Chp. 14 Quiz - Contract Preparation

Question 1

An attorney review clause

Answer 1

states that the contract is subject to the approval of each of the client’s attorneys.

Question 2

Which one of the following documents is least like a binder?

Answer 2

Property disclosure statement

Question 3

Broker Sara completes a preprinted sales contract. The contract was not approved by the local Real Estate Board nor the Bar Association. Which statement is TRUE?

Answer 3

She can use this contract as long as it contains an attorney review clause.

Question 4

All new construction requires

Answer 4

A certificate of occupancy

Question 5

Which statement best defines a Certificate of Occupancy?

Answer 5

A certificate issued by a local building department that indicates that the building is in proper condition to be occupied.

Question 6

If an attorney makes changes to an offer, what action should follow?

Answer 6

All parties to the contact must initial the changes.

Question 7

Which of the following is one of the purposes of the Lawyers’ Fund?

Answer 7

To reimburse clients for money that was misused by their attorney

Question 8

Tim and Laura signed a sales contract with a mortgage contingency clause. They do not try to get a loan, and when the deadline for loan approval draws near, they tell their agent they couldn’t get a loan and therefore cannot go ahead with the purchase. Which statement is TRUE?

Answer 8

Tim and Laura have not acted in good faith; so they cannot get their earnest money back.

Question 9

In downstate New York, who customarily holds the down payment?

Answer 9

The seller’s attorney

Question 10

If a real estate salesperson prepares a contract without using a preprinted form, the salesperson may

Answer 10

Be disciplined by the State licensing division.
Be convicted of a misdemeanor.
Be sued by the client.
[All of the above]

Question 11

How does the Lawyer’s Fund help legal clients?

Answer 11

The Fund reimburses losses caused by attorney misconduct.

Question 12

Broker Amanda prepares a sales contract, collects the earnest money and deposits it in her business account. Which statement is TRUE?

Answer 12

Amanda has illegally commingled the earnest money with her own money.

Question 13

Who typically holds the down payment?

Answer 13

The broker

Question 14

Before a buyer signs a purchase offer, he or she should be given all of the following documents EXCEPT

Answer 14

The title search report.

Question 15

A binder might be called any of the following EXCEPT

Answer 15

A closing statement

Question 16

Broker Norm prints and completes lease agreements to which he is not a party. What can be said about Norm’s actions?

Answer 16

Brokers may not complete leases to which they are not a party.

Question 17

If the buyer defaults on the sales contract, what usually happens to the down payment already paid?

Answer 17

It becomes liquidated damages to cover the default.

Question 18

In New York, the practice of law by a non-attorney is

Answer 18

a misdemeanor.