Chapter 16: California Real Estate License Law

Question 1

All transactional documentation for listings, purchase and sale agreements, property management activities, exchanges, and trust account records must be retained for a period of:

Answer 1

Three years 
(Documentation and trust fund records must be retained for three years. The exception is mortgage loan disclosure statements and real property security statements, which must be retained for four years)

Question 2

If a salesperson quits or is discharged by his or her broker, the broker is required to return the salesperson’s license within:

Answer 2

Three Business days

A license must be returned to the salesperson within three business days

Question 3

Trust funds are best defined as:

Answer 3

anything of value to be held for a client or customer.

Trust funds are anything of value given to a broker to hold on behalf of or for the benefit of another

Question 4

A broker may be disciplined for all of the following EXCEPT:

Answer 4

Placing a definite expiration date in an exclusive listing agreement
(A listing agreement must have a definite expiration date)

Question 5

The commission rate to be given by a seller as set forth in the listing agreement is:

Answer 5

Negotiated between the broker and seller
(Commission rates are negotiated between a broker and the seller. Any discussion that commission rates are determined in any other manner is a violation of antitrust law)

Question 6

In California, real estate law is enforced by the:

Answer 6

Real Estate Commissioner.

The Real Estate Commissioner is empowered to enforce the real estate law

Question 7

A real estate license entitles a licensee to represent a client in:

Answer 7

All of the above

property management activity, business opportunities, loan brokerage

Question 8

A licensee can advertise a listed property by means of a blind ad when:

Answer 8

The licensee can never distribute a blind advertisement
(A blind advertisement is one that does not identify the advertiser as a licensee. A blind advertisement is never permitted)

Question 9

Commingling is:

Answer 9

Depositing trust funds with personal or business funds.
(Commingling occurs when trust funds are deposited into a personal or business account or when personal or business funds are deposited into a trust account. Conversion is the actual misuse of trust funds by converting them to the broker’s or brokerage’s own use)

Question 10

Irma Craft, a real estate salesperson for Luckless Realty, has an arrangement with Rid X Pest Control Services to receive a $25.00 referral fee for any customer she refers to Rid X. This arrangement is:

Answer 10

grounds for disciplinary action by the Commissioner.
(A licensee may never receive a referral fee from a pest control company, escrow company, title insurer, or home warranty company)

Question 11

The first renewal of a real estate license requires completion of __________ hours of continuing education during the previous four years.

Answer 11

45
45 hours of continuing education completed within the previous four years are required for first renewal of a salesperson or broker real estate license.

Question 12

Larry is a broker representing Mark Wood in the sale of his house. Mark is in Europe for two weeks and cannot be reached. Kellie Jones, the buyer of the property, contacts Larry to advise him that the closing needs to be extended for one week. Larry, knowing that Mark will benefit from the extension because he will not be given possession of the house he has purchased until his sale closes, signs Mark’s name to an addendum extending the closing.
Larry has:

Answer 12

Exceeded the scope of his authority and violated real estate law.
(A licensee can never alter any term of a contractual agreement without the express written authority of a principal)

Question 13

The Real Estate Fund and its Consumer Recovery Account is funded by:

Answer 13

Real estate license fees

Twelve percent of the real estate license fees is deposited into the Consumer Recovery Account

Question 14

A Real Estate Commissioner candidate must have a minimum of five years real estate experience within the last __________ years to be appointed by the Governor.

Answer 14

Ten
(A Real Estate Commissioner candidate must have a minimum of five years real estate experience within the last ten years to be appointed by the Governor)

Question 15

In California, a real estate license must be renewed every:

Answer 15

Four years

California real estate licenses are valid for four years.

Question 16

To qualify for a broker’s license, the applicant must:

Answer 16

complete eight statutorily required college-level courses.

One of the requirements for a California real estate broker is completion of eight designated courses

Question 17

A licensee hired by a broker to engage in real estate activity on behalf of the broker must:

Answer 17

All of the above
(be employed under the terms of a written agreement that documents their employment relationship.never infer to a customer or client that they are in business for themselves.receive all compensation from the broker.)

Question 18

California real estate laws are found in the:

Answer 18

Business and Professions Code.

The California real estate laws are found in the California Business and Professions Code.

Question 19

Copies of an offer to purchase a property must be given to the offeror:

Answer 19

Immediately upon obtaining the offeror’s signature on the offer.
(When any document related to real estate activity is presented for signature, real estate law requires that a copy of the document be given to the signatory at the time of signing. Procedures must be in place to ensure the delivery of copies at the point of signing listing agreements, purchase and sale agreements, contract addenda, property management agreements, exchange agreements, lease agreements, etc)