Practice of Real Estate and Mandated Disclosures

Question 1 of 119

The fundamental basis for Fair Housing throughout the United States stems from:

the First Amendment of the Constitution.
the National Association of Fair Housing.
the 13th Amendment of the Constitution.
the Rumford Fair Housing Act.

Question 2 of 119

A seller lists a property with an agent. The agent shows the property to a white prospect at one price and the agent’s broker shows the property to a minority couple at a higher price. The seller then sells the property to a neighbor because the neighbor does not want minorities next door. Who has NOT broken the law?

The broker
The seller
The neighbor
The white prospect

Question 3 of 119

Complaints involving violations of discrimination should be reported to the:

Real Estate Commissioner.
Labor Commission.
Department of Fair Employment and Housing.
Department of Housing and Community Development.

Question 4 of 119

A broker convinces a white family to put their home up for sale after saying that minority families are moving into the neighborhood. The broker’s actions are all of the following EXCEPT:

blockbusting.
panic Selling.
illegal.
legal but unethical.

Question 5 of 119

A licensee was farming a non-integrated neighborhood which was next to an integrated neighborhood by telling the owners that if minority people moved into their neighborhood, their property values would go down. This is an example of:

steering.
panic peddling
blockbusting.
both (b) and (c).

Question 6 of 119

A listing agent received two offers in the morning and immediately presented the offers to the seller. In the evening the agent received two more offers, both with a lower price. What should the agent do?

Don't present the evening offers to the seller because the offers were low.
Wait until the seller has made a decision on the morning offers before presenting the evening offers.
Wait until the next day to present the lower evening offers.
Let the seller know of the two new offers immediately.

Question 7 of 119

A broker is showing property to a person who is an ethnic minority. The broker decided to show property in a certain area because of his customer’s race. This is an example of:

redlining.
block busting.
plottage.
steering.

Question 8 of 119

A loan broker asks a person applying through the broker’s office for a new loan to fill out a questionnaire which asks the borrower’s race and marital status. The applicant can:

refuse to disclose his race or marital status.
file a complaint with the real estate commissioner.
supply the information requested so his credit history can be properly checked.
all of the above.

Question 9 of 119

When an agent is accused of “puffing,” the agent might be guilty of which of the following:

Trying to convince a potential seller of his wide popularity among local people.
Convincing the appraiser to assign a higher value to the property than is justified by the comparable recent sales in the area.
Exaggerating the features of the property or neighborhood when showing the property to prospective buyers
Convincing a seller to offer a higher commission than is customary for that type of property.

Question 10 of 119

When a deed contains discriminatory language or clauses:

The deed must be rewritten by the owner before the property may be sold.
The title company must re-write the deed.
The discriminatory words or clauses are unenforceable.
The clauses may be enforced, since they would be considered “grandfathered” into law.

Question 11 of 119

A licensed real estate broker who owned a large real estate firm operating under the name ABC Realty Company, listed a property for a total price of $40,000. The broker and many of his salespersons were all principals in an investment company operating under the name of Realty Income Investment Company. The investment company decided to purchase the property so the broker presented an all cash offer to the owner for the full price, but did not disclose to the seller who the purchasers were. The seller accepted the offer and opened escrow. Under these circumstances:

The broker’s actions were perfectly legal since he offered the full cash price.
The broker’s offer would be legal provided he added to the escrow instructions the fact that the purchasing firm was composed of brokers and salesperson.
The broker acted properly provided he agreed to waive any commission.
The broker’s action was improper because he did not reveal the true identity of the purchaser.

Question 12 of 119

An unlicensed secretary in a real estate office can:

quote prices over the phone.
type listings and sales contracts for salespeople.
prepare and mail postcards for salespeople.
all of the above.

Question 13 of 119

Realtor® Ken hired an unlicensed person named Jose to hand out his brochures, fliers, and door hangers in his farm neighborhood. Ken also instructed Jose to go to his health club and hand out printed information. Property owner Mary, who has already listed her home with another broker, received a phone call from Jose talking about a possible meeting with Ken. Jose was using dialogue which was a scripted pitch written by Ken. Mary happened to record the conversation. Which of the following statements is correct?

