Leasing License Practice Exam

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What is the term for a written or oral agreement between a sponsoring broker and a consumer regarding licensed activities for compensation?

Service agreement
Brokerage agreement
Leasing contract
Consultation agreement

The correct answer is: Brokerage agreement

The term "brokerage agreement" refers specifically to the established relationship between a sponsoring broker and a consumer in which the broker provides licensed services for compensation. This type of agreement outlines the expectations and responsibilities of both parties, detailing the scope of services to be provided, the duration of the agreement, and the fee structure involved. Brokerage agreements are crucial in real estate and leasing transactions as they formalize the relationship and ensure that both the broker and the consumer understand the terms and conditions under which the broker operates. This clarity helps to protect the interests of both parties and is a key component of legal compliance in real estate practices. In contrast, while terms like "service agreement," "leasing contract," and "consultation agreement" may pertain to various business relationships or services, they do not specifically denote the relationship defined within the framework of a brokerage agreement in the context of real estate transactions.