National Practice of Real Estate

Question 1

Most states require which of these to be included on all real estate advertising?

A)
Salesperson’s or broker associate’s name and license number
B)
Salesperson’s phone number
C)
Brokerage firm’s name
D)
Principal broker’s name

Answer 1

Most states require which of these to be included on all real estate advertising?

A)
Salesperson’s or broker associate’s name and license number
Incorrect Answer
B)
Salesperson’s phone number
Incorrect Answer
C)
Brokerage firm’s name
Correct Answer
D)
Principal broker’s name
Incorrect Answer
Explanation
Ads required the brokerage firm name as a minimum requirement so the ad can be traced back to the brokerage if there is an issue.

Reference: Practice of Real Estate > Advertising and Technology

Question 2

After a particularly challenging transaction finally closes, a client gives the salesperson a check for $500 “for all your extra work.” Which of these statements is TRUE?

A)
The salesperson may accept the check if she deposits it immediately in a special escrow account.
B)
The salesperson may receive compensation only from her broker.
C)
While such compensation is irregular, it is appropriate for the salesperson to accept the check.
D)
The salesperson may accept the check, but the salesperson’s broker is entitled to 80% of the check.

Answer 2

After a particularly challenging transaction finally closes, a client gives the salesperson a check for $500 “for all your extra work.” Which of these statements is TRUE?

A)
The salesperson may accept the check if she deposits it immediately in a special escrow account.
Incorrect Answer
B)
The salesperson may receive compensation only from her broker.
Correct Answer
C)
While such compensation is irregular, it is appropriate for the salesperson to accept the check.
Incorrect Answer
D)
The salesperson may accept the check, but the salesperson’s broker is entitled to 80% of the check.
Incorrect Answer
Explanation
Most state statutes require that compensation for real estate brokerage activities be paid to licensed salespersons only by their own broker for work on any given transaction. The salesperson in this case may not receive a check directly from the client.

Reference: Practice of Real Estate > Supervision Practices

Question 3

To be classified by the Internal Revenue Service as an independent contractor, a real estate salesperson may receive

A)
company-provided health insurance if negotiated with the broker.
B)
a company-provided automobile if negotiated with the broker.
C)
commissions on transactions as negotiated with the broker.
D)
a monthly salary or hourly wage as negotiated with the broker.

Answer 3

To be classified by the Internal Revenue Service as an independent contractor, a real estate salesperson may receive

A)
company-provided health insurance if negotiated with the broker.
Incorrect Answer
B)
a company-provided automobile if negotiated with the broker.
Incorrect Answer
C)
commissions on transactions as negotiated with the broker.
Correct Answer
D)
a monthly salary or hourly wage as negotiated with the broker.
Incorrect Answer
Explanation
An independent contractor may not receive any employee benefits, such as health insurance or a company-provided automobile. An independent contractor must not be treated as an employee for federal tax purposes by receiving a monthly salary or hourly wage.

Reference: Practice of Real Estate > Supervision Practices

Question 4

A broker would have the right to dictate which of these to an independent contractor?

A)
Number of hours the person would have to work
B)
Sales meetings the person would need to attend
C)
Compensation the person would receive
D)
Work schedule the person would have to follow

Answer 4

A broker would have the right to dictate which of these to an independent contractor?

A)
Number of hours the person would have to work
Incorrect Answer
B)
Sales meetings the person would need to attend
Incorrect Answer
C)
Compensation the person would receive
Correct Answer
D)
Work schedule the person would have to follow
Incorrect Answer
Explanation
Brokers may dictate the compensation their independent contractors will receive for work not yet done, but they may not dictate working schedules or sales meetings to be attended. The Internal Revenue Service (IRS) would most likely classify persons employed with defined work schedules, including the numbers of hours worked, and required sales meetings as employees rather than independent contractors for income tax purposes.