This is perfectly acceptable for the unlicensed person and the broker.
The unlicensed person is performing acts for which a real estate license is required.
An unlicensed person may pass out brochures, but under no circumstances, talk to a prospective client.
Realtors® agree to work under the Realtor’s® Code of Ethics. It is unethical for a Realtor® to solicit business from an owner who has a listing with another broker.

Question 14 of 119

An unlicensed assistant puts together information and assists in writing an advertisement for a broker. For this to be legal the broker must:

write it himself.
approve it.
terminate the assistant immediately.
proofread it.

Question 15 of 119

A salesperson tells his broker that he is quitting and plans to go to work for another broker. His present employing broker should:

notify the real estate commissioner and hold the license until further notice from the commissioner.
give the salesperson his license and notify the real estate commissioner immediately in writing.
request cancellation of the salesperson’s license.
call the other broker to confirm the change.

Question 16 of 119

A salesperson asked the listing broker, who was not his employing broker, to advance him $600 against the commission the listing broker had agreed to pay to the selling agent. The listing broker paid the selling agent the $600 even though the deal had not yet closed escrow. In this situation:

The listing broker had violated the Real Estate Law.
This is permissible if it is in writing.
This is fraud.
None of the above.

Question 17 of 119

After passing the real estate license examination, a person must apply for the license within:

one year of the examination.
one year of notification of passing.
six months of the examination.
six months of notification of passing.

Question 18 of 119

When a licensee is employed as an independent contractor, the employing broker may still have to cover the licensee for:

unemployment insurance.
worker’s compensation insurance
errors and omissions insurance.
all of the above are required.

Question 19 of 119

What is the maximum amount that could be recovered from the Recovery Fund for one salesperson?

20000
50000
100000
250000

Question 20 of 119

Buyer Frank sued broker Sam for a misrepresentation in the sale of a single family residence. He was awarded a judgment but Broker Sam was bankrupt and unable to pay the judgment. Buyer Frank appealed to the Real Estate Recovery Account. Assuming the Recovery account agrees to pay Frank, he will receive a maximum of _______ for this single transaction.

20000
50000
100000
250000

Question 21 of 119

The Commissioner paid from the Recovery Fund for settlement of a claim based upon a judgment against a licensed broker. If the broker is bankrupt, he/she would be required to:

pay the fund back in full plus interest.
make monthly payments.
pay back only a certain percentage.
pay back nothing.

Question 22 of 119

What portion of applicant license fees are put to use in the Recovery portion of the Real Estate Education and Recovery Fund?

1 percent
5 percent
12 percent
50 percent

Question 23 of 119

When budgeting for a real estate office, the phrase “company dollar” means:

The money required to establish an office and run it for a given period of time.
The income of an office after all expenses are subtracted.
The income of an office after all commissions are subtracted.
None of the above.

Question 24 of 119

Dividing office overhead by the number of salespersons gives:

broker dollar.
desk costs.
company dollar.
overhead.

Question 25 of 119

Copies of real estate transaction documents must be kept:

by the broker for 4 years.
by the broker only for 3 years.
by the salesperson for .
by the broker forever.

Question 26 of 119

Which of the following documents DOES NOT need to be stored for 3 years?

Unaccepted offers
Accepted offers
Advertisements
Listing agreements

Question 27 of 119

The supervising broker should review all documents prepared by their associate licensees:

same day or end of next day.
according to the broker’s procedures manual.
within 10 days.
at close of escrow.

Question 28 of 119

A licensee put a “blind ad” in the local newspaper. This ad does NOT:

identify the advertiser as a real estate licensee.
include the address of the property for sale.
include the licensee's address.
disclose the selling price.

Question 29 of 119

An advance fee is:

a listing agents commission.
a bonus paid to the seller by an agent to obtain a listing.
a prepaid fee to cover advertising and promotional costs.
a gift to the listing broker.

