the seller’s statement of “no knowledge” is insufficient once the agent has a reason to suspect otherwise. The agent’s primary obligation is to act with honesty and fairness. This requires informing the seller of the observation and the potential legal and financial ramifications of non-disclosure or inaccurate disclosure. The agent must also advise the seller to investigate the issue, for example, by recommending a Phase I Environmental Site Assessment. Crucially, the agent must also ensure that the potential buyer is made aware of the observation and the property’s former use, as this information is critical for the buyer’s due diligence. Ignoring the observation would be a breach of the agent’s duty and could be considered misrepresentation.

The determination of the agreement’s legal status requires an analysis based on the essential elements of a valid and enforceable contract for real property in Ohio. The five key elements are: 1) Offer and Acceptance (mutual assent), 2) Consideration, 3) Legally Competent Parties, 4) Legal Purpose, and 5) a contract in writing. In the scenario, offer and acceptance occurred when Anya and Mr. Chen orally agreed on the price. Consideration is present through the exchange of promises and the $1,000 deposit. Both parties are legally competent, as Anya is 18, the age of majority in Ohio, and Mr. Chen is a business investor. The purpose of the contract, selling property, is legal. However, the agreement fails on the fifth element. The Ohio Statute of Frauds, specifically found in Ohio Revised Code § 1335.05, mandates that any contract for the sale of an interest in real estate must be in writing and signed by the party against whom enforcement is sought. Since the agreement between Anya and Mr. Chen was purely oral, it does not satisfy this statutory requirement. Therefore, while the agreement has the makings of a contract, it is legally unenforceable. A court would not compel either party to perform the sale. The existence of a deposit does not cure this fatal defect. For a contract to be legally binding in an Ohio real estate transaction, it must satisfy all essential elements. The core components include a clear offer and an unequivocal acceptance, creating a meeting of the minds. There must also be consideration, which is the value that each party gives up; this can be a promise, an act, or a forbearance. The parties entering the contract must be legally competent, meaning they are of legal age and sound mind. Furthermore, the contract’s objective must be for a legal purpose and not violate public policy. Crucially for real estate, Ohio’s Statute of Frauds imposes an additional requirement: the agreement must be memorialized in a written document and signed by the party to be charged. An oral agreement for the sale of property, even if all other elements are present, is considered an unenforceable contract. This means that while a contract may technically exist, the courts will not provide a remedy or force the parties to comply with its terms due to the failure to meet this specific legal formality. It is distinct from a void contract, which is invalid from its inception, or a voidable contract, which one party has the option to cancel.

The core issue is the loan’s salability on the secondary mortgage market. The financial ecosystem for mortgages involves a primary market, where lenders originate loans directly to borrowers, and a crucial secondary market, where those loans are bought and sold. Major players in the secondary market, like the government-sponsored enterprises Fannie Mae and Freddie Mac, purchase vast quantities of mortgages from primary lenders. This process provides liquidity, allowing primary lenders to free up their capital to make new loans. However, Fannie Mae and Freddie Mac will only purchase loans that meet specific criteria, known as “conforming loans.” These criteria include loan amount limits, borrower credit scores, and debt-to-income ratios. When a proposed loan, such as a large jumbo loan or one with unusual terms, does not meet these standards, it is “non-conforming.” A primary lender cannot easily sell a non-conforming loan on the secondary market. Consequently, the lender must keep the loan in its own investment collection, referred to as its “portfolio.” Holding a “portfolio loan” means the lender retains all the associated risks, such as the risk of the borrower defaulting, for the entire term of the loan. It also ties up the lender’s capital for decades, preventing it from being used for other loans. This increased risk and lack of liquidity makes lenders significantly more cautious and apply stricter underwriting standards for non-conforming loans.

This question does not require a mathematical calculation. The solution is based on a conceptual understanding of the Government Survey System (GSS). The Government Survey System, also known as the Rectangular Survey System, was established to survey and describe land in the United States. It is based on a grid system of intersecting lines. The primary north-south lines are called principal meridians, and the primary east-west lines are called baselines. From these, the land is divided into squares called townships, which are typically six miles square and contain 36 square miles. Townships are delineated by range lines running north-south and township lines running east-west. A significant challenge in this system is the curvature of the Earth. As range lines extend northward, they converge, meaning they get closer together. If this convergence were not corrected, townships would become progressively narrower further north of the baseline. To compensate for this, the system incorporates correction lines. Standard parallels are established every 24 miles north and south of the baseline, and guide meridians are established every 24 miles east and west of the principal meridian. When surveyors lay out a township, they begin measurements from the south and east and move north and west. All convergence errors and measurement inaccuracies are pushed to the northern and western boundaries of the township. Consequently, the sections along the north and west edges of a township are not standard 640-acre sections. These irregular sections are subdivided into parcels called government lots. These lots are often smaller than a standard aliquot part (like a quarter-quarter section) and have non-standard dimensions. Their purpose is to absorb the discrepancies created by the Earth’s curvature and ensure the other sections within the township remain as close to the standard size as possible.