Reference: Practice of Real Estate > Supervision Practices

Question 5

A real estate brokerage firm used a third-party email service to send an unsolicited email to announce a reduced price on a listed property. A person who received the email chose to opt-out from receiving additional emails from the licensee. The opt-out request must be honored within

A)
30 days.
B)
5 days.
C)
2 days.
D)
10 days.

Answer 5

A real estate brokerage firm used a third-party email service to send an unsolicited email to announce a reduced price on a listed property. A person who received the email chose to opt-out from receiving additional emails from the licensee. The opt-out request must be honored within

A)
30 days.
Incorrect Answer
B)
5 days.
Incorrect Answer
C)
2 days.
Incorrect Answer
D)
10 days.
Correct Answer
Explanation
The CAN-SPAM Act requires that requests to opt-out of unsolicited emails must be honored within 10 business days. The Act also requires that the method to opt out be prominent within the email, and that the receiver be able to opt out from receiving future emails for at least 30 days after the message is sent.

Reference: Practice of Real Estate > Advertising and Technology

Question 6

Emily Chan is currently using heroin but has a heartfelt desire to stop using illegal drugs. Jake Brown, a convicted drug dealer, is a recovering heroin addict who has been clean and sober for 10 years. Both apply for an available apartment unit. Under the federal Fair Housing Act’s handicap/disability classification, the landlord

A)
can reject both applications.
B)
can reject Emily Chan’s application.
C)
can reject Jake Brown’s application.
D)
must accept and consider both applications.

Answer 6

Emily Chan is currently using heroin but has a heartfelt desire to stop using illegal drugs. Jake Brown, a convicted drug dealer, is a recovering heroin addict who has been clean and sober for 10 years. Both apply for an available apartment unit. Under the federal Fair Housing Act’s handicap/disability classification, the landlord

A)
can reject both applications.
Correct Answer
B)
can reject Emily Chan’s application.
Incorrect Answer
C)
can reject Jake Brown’s application.
Incorrect Answer
D)
must accept and consider both applications.
Incorrect Answer
Explanation
The landlord can reject both applications. An alcoholic or a drug addict who is in recovery is protected under the federal Fair Housing Act’s handicap/disability classification. However, federal fair housing laws do not protect people who are either current users of illegal substances or have been convicted of distribution (sale) of illegal substances.

Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 7

Which of these conditions does NOT create a stigmatized property that may or may not be disclosed under the laws of some states?

A)
A murder occurred on the property.
B)
The owner of the property has AIDS.
C)
The property was the site of gang-related activity.
D)
A suicide occurred on the property.

Answer 7

Which of these conditions does NOT create a stigmatized property that may or may not be disclosed under the laws of some states?

A)
A murder occurred on the property.
Incorrect Answer
B)
The owner of the property has AIDS.
Correct Answer
C)
The property was the site of gang-related activity.
Incorrect Answer
D)
A suicide occurred on the property.
Incorrect Answer
Explanation
All the other events may stigmatize a property and may or may not allow disclosure to a prospective buyer under state laws. Under federal fair-housing laws, persons with AIDS are considered handicapped and members of a protected class. The fact that an occupant of a property has AIDS does not require disclosure to a prospective buyer.

Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 8

A salesperson finally concluded some extremely difficult negotiations resulting in the sale of a listed parcel of land. For all her extra efforts, she can legally receive a performance bonus directly from

A)
her principal broker.
B)
the seller.
C)
the buyer.
D)
no one.

Answer 8

A salesperson finally concluded some extremely difficult negotiations resulting in the sale of a listed parcel of land. For all her extra efforts, she can legally receive a performance bonus directly from

A)
her principal broker.
Correct Answer
B)
the seller.
Incorrect Answer
C)
the buyer.
Incorrect Answer
D)
no one.
Incorrect Answer
Explanation
Bonuses and commissions are paid directly to the broker, who then pays the salesperson. The salesperson may not receive commissions or bonuses from anyone other than her principal broker.