Question 30 of 119

All materials used in obtaining advance fee agreements must be submitted to the Real Estate Commissioner at least ____________ before they are used.

5 calendar days
10 calendar days
20 calendar days
30 calendar days

Question 31 of 119

A landlord and a tenant entered into a two year lease on commercial retail space. Three months into the lease, the tenant realizes he is unable to continue paying the rent and asks the landlord to release him from the lease. The landlord agrees. This would be considered a(n):

surrender.
assignment.
abandonment.
default.

Question 32 of 119

It is important for a landlord to obtain all the information on a rental application in order for the landlord to make a decision about renting to a particular person or to more than one person. A landlord thinks it is important to know whether or not a couple is married. Is it legal for the landlord to inquire whether or not a couple is married on the rental application?

Yes, as it may affect the couple’s ability to pay rent.
Yes, because this is a moral issue.
It is legal, but might be considered unethical.
No, this would be considered discrimination.

Question 33 of 119

A subdivider must give a copy of the Commissioner’s public report to:

anyone who intends to purchase one or more lots.
any person, at any time, upon request.
only purchasers of lots just before they sign the purchase contract.
only their salespeople.

Question 34 of 119

When is the subdivider required to give the public report to prospective purchasers?

prior to the sale of the last lot in a subdivision.
prior to the sale of the first lot in a subdivision.
prior to advertising the lots for sale.
prior to approval of the tentative map.

Question 35 of 119

Which of the following must be kept on file by the broker for three years?

loan broker statement
real property security statement
receipt for copy of public report
all of these

Question 36 of 119

Which of the following statements is TRUE regarding public reports?

A public report may be renewed under certain circumstances.
A copy of the public report must be given to anyone upon request.
A copy of the public report must be displayed in the subdivision sales office.
All of the above.

Question 37 of 119

Which of the following events would require the subdivider to notify the Real Estate Commissioner?

The subdivider changes lot sizes.
The subdivider changes provisions in the purchase contract.
The subdivider changes financing terms.
All of the above.

Question 38 of 119

A subdivider sold five 1-acre lots to Mr. Dalton and optioned five lots to Mr. Bernstein. What course of action does the subdivider have to take as a result of this action?

Notify the Real Estate Commissioner of a material change.
Nothing, but Mr. Dalton and Mr. Bernstein need to contact the Commissioner.
Notify the Commissioner of an intent to subdivide.
Report the sale now and report the option when it is exercised by Mr. Bernstein.

Question 39 of 119

A subdivider may use the public report in their advertising as long as:

they only use a picture of the report and not its verbiage.
they only reference certain applicable parts of the report.
they use the report in its entirety.
they receive permission to use specific parts of the report.

Question 40 of 119

A public report is required if a person is going to subdivide a lot for condominiums into:

one or more units.
two or more units.
four or more units.
five or more units.

Question 41 of 119

Which of the following allows a subdivider to enter into binding contracts with purchasers for lots but does not allow transactions to be completed?

final public report
conditional public report
white report
negative declaration

Question 42 of 119

If a subdivision project will have a significant effect on the environment, the government agency that approves the project may be required to prepare a(n):

Alquist-Priolo report.
Earthquake fault zone report.
Coastal Zone Impact Report.
Environmental Impact Report.

Question 43 of 119

A statement issued by the authorizing government agency that there will be no impact on the environment significant enough to warrant preparation of an EIR is called a:

negative declaration.
positive declaration.
neutral declaration.
go-ahead declaration.

Question 44 of 119

A developer produces the same house in each of the following locations: 1) A house across the street from a shopping center; 2) A house adjacent to a bus stop on a heavily traveled thoroughfare; 3) A house in the center of the subdivision; 4) A house on a key lot in the subdivision. These various properties could all be purchased for the same price. Which one would you, a knowledgeable real estate licensee, advise a home buyer to purchase?

In the center of the subdivision.
On the key lot.
Across from the shopping center.
Near the bus stop on the heavily traveled street.

Question 45 of 119

The installation of curbs, gutters, streets, and utilities in a new subdivision is the responsibility of:

the homeowner’s association.
developer.
buyers as a group.
city.