In Ohio, an option contract is a unilateral agreement where an optionor (seller) grants an optionee (potential buyer) the exclusive right to purchase a property at a set price within a specific time frame, in exchange for valuable consideration. The optionee is not obligated to buy, but the optionor is obligated to sell if the optionee exercises their right. A critical aspect of Ohio real estate law, as stipulated in the Ohio Revised Code and the Ohio Administrative Code, concerns the conduct of real estate licensees when they act as principals in a transaction. When a licensee seeks to acquire an interest in property for their own account, such as through an option contract, they have an affirmative duty to disclose their status as a licensee in writing to the other party. This disclosure must be made before an agreement is reached. The purpose of this rule is to prevent licensees from using their specialized knowledge to gain an unfair advantage over an uninformed seller. If a licensee fails to make this required written disclosure, the contract is not automatically void. Instead, the failure to disclose constitutes a violation of license law and renders the contract voidable at the discretion of the non-licensee party. This means the seller, upon learning of the licensee’s status and the lack of disclosure, has the power to either affirm the contract or declare it void. The choice rests solely with the aggrieved party, not the licensee.

The core legal principle at issue is the resolution of conflicts between public land use controls, such as municipal zoning ordinances, and private land use controls, such as deed restrictions or restrictive covenants. When both a public and a private restriction apply to a parcel of land, and they are in conflict, the more restrictive of the two will be enforced. It is a common misconception that public controls automatically override private ones. In this scenario, the private deed restriction limits land use exclusively to single-family dwellings. The new municipal zoning ordinance is less restrictive; it permits duplexes, which means it also implicitly permits single-family dwellings, but it expands the possible uses. To determine which control governs, one must compare their stringency. The deed restriction allows for only one type of use (single-family), while the zoning allows for more (duplexes). Therefore, the deed restriction is the more restrictive regulation. A court will uphold the more restrictive control. Consequently, the homeowners’ association has the legal right to enforce the original deed restriction, and the property owner cannot build a duplex on the lot, despite the new, more permissive zoning ordinance. The rezoning by the municipality does not invalidate the legally binding private contract among the property owners.

The correct course of action is based on a clear understanding of the distinct roles of an abstract of title, an attorney’s opinion of title, and title insurance in an Ohio real estate transaction. An abstract of title is not a guarantee of title itself. Instead, it is a condensed, chronological summary of all recorded documents and legal proceedings that affect the title to a specific parcel of real property. Its function is to provide a factual history based on public records. The abstractor who prepares the document does not offer a legal opinion on the condition of the title. The critical next step after the abstract is prepared is for a qualified attorney to examine it and render an opinion of title. In this scenario, the attorney’s examination has successfully identified a significant defect, known as a cloud on the title. This discovery demonstrates that the abstract and the subsequent legal review have functioned exactly as intended—to bring potential title issues to light before a closing. The abstract itself is not defective; it has accurately reported the state of the recorded history. The problem lies within the title’s history. To remedy such a gap or cloud and ensure the seller can convey marketable title as required by most purchase agreements, a legal action known as a suit to quiet title is often necessary. This court proceeding resolves ownership disputes and clears the title defect, resulting in a court order that binds all parties. Only after the title is cleared can a title insurance company typically issue a policy without taking an exception for that specific defect. The Ohio Marketable Title Act, while designed to extinguish old claims and simplify title examination, does not automatically cure a significant gap in the chain of title within the 40-year statutory period.

The established legal principle for interpreting conflicting elements within a metes and bounds legal description is to follow a specific order of priority. This hierarchy exists to best determine the original intent of the parties creating the boundary. The highest priority is given to natural monuments, which are physical, permanent, and natural features of the land, such as trees, streams, or boulders. These are considered the most reliable indicators of a boundary corner. Following natural monuments in priority are artificial monuments like iron pins or stakes, then adjacent tracts or boundaries, then courses or directions, and finally, distances. The least priority is given to the stated area or quantity of land. In the given scenario, there is a conflict between a specified distance, which is 330 feet, and a natural monument, which is the large, marked boulder. According to the hierarchy of controls, the natural monument is superior to and controls the distance. Therefore, the boundary line must extend to the physical location of the boulder, regardless of the measurement stated in the deed. The distance of 330 feet is considered informational but subordinate to the physical marker. The true corner is at the boulder, and the correct distance is 342 feet.