Reference: Practice of Real Estate > Supervision Practices

Question 9

People suffering from AIDS and HIV are protected under which of the following classes in the federal Fair Housing Act of 1968, as amended?

A)
Familial status
B)
Handicap/disability
C)
Infectious disease
D)
Sex

Answer 9

People suffering from AIDS and HIV are protected under which of the following classes in the federal Fair Housing Act of 1968, as amended?

A)
Familial status
Incorrect Answer
B)
Handicap/disability
Correct Answer
C)
Infectious disease
Incorrect Answer
D)
Sex
Incorrect Answer
Explanation
People suffering from AIDS or HIV are protected under the handicap/disability classification. Infectious disease is not a protected class under the federal Fair Housing Act. The protected classes are race, religion, color, national origin, sex (added in 1974), familial status (added in 1988), and handicap/disability (added in 1988).

Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 10

The following ad appeared in the newspaper: “For sale: 4 BR brick home; Redwood School District; excellent Elm Street location; short walk to St. John’s Church and right on the bus line. Move-in condition; priced to sell.” Which statement is TRUE?

A)
The fair housing laws do not apply to newspaper advertising.
B)
The ad should state that the property is available to families with children.
C)
The ad describes the property for sale and is very appropriate.
D)
The ad should not mention St. John’s Church.

Answer 10

The following ad appeared in the newspaper: “For sale: 4 BR brick home; Redwood School District; excellent Elm Street location; short walk to St. John’s Church and right on the bus line. Move-in condition; priced to sell.” Which statement is TRUE?

A)
The fair housing laws do not apply to newspaper advertising.
Incorrect Answer
B)
The ad should state that the property is available to families with children.
Incorrect Answer
C)
The ad describes the property for sale and is very appropriate.
Incorrect Answer
D)
The ad should not mention St. John’s Church.
Correct Answer
Explanation
Reference to a nearby church implies religious preference and violates Department of Housing and Urban Development (HUD) advertising regulations designed to enforce the federal Fair Housing Act. The ad does not have to state that the property is available to families with children or to any protected class as long as the ad does not appear to discriminate against a particular protected class.

Reference: Practice of Real Estate > Advertising and Technology

Question 11

During a job interview, a principal broker tells a salesperson that she will work for the brokerage firm as an independent contractor. As an independent contractor, what can the salesperson expect from her work with the broker?

A)
She must attend weekly sales meetings.
B)
She may participate in the firm’s health insurance plan.
C)
She will be required to work a minimum of 40 hours per week.
D)
At least 90% of her income will be based on sales production.

Answer 11

During a job interview, a principal broker tells a salesperson that she will work for the brokerage firm as an independent contractor. As an independent contractor, what can the salesperson expect from her work with the broker?

A)
She must attend weekly sales meetings.
Incorrect Answer
B)
She may participate in the firm’s health insurance plan.
Incorrect Answer
C)
She will be required to work a minimum of 40 hours per week.
Incorrect Answer
D)
At least 90% of her income will be based on sales production.
Correct Answer
Explanation
To be considered an independent contractor under Internal Revenue Service (IRS) rules, at least 90% of the salesperson’s income must be based on sales production. A broker may not require a minimum number of weekly hours or mandate sales meetings for independent contractors but may make such requirements for employees of the firm.

Reference: Practice of Real Estate > Supervision Practices

Question 12

There are no exceptions to fair housing law for

A)
racial discrimination.
B)
retirement communities.
C)
religious organizations.
D)
private clubs.

Answer 12

There are no exceptions to fair housing law for

A)
racial discrimination.
Correct Answer
B)
retirement communities.
Incorrect Answer
C)
religious organizations.
Incorrect Answer
D)
private clubs.
Incorrect Answer
Explanation
The case of Jones v. Mayer in 1968 upheld the Civil Rights Act of 1866 and prohibits racial discrimination without exception. Private clubs, religious organizations, and retirement communities are not exempt from fair housing laws prohibitions against housing discrimination based on race.

Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 13

A salesperson has been trying for weeks to list a spectacular house for sale. The homeowners tell the salesperson that a competing company will charge a commission rate that is 2% lower than the commission rate charged by the salesperson’s brokerage firm. In order to get the listing, the salesperson should tell the owner that

A)
the competing firm cannot provide good services because it charges less commission.
B)
salespersons in the area will not show the competing firm’s listings because of its lower commission rates.
C)
his company provides excellent services to market its sellers’ properties.
D)
most brokers in the area charge a standard rate of commission.

Answer 13

A salesperson has been trying for weeks to list a spectacular house for sale. The homeowners tell the salesperson that a competing company will charge a commission rate that is 2% lower than the commission rate charged by the salesperson’s brokerage firm. In order to get the listing, the salesperson should tell the owner that

A)
the competing firm cannot provide good services because it charges less commission.
Incorrect Answer
B)
salespersons in the area will not show the competing firm’s listings because of its lower commission rates.
Incorrect Answer
C)
his company provides excellent services to market its sellers’ properties.
Correct Answer
D)
most brokers in the area charge a standard rate of commission.
Incorrect Answer
Explanation
The other possible statements imply that there is a standard commission rate among competing brokers. Antitrust laws prohibit price-fixing, the practice of setting prices for services rather than letting competition in the open market establish those prices. The salesperson should only focus on what his company can offer. Antitrust laws also forbid brokers from “boycotting” other brokers because of their fees.

Reference: Practice of Real Estate > Risk Management/Supervision

Question 14

A salesperson’s written contract with her broker specifies that he is not an employee. In the last year, just less than half of the salesperson’s income from real estate activity came from sales commissions. The remainder was based on an hourly wage paid by the broker. Using these facts, it is MOST likely that the Internal Revenue Service (IRS) would classify the salesperson as which of these for federal income tax purposes?

A)
Self-employed
B)
Part-time real estate salesperson
C)
Employee
D)
Independent contractor

Answer 14

A salesperson’s written contract with her broker specifies that he is not an employee. In the last year, just less than half of the salesperson’s income from real estate activity came from sales commissions. The remainder was based on an hourly wage paid by the broker. Using these facts, it is MOST likely that the Internal Revenue Service (IRS) would classify the salesperson as which of these for federal income tax purposes?

A)
Self-employed
Incorrect Answer
B)
Part-time real estate salesperson
Incorrect Answer
C)
Employee
Correct Answer
D)
Independent contractor
Incorrect Answer
Explanation
Because her earnings were more than half in noncommissions, the IRS would not see her as a self-employed independent contractor and could treat her as an employee.

Reference: Practice of Real Estate > Supervision Practices

Question 15

The mixing of trust funds with a broker’s personal funds is

A)
commingling.
B)
permitted in offices with fewer than three agents.
C)
legal in most states.
D)
conversion.

Answer 15

The mixing of trust funds with a broker’s personal funds is

A)
commingling.
Correct Answer
B)
permitted in offices with fewer than three agents.
Incorrect Answer
C)
legal in most states.
Incorrect Answer
D)
conversion.
Incorrect Answer
Explanation
Commingling, or mixing of funds, is illegal, regardless of the size of an office. Conversion occurs when brokers use escrow funds for their own use.

Reference: Practice of Real Estate > Supervision Practices

Question 16

A broker has established the following office policy: “All listings taken by any salesperson associated with this real estate brokerage must include compensation based on a 10% commission. No lower commission rate is acceptable.” If the broker attempts to impose this uniform commission requirement, which statement is TRUE?

A)
The salespeople associated with the brokerage will not be bound by the requirement and may negotiate any commission rate they choose.
B)
The broker must present the uniform commission policy to the local professional association for approval.
C)
A homeowner may sue the broker for violating the antitrust law’s prohibition against price-fixing.
D)
The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.

Answer 16

A broker has established the following office policy: “All listings taken by any salesperson associated with this real estate brokerage must include compensation based on a 10% commission. No lower commission rate is acceptable.” If the broker attempts to impose this uniform commission requirement, which statement is TRUE?