Question 46 of 119

With regard to the public report, which of the following would be considered a material change in a subdivision?

change in lot sizes
changes in sales contracts
changes in CC&Rs
all of these

Question 47 of 119

When converting an existing residential property to a condominium, existing tenants must be given:

180 days written notice.
30 days written notice.
12 months’ notice.
none of these.

Question 48 of 119

Each tenant of a proposed conversion of their building from residential property to a condominium has the right to:

vacate the premises.
cancel their lease.
purchase their unit.
extend their lease.

Question 49 of 119

A blanket encumbrance exists on a large subdivision. The owner negotiates to pay off the loans on certain lots as they are sold. To accomplish this the beneficiary would execute a:

partial deed transfer.
deed of partial reconveyance.
quitclaim deed.
subordination agreement.

Question 50 of 119

In real estate transactions, the type of misrepresentation which occurs least often is:

innocent misrepresentation.
negligent misrepresentation.
fraudulent misrepresentation.
malicious misrepresentation.

Question 51 of 119

Generally, a fact concerning a transaction is considered “material” if:

The seller elects to disclose the fact prior to consummation of the transaction.
Prior knowledge of the fact would have prevented the other party from entering into the contract.
All parties to the transaction agree in advance that the fact is important.
The seller's agent determines that the fact warrants disclosure.

Question 52 of 119

A broker sells a house advertised “as-is.” There are no obvious defects that would be evident to a prudent buyer upon inspection, but the seller and the broker know that the plumbing is very defective. The buyer moves in and discovers the defects. The buyer then sues the broker and the seller for misrepresentation. The suit will probably be:

Successful because the seller and the broker withheld material information that should have been disclosed.
Successful because an “as-is” clause does not relieve a seller or broker from liability for disclosing material facts which they knew of.
Unsuccessful because selling the property “as-is” gives constructive notice that there are defects.
Unsuccessful because the defects would have been revealed if the purchase agreement had contained an inspection clause.

Question 53 of 119

The seller must disclose any material change in the condition of the property, or the title, that occurs or is discovered by the seller:

after close of escrow and within one year of ownership by the new buyer.
after close of escrow and within a reasonable amount of time thereafter.
after the contract is executed and prior to the close of escrow.
None of the preceding.

Question 54 of 119

In July, Easton bought Rothchild’s home through the listing broker, McGrew. In November when the first rain came, the tile roof leaked badly in many places. Easton sued Rothchild and McGrew for the cost of the new roof. Testimony in court showed that Rothchild mentioned the need for a new roof to McGrew, but McGrew did not mention it to Easton because “he had not asked about it.” What would most likely occur?

Easton would be successful in his suit against Rothchild who would be entitled to recover damages from McGrew.
Easton could recover from Rothchild, but McGrew is not liable to Rothchild.
McGrew is liable to Easton, but Rothchild is not.
Easton is not entitled to recover from either Rothchild or McGrew on the basis of caveat emptor.

Question 55 of 119

The Real Estate Transfer Disclosure Statement (TDS) provides information regarding the:

physical condition of the property.
properties chain of title.
agency relationships between the parties to the transaction.
commission split between real estate agents.

Question 56 of 119

What is the difference between the Real Estate Transfer Disclosure Statement and the Natural Hazard Disclosure Statement?

Only the seller is responsible for the TDS but the buyer is responsible for the Natural Hazard Disclosure Statement.
Only the buyer is responsible for the Natural Hazard Disclosure Statement but the seller is responsible for the TDS.
The buyer and seller are equally responsible for both statements.
The seller is responsible to check the map and make the natural hazard disclosure if necessary; on the other hand, the seller is responsible to disclose known facts only on the TDS.

Question 57 of 119

If more than one licensed real estate broker is acting as an agent in a transaction, who is responsible to assure the delivery of the Real Estate Transfer Disclosure Statement (TDS) to the buyer?

The broker who represents the seller.
The broker who has obtained the offer made by the buyer.
The broker who holds a valid Listing Agreement with the seller.
The seller is ultimately responsible no matter how many agents are involved.