The core of this issue rests on the Ohio Revised Code’s strict regulations for handling trust funds, specifically earnest money, when a dispute arises. A broker acts as a neutral fiduciary, or stakeholder, for funds entrusted to them. They do not have the authority to act as an arbiter or judge to resolve a disagreement between the buyer and seller. In this scenario, the seller’s claim of a bad-faith effort by the buyer, contrasted with the buyer’s loan denial letter, creates a legitimate dispute over which party is entitled to the earnest money. The broker cannot unilaterally interpret the contract or weigh the evidence to make a decision. Ohio law is explicit: in the absence of a mutual written agreement signed by all parties to the contract, or a direct order from a court of competent jurisdiction, the broker’s sole legal obligation is to safeguard the funds. This means the money must remain untouched in the brokerage’s special non-interest-bearing trust account. Any other action, such as releasing the funds based on the broker’s own judgment or siding with one party, would constitute improper handling of trust funds and subject the licensee to severe disciplinary action by the Ohio Division of Real Estate and Professional Licensing, including fines, suspension, or revocation of their license. The broker must hold the funds indefinitely until the parties either resolve the dispute themselves and provide written instructions, or a court resolves it for them.

The core legal and ethical conflict in this scenario is between the agent’s continuing fiduciary duty of confidentiality to a former client and the fiduciary duties of disclosure and reasonable care owed to a current client. Under Ohio law, the duty of confidentiality is one of the fundamental obligations an agent owes to their client, and it survives the termination of the agency relationship. This means that any private information shared by the client, such as their financial status or motivation for a transaction, must be kept confidential indefinitely unless the client grants permission for its release or disclosure is required by law. In this case, Boris’s financial distress is confidential information. Therefore, Anya is prohibited from revealing it to her current client, Chandra. At the same time, Anya owes Chandra the duties of reasonable care and disclosure of material facts. This requires her to provide competent advice and relevant market information to help Chandra make an informed decision. Simply refusing to discuss the comparable sale would be a failure of this duty. The correct course of action is to balance these obligations. Anya must explicitly state her legal and ethical inability to share a former client’s confidential information. However, she can and should still fulfill her duty to Chandra by offering to provide a professional analysis of the comparable sale based on objective, public-record data, such as the property’s condition, features, size, and the prevailing market conditions at the time of the sale. This approach respects the enduring duty of confidentiality to Boris while providing competent and diligent service to Chandra.

The core legal principle at issue is the requirement for a plat map to be officially recorded to create a valid lot and block legal description. Under Ohio Revised Code Chapter 711, a developer who lays out a subdivision must have a plat prepared and certified. This plat must then be approved by the appropriate local planning authority. However, the most critical step for creating legally recognized lots is the filing and recording of this approved plat with the County Recorder’s office in the county where the property is located. This act of recording is what incorporates the subdivision map into the public land records. Once recorded, a description such as “Lot 12, Whispering Pines Estates” becomes a sufficient and valid legal description because it refers to a specific, publicly accessible document. Without this recording, the subdivision does not legally exist, and the lot and block descriptions are considered defective. They refer to a private map, not an official public record. Consequently, a deed using such a description fails to provide a legally adequate description of the property being conveyed, creating a cloud on the title. Government agencies, like a building department, rely on these official public records to verify property boundaries and issue permits. Therefore, a permit cannot be issued for a lot whose existence is not established in the county’s official records. The developer’s failure to record the plat is the foundational error that invalidates the legal description used in the deed.

The core issue revolves around Ohio’s dower rights as defined in the Ohio Revised Code. Dower is a legal interest that a spouse has in the real property of their partner. Specifically, under ORC 2103.02, a spouse is endowed with a life estate in one-third of all real property that their partner was seized of as an estate of inheritance at any time during the marriage. In this scenario, Linus acquired the property while married to Beatrice. Therefore, Beatrice automatically acquired an inchoate dower interest in that property. For Linus to convey clear, marketable title, free from all encumbrances, Beatrice’s signature on the deed is required to release her dower interest. Linus, as the sole owner on title, could validly sign and deliver a deed to transfer his ownership interest to Amara. The execution of the deed by Linus is valid in itself. However, because Beatrice did not sign the deed, her dower interest was not extinguished. It remains attached to the property as a significant encumbrance or cloud on the title. Upon Linus’s death, Beatrice’s inchoate dower interest becomes a choate, or vested, right. This means Amara owns the property, but it is subject to Beatrice’s legal claim. Furthermore, because Linus provided a general warranty deed, he (and now his estate) warranted to Amara that the title was free from encumbrances. The unreleased dower right constitutes a breach of this covenant against encumbrances, giving Amara a legal cause of action against Linus’s estate.

The legally required action is for the agent to provide the client with a written Affiliated Business Arrangement (AfBA) disclosure at or before the time of the referral. The Real Estate Settlement Procedures Act (RESPA) strictly regulates referrals among settlement service providers when a business affiliation exists. An affiliation is defined as an ownership interest of 1% or more. In this scenario, the brokerage, mortgage company, and title company are all settlement service providers, and an AfBA exists due to the common ownership. While RESPA’s Section 8 generally prohibits giving or receiving anything of value for the referral of settlement service business, it provides a specific exception for AfBAs if three conditions are met. First, the person making the referral must provide the consumer with a written disclosure form detailing the nature of the relationship between the providers and giving an estimate of the referred party’s charges. This disclosure must be given at or before the time of the referral. Second, the consumer cannot be required to use the services of the affiliated entity. The disclosure form itself must state this. Third, the only thing of value received by the referring party from the arrangement can be a return on their ownership interest. A verbal notice is insufficient, and simply posting a sign in an office does not satisfy the requirement to provide the disclosure directly to the consumer at the specific time of referral.

This question does not require a mathematical calculation. Under Ohio law and general real estate practice, a licensee has a duty to disclose all known material facts regarding a property’s condition. This duty extends beyond simply transmitting the seller’s representations on a disclosure form. A material fact is any information that could influence a reasonable person’s decision to buy or the price they would be willing to pay. The presence of capped pipes on a property formerly near a gas station constitutes a significant red flag for the potential existence of an abandoned Underground Storage Tank (UST). Abandoned USTs can leak petroleum products, leading to soil and groundwater contamination, which is a serious environmental hazard and a major financial liability. The licensee’s observation of these pipes and discovery of historical maps indicating a prior gas station are material facts. The licensee’s primary obligation is to inform their client, the seller, of these findings and strongly recommend they seek professional evaluation, such as a Phase I Environmental Site Assessment (ESA), to determine if a problem exists. Regardless of the seller’s response, the licensee must also disclose these observed red flags to any potential buyer. Concealing these observations would be a violation of the licensee’s duty of disclosure and could lead to legal and disciplinary action. The initial step is not to unilaterally report to a government agency, as the presence of pipes is not definitive proof of contamination. The focus is on proper disclosure to all parties and recommending expert investigation.

The legal doctrine of vicarious liability holds a principal party responsible for the unlawful actions of their agent. In the context of Ohio real estate law, a principal broker is held vicariously liable for the actions of their affiliated salespersons when those actions are performed within the course and scope of their real estate duties. This responsibility is rooted in the broker’s statutory duty to supervise all licensees affiliated with the brokerage. This duty of supervision is absolute and is not diminished by the salesperson’s status as an independent contractor for tax or other purposes. The core issue is whether the salesperson’s act, such as making a representation about a property’s characteristics, falls within the scope of the business they are authorized to conduct on behalf of the brokerage. A broker’s lack of direct, specific knowledge about a particular misrepresentation made by their agent does not serve as a valid defense against liability. The failure to prevent such an act can be seen as a breach of the overarching duty to supervise. Therefore, if a salesperson’s misrepresentation causes harm to a client or customer, the principal broker and the brokerage itself can be held legally responsible for the resulting damages because the salesperson was acting as an agent of the brokerage.

This scenario tests the Ohio real estate licensee’s statutory duty of exercising reasonable skill and care. Under Ohio law, specifically the Ohio Revised Code, a licensee owes this duty to their client. Reasonable care involves using one’s professional knowledge to observe the property, identify potential red flags, and advise the client accordingly. It does not mean the agent must be a home inspector, but it does mean they cannot ignore obvious signs that may point to a material defect. In this case, a musty odor and a freshly painted-over stain are significant red flags for potential water damage and mold, which are material facts. The seller’s Residential Property Disclosure Form (RPDF) is a statement from the seller, but it does not absolve the agent of their own duty to observe and advise. The agent’s responsibility is to bring these observations to their client’s attention, explain the potential implications, and recommend that the client seek expert evaluation, such as through a professional home inspection. This action empowers the client to make a fully informed decision about the property and how to proceed, fulfilling the agent’s obligation to protect the client’s interests through diligent and competent service. Simply relying on the disclosure or attempting to investigate personally would be a breach of this duty.