A)
The salespeople associated with the brokerage will not be bound by the requirement and may negotiate any commission rate they choose.
Incorrect Answer
B)
The broker must present the uniform commission policy to the local professional association for approval.
Incorrect Answer
C)
A homeowner may sue the broker for violating the antitrust law’s prohibition against price-fixing.
Incorrect Answer
D)
The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.
Correct Answer
Explanation
Antitrust violations occur only if price-fixing exists among competing firms. Brokers have the right to set commissions within their own firm. The broker’s policy is not an antitrust violation. Salespeople who wish to continue with that broker can be required to comply with the policy.

Reference: Practice of Real Estate > Risk Management/Supervision

Question 17

Brokerage commissions charged to sellers in listing contracts for the sale of real property are MOST typically set by

A)
negotiation between local brokerage firms.
B)
negotiations between the state commission and the principal broker.
C)
the principal broker and then negotiated with the seller.
D)
the brokerage firm and board of REALTORS®.

Answer 17

Brokerage commissions charged to sellers in listing contracts for the sale of real property are MOST typically set by

A)
negotiation between local brokerage firms.
Incorrect Answer
B)
negotiations between the state commission and the principal broker.
Incorrect Answer
C)
the principal broker and then negotiated with the seller.
Correct Answer
D)
the brokerage firm and board of REALTORS®.
Incorrect Answer
Explanation
The principal broker has the right to set the minimum commission for the firm, and then the broker associates and salespeople can negotiate the level of commission they need to complete the job as created by the listing contract. The commission, local firms, and the board of REALTORS® may not be a party to the firm’s commission decision or negotiations.

Reference: Practice of Real Estate > Supervision Practices

Question 18

A firm’s broker associate and a salesperson have been found guilty of violating the state real estate license law and have had their real estate licenses revoked. In this case, the principal broker

A)
might have to make a claim against his errors and omissions (E & O) insurance.
B)
should not be concerned because broker associates do not need to be supervised.
C)
may be found guilty of improper supervision.
D)
would most likely have to pay a civil fine in addition to having his license revoked.

Answer 18

A firm’s broker associate and a salesperson have been found guilty of violating the state real estate license law and have had their real estate licenses revoked. In this case, the principal broker

A)
might have to make a claim against his errors and omissions (E & O) insurance.
Incorrect Answer
B)
should not be concerned because broker associates do not need to be supervised.
Incorrect Answer
C)
may be found guilty of improper supervision.
Correct Answer
D)
would most likely have to pay a civil fine in addition to having his license revoked.
Incorrect Answer
Explanation
A principal broker is responsible for supervising all licensees in the firm. E & O insurance would not cover this type of issue. Civil fines are created in civil court not through a hearing at a real estate commission.

Reference: Practice of Real Estate > Risk Management/Supervision

Question 19

A principal broker hires a salesperson as an employee of the brokerage firm. The employment contract between the broker and the salesperson will most likely include all of these EXCEPT

A)
the broker will withhold federal income taxes and Social Security taxes from the salesperson’s paycheck.
B)
the salesperson is entitled to the firm’s health insurance plan.
C)
the salesperson is responsible for direct payment of all income taxes and Social Security contributions from each paycheck.
D)
the salesperson attends weekly sales meeting.

Answer 19

A principal broker hires a salesperson as an employee of the brokerage firm. The employment contract between the broker and the salesperson will most likely include all of these EXCEPT

A)
the broker will withhold federal income taxes and Social Security taxes from the salesperson’s paycheck.
Incorrect Answer
B)
the salesperson is entitled to the firm’s health insurance plan.
Incorrect Answer
C)
the salesperson is responsible for direct payment of all income taxes and Social Security contributions from each paycheck.
Correct Answer
D)
the salesperson attends weekly sales meeting.
Incorrect Answer
Explanation
A broker is responsible for withholding federal income taxes and Social Security contributions from an employee’s paycheck. The broker may require that the employee attend sales meeting and may include the employee in the firm’s benefits, including a health insurance plan. A salesperson employed as an independent contractor is responsible for direct payment of all federal taxes and any required state taxes.