Question 58 of 119

The Real Estate Transfer Disclosure Statement (TDS) is NOT required when the transfer involves:

transfer of a unit in a subdivision when the buyer has been given a public report.
a transfer ordered by a probate court in administration of an estate.
transfers by foreclosure sale after default.
All of the above.

Question 59 of 119

A buyer signs the purchase agreement and the seller accepts. The agent personally delivers acceptance of the offer to the buyer and also drops off the seller’s Transfer Disclosure Statement. How long after receiving the TDS does the buyer have to rescind the contract?

2 days
3 days
5 days
7 days

Question 60 of 119

In addition to the licensee’s duty to disclose matters known to the licensee, he/she also has the duty to:

provide legal advice in situations where there is not time to consult an expert.
make minor repairs to a property when absolutely necessary.
conduct a reasonable investigation to discover the true facts regarding the property.
provide tax advice regarding the transfer of real property.

Question 61 of 119

A seller (or seller’s agent) must give the buyer a separate “Natural Hazard Disclosure Statement” if the property lies within which of the following specified areas?

A special flood hazard area.
A very high fire hazard severity zone.
An earthquake fault zone.
All of the above.

Question 62 of 119

Seller Smith hires broker Jones to list his home. Neither have actual knowledge that the property is located in a hazardous earthquake, flood, or fire area, and for that reason they decide they will not make the Natural Hazard disclosure. After close of escrow the buyer checks with the county and finds out that a map exists that shows the property located within a particular hazard zone. Which of the following statements is correct?

Since the seller and seller’s agent had no actual knowledge that the property was located in a hazardous area, they cannot be held responsible.
Since the buyer had the opportunity to hire a third-party professional to investigate this matter, the seller and seller’s agent would be without fault.
Since there had never been a fire, flood, or earthquake in the area, the buyer has no recourse.
Since the map was available from the county where the property is located, the seller and his agent will be considered to have knowledge of the fact that the property is in a hazardous area.

Question 63 of 119

What should sellers do when they are uncertain if the property is located within one of the designated natural hazard areas?

Claim (in writing) that you have no actual knowledge that the property is located in a hazardous area.
Hire a third-party professional who specializes in natural hazard disclosures to find out if in fact the property is located within one of the specified hazard zones
Make a notation in the Real Estate Transfer Disclosure Statement that you have no actual knowledge that the property is located in a hazardous area.
None of the above.

Question 64 of 119

The seller is required to deliver the Homeowner’s Guide to Earthquake Safety to the buyer of any one-to-four unit property built prior to:

1953
1960
1968
1975

Question 65 of 119

The Alquist-Priolo Earthquake Fault Zone Act is concerned with:

all buildings in the entire state of California.
all residential buildings within an earthquake fault zone.
all buildings within an earthquake fault zone.
commercial buildings within an earthquake fault zone.

Question 66 of 119

What does the Homeowner’s Guide to Earthquake Safety discuss?

Underground gas lines, electrical lines, and water pipes.
Existing fault lines and there exact location.
The most common weaknesses that can cause earthquake damage to a home.
The various earthquake insurance policies.

Question 67 of 119

Who is responsible for disclosure of a Mello-Roos bond against the property?

seller
seller’s agent
buyer’s agent
both buyer’s and seller’s agent

Question 68 of 119

The listing agent fails to disclose that the property is in a Mello-Roos special tax district when the purchase contract is signed. Realizing his oversight, he delivers the required disclosure to the buyer in person the next day. Which of the following is correct regarding the buyer’s rights

The buyer has a three-day right of rescission after receipt of the disclosure
The buyer has no right to rescind if they did not specifically ask about the tax.
The listing agent is protected under the doctrine of “buyer beware.”
The failure to disclose the Mello-Roos tax lien has no bearing on the contract.

Question 69 of 119

Which of the following is considered trust funds?

Cash
A check used as a deposit.
A personal note made payable to the seller.
All of the above.

Question 70 of 119

A real estate licensee who accepts funds from others in connection with any transaction for which a license is required must place them in:

A neutral escrow depository.
The hands of the offeree or owner.
A trust account maintained by the licensee.
Any one of the above.

Question 71 of 119

When a real estate licensee accepts trust funds from his/her client in connection with the purchase of real property, the licensee must place these funds into the proper place:

By the next working day following receipt.
Within three business days following receipt.
By midnight of the current business day.
By midnight of the third business day following receipt.

Question 72 of 119

Commingling is one of the greatest single causes for loss of license. Which of the following would NOT be considered commingling?

Holding an uncashed deposit check after acceptance of an offer when directed to do so by the seller.
Cashing a deposit check (made out to the broker) and placing the money in the broker's safe, properly identified as being the deposit received from the buyer.
Depositing either cash or a check received as a deposit in the broker's personal account to be held until called for by the escrow officer.
Depositing money received by his/her client in the broker's personal account to pay miscellaneous expenses.

Question 73 of 119

A broker may store records in which of the following formats?

paper
electronic
microfiche
all of the above

Question 74 of 119

When broker Smith accepts a deposit check from a client, he forwards the check directly to escrow. According to trust fund record keeping requirements, which of the following is CORRECT?

It is NOT necessary to keep a record of trust funds received and forwarded to escrow.
It is NOT necessary to keep a record of trust funds not deposited into the trust account.
A record of trust funds received but not deposited to the trust fund bank account must be maintained.
Transaction folders maintained by a broker for each transaction showing the receipt and disposition of undeposited checks are acceptable alternatives to formal records.

Question 75 of 119

Which of the following defines the term “reconciliation?”

Comparing two or more sets of records to determine whether their balances agree.
Periodically emptying an account to obtain a zero balance.
Making sure debits always equal credits.
Checking the chronological sequence of trust fund receipts and disbursements.

Question 76 of 119

To assure the accuracy of trust fund accounting records, they must be reconciled at least:

Once-a-month.
Once every six months.
Once-a-year.
Once every two years.

Question 77 of 119

After reconciliation of the trust account, a broker finds funds in the account for which he cannot determine ownership. The broker should:

Use these funds to offset account shortages
Have a separate ledger for the unaccounted money and leave it in the trust account
Remove it to avoid commingling with other client's funds
Send it to the Department of Real Estate

Question 78 of 119

The potential penalties for a licensee’s violation of the laws concerning the handling of trust funds include:

Injunctions.
Suspension of license.
Revocation of license.
All of the above.

Question 79 of 119

In the event the commissioner has conducted an audit which reflects commingling or conversion of trust funds in excess of $10,000, the court may:

Imprison the licensee for not more than thirty (30) days.
Automatically revoke the violators license without a formal hearing.
Restrain the licensee from doing business pending a formal hearing.
Confiscate any and all commissions earned by that licensee during the preceding calendar year.

Question 80 of 119

How much of a broker’s personal funds may be contributed to a client’s trust fund bank account to offset any bank service charges?

$25.00, or the amount of charges by the bank
100
200
Nothing

Question 81 of 119

A real estate licensee applies for a license renewal, but the DRE does a background check and finds out that the licensee is delinquent on his child support payments. Which of the following is correct?

His license renewal will be denied until he is no longer in arrears with his child support
He will be given a temporary 150-day license, but if he still hasn't paid his child support in 150 days, his license will be suspended.
His license renewal will be denied and he will never be able to obtain a license even if he pays his child support obligation in full.
His license renewal will be denied and the DRE will turn his file over to the District Attorney.

Question 82 of 119

Which of the following deals with public access to buildings?

Fair Housing Act
Americans With Disabilities Act
Federal Housing Administration.
None of the above.

Question 83 of 119

The fees charged for property management are usually:

A flat fee and a percentage of gross rents
A percentage of net rents
Flat fee plus expenses
Flat rate

Question 84 of 119

In which of the following ways is fraud different from misrepresentation?

A misrepresentation is a deliberate attempt to deceive, while fraud is not.
Fraud is a deliberate attempt to deceive, while a misrepresentation is not.
There is no difference between fraud and misrepresentation.
A misrepresentation cannot result in discipline and fraud will always involve discipline.

Question 85 of 119

An estoppel is a:

plumbing fixture.
trade fixture.
notice to terminate tenancy.
document confirming tenant's rights and landlord's responsibilities.

Question 86 of 119

A broker has a management contract on an apartment building complex. He collects rents and deposits them in his trust fund bank account. He also acts as a broker on other transactions and puts buyer deposits in the same trust fund bank account. Which of the following is correct regarding this practice?

It is legal as long as he keeps records of beneficiary transactions.
It is legal as long as he is bonded for the maximum amount of the trust fund bank account.
It is legal as long as he does not deposit more than $30,000.
This is never legal.

Question 87 of 119

A broker owns many rental properties. He is selling one of the properties and the buyer gives him a check as a deposit. He should:

Place the deposit check and all rents in his trust account.
Open a separate trust account for rents and put the deposit check in his old trust account.
Have two separate trust accounts.
Not deposit either the rents or the deposit check in his trust account.

Question 88 of 119

A broker wanted to operate a real estate office under the fictitious name MLB Realty. Before operating under a fictitious name, the broker must:

publish the fictitious name in a newspaper of general circulation.
file under the Secretary of State.
obtain a DRE license bearing the fictitious business name.
file with the city as a fictitious business.

Question 89 of 119

A flood hazard exists when an area floods:

Once a year
Once in five years
More than twice in ten years
More than three times in ten years

Question 90 of 119

According to California Real Estate Law, an unlicensed person may be paid a finder’s fee:

As long as it is disclosed
At the conclusion of escrow
When it is given just to influence someone to do something
Never

Question 91 of 119

Which of the following is NOT included in Phase I of an Environmental Report?

Soil analysis
Interview neighbors
Aerial photos
Drainage patterns

Question 92 of 119

A developer of a condominium project placed a restriction in the CC&Rs saying that no condominium owner could place a “for sale” sign in front of their condominium until all of the original condominiums had been sold. Regarding this restriction:

It is unenforceable because it infringes on the owner’s right of alienation.
It is unenforceable because it infringes on the owner’s right of hypothecation.
It is unenforceable because it violates the owner’s right of free speech.
It is enforceable.

Question 93 of 119

It is important for a landlord to obtain all the necessary information on a rental application to allow the landlord to make a decision about renting to a particular person or to more than one person. A landlord thinks it is important to know whether or not a couple is married. Is it legal for the landlord to inquire whether or not a couple is married on the rental application?

Yes, as it may affect the couple’s ability to pay rent.
Yes, because this is a moral issue.
It is legal, but might be considered unethical.
No, this would be considered discrimination.

Question 94 of 119

A landlord is trying to evict a tenant and serves an eviction notice. Under what circumstances could a tenant remain in the property?

The tenant has not had hot water for months
Unlawful entry by the landlord
The lessor failed to repair a weak staircase
All of the above

Question 95 of 119

An advertisement is placed in a newspaper. According to the guidelines established by the Department of Housing and Urban Development, which of the following phrases would be considered discriminatory?

“Good neighborhood”
“Retiree’s dream house”
“Female roommate wanted”
“Chapel on site”

Question 96 of 119

Which of the following is NOT a poisonous gas?

radon
carbon dioxide
carbon monoxide
formaldehyde

Question 97 of 119

The best way to test for radon gas in a building is with a:

Charcoal radon test kit
Radon water test kit
Short term radon test
Spectrometer

Question 98 of 119

Sellers of target housing must disclose to potential purchasers the presence of any known lead-based paint hazards that affect homes built prior to:

1948
1978
1996
2006

Question 99 of 119

What is required of a pre-paid rental service when they plan to move offices?

the company must inform clients of the new address before the move
the company must inform the clients of the new address within 10 days of the move
they must inform the clients within 5 days
they must inform the clients within a month.

Question 100 of 119

A Brownfield property that has been left vacant or is underutilized is most likely:

toxic and contaminated.
taken for a freeway.
depleted for crop use because the soil has been depleted after overuse.
overpriced.

Question 101 of 119

The Williamson Act provides helps owners of farmland and open-space land in the form of:

tax relief.
regulatory relief
water relief
building permit relief

Question 102 of 119

How long must land be maintained under a Williamson Act contract?

10 years
15 years
20 years
25 years

Question 103 of 119

A Broker must have a written broker-salesperson agreement with each of his/her:

office employees.
licensees.
janitors.
affiliates.

Question 104 of 119

The maximum security deposit allowed by law for an unfurnished rental is:

1 times the rent
twice the rent amount
3 times the rent
1 ½ times the rent

Question 105 of 119

The maximum security deposit allowed by law for a furnished rental is:

100
1 times the rent
2 times the rent
3 times the rent

Question 106 of 119

A landlord CANNOT use a security deposit towards which of the following:

Remodeling the property
Repair damages caused by the tenant, other than normal wear and tear
Unpaid rent
Replacing lost keys and garage door openers

Question 107 of 119

When a tenant leaves the premise with no intention to return, it is called:

abandonment.
constructive eviction.
conversion.
surrender.

Question 108 of 119

What percent of home buyers search online before contacting a real estate agent?

60
70
80
90

Question 109 of 119

What happens if you fail to renew your license on-time?

You must reapply and retake the state examination.
You have two years to submit your renewal application and late fees.
You fall into a two year grace period but may continue doing business.
You must complete a 3-hour course in Ethics but may continue doing business.

Question 110 of 119

All of the following are TRUE about a Certified Property Manager (CPM) EXCEPT:

The CPM designation can be given to an individual or a company.
Must be affiliated with the NATIONAL ASSOCIATION OF REALTORS®.
Have 3 years of qualifying real estate management experience as defined by IREM.
Pass the CPM Certification exam.

Question 111 of 119

A buyer wants to know why the demographics have changed in an area causing home prices to decline. The buyer wants to know if it is due to a certain race moving in. What is the best way to answer?

Disclose whatever other information you have about the area.
Tell the buyer to go online and do their own research.
Tell the buyer you will get back to them with the information.
Tell the buyer you don't know anything about this area.

Question 112 of 119

What is the Latin word for “buyer beware?”

ad victoriam
caveat emptor
nolo contendere
ad honorem

Question 113 of 119

The seller of a home died of AIDS in the hospital four days before the sale of the home. Which of the following is correct regarding the broker’s obligated to disclose this to the buyer?

The broker is only required to disclose if the buyer asks.
The broker is not obligated to disclose whatsoever if the death was AIDS-related.
The broker is only required to disclose if the death occurred on the premises
The broker is only required to disclose that a prior occupant was afflicted with AIDS, not the death.

Question 114 of 119

A landlord must give the lessee (tenant) a copy of the lease within:

5 days
15 days
25 days
30 days

Question 115 of 119

What is the landlord’s responsibility if a tenant notices that some construction in the building may contain asbestos?

The landlord is required to notify the owner in writing.
There are no state laws requiring a landlord to provide asbestos disclosures.
The landlord is required to notify other tenants of the presence of asbestos.
The landlord must provide tenants with alternate living accommodations.

Question 116 of 119

A Bill of Sale is required to transfer personal property if the property sold for more than:

500
1500
2000
2500

Question 117 of 119

Which entity issues a permit for a subdivision in a coastal community?

California Coastal Commission
California Department of Real Estate
California Department of Conservation
California Department of Parks and Recreation

Question 118 of 119

A corporation has their broker’s license under one of its corporate officers. A non-licensed corporate-officer can do all of the following EXCEPT:

follow the instructions of other corporate officers
sell corporate owned properties with no consideration, commission or profit
secure listings and negotiate sales on his/her own behalf
transfer his/her broker-officer status to another corporation

Question 119 of 119

What is the definition of an MLS?

Management Listing Service
Mortgage Licensing System
Multiple Listing Service
Management Loan Service

California Exam Prep

Practice of Real Estate and Mandated Disclosures

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