Reference: Practice of Real Estate > Supervision Practices

Question 20

Federal fair housing law of 1988 added additional protected classes. Landlords under this law must rent to those who are protected under the law. As of 1988, all of these are protected EXCEPT

A)
a woman diagnosed was having HIV/AIDS.
B)
a user of illegal drugs currently in a rehabilitation program.
C)
a woman convicted of sexual molestation.
D)
a woman who has three children under five and is expecting a fourth wants to rent a two-bedroom unit.

Answer 20

Federal fair housing law of 1988 added additional protected classes. Landlords under this law must rent to those who are protected under the law. As of 1988, all of these are protected EXCEPT

A)
a woman diagnosed was having HIV/AIDS.
Incorrect Answer
B)
a user of illegal drugs currently in a rehabilitation program.
Incorrect Answer
C)
a woman convicted of sexual molestation.
Correct Answer
D)
a woman who has three children under five and is expecting a fourth wants to rent a two-bedroom unit.
Incorrect Answer
Explanation
Sexual molesters are not protected under any federal law. The 1988 law added protections for disability and familial status. Having HIV/AIDS or being an illegal drug user in rehabilitation is covered under disability in the fair housing law. Typically, children under five are not considered as part of occupancy requirements, so the landlord would need to rent to the family because they are protected under familial status.

Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 21

The act of directing homeseekers toward or away from particular areas either to maintain or to change the character of the neighborhood is

A)
legal.
B)
blockbusting.
C)
steering.
D)
redlining.

Answer 21

The act of directing homeseekers toward or away from particular areas either to maintain or to change the character of the neighborhood is

A)
legal.
Incorrect Answer
B)
blockbusting.
Incorrect Answer
C)
steering.
Correct Answer
D)
redlining.
Incorrect Answer
Explanation
A person who guides prospects either toward or away from certain neighborhoods based on racial, ethnic, religious, or similar concerns is guilty of steering. This practice is outlawed by the federal Fair Housing Act of 1968 and is not legal. Whether it is done to promote housing segregation or integration is immaterial. Redlining is the illegal practice of refusing to make a mortgage loan or restricting the number of loans in a particular area. Blockbusting is inducing panic selling by claiming that the entry of a protected class will have some sort of negative impact on property values.

Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 22

A broker assigns a salesperson to work open houses in a new subdivision for a developer that the firm represents. After two months, the salesperson’s work has resulted in sales above the developer’s expectations, and he offers to pay the salesperson a $1,000 bonus. The salesperson may receive the bonus payment

A)
from the developer if the bonus is placed in the broker’s trust account.
B)
from the developer if permission is granted from the state regulatory agency.
C)
only if paid after the salesperson’s assignment to the subdivision ends.
D)
only if paid from her principal broker.

Answer 22

A broker assigns a salesperson to work open houses in a new subdivision for a developer that the firm represents. After two months, the salesperson’s work has resulted in sales above the developer’s expectations, and he offers to pay the salesperson a $1,000 bonus. The salesperson may receive the bonus payment

A)
from the developer if the bonus is placed in the broker’s trust account.
Incorrect Answer
B)
from the developer if permission is granted from the state regulatory agency.
Incorrect Answer
C)
only if paid after the salesperson’s assignment to the subdivision ends.
Incorrect Answer
D)
only if paid from her principal broker.
Correct Answer
Explanation
Salespersons may not receive commissions or bonus payments from anyone other than their principal broker. The salesperson may receive the bonus payment if the developer pays it directly to the broker, who then gives all or part of the bonus to the salesperson, depending on the salesperson’s employment agreement with the broker. Payments of this type would be deposited into the firm’s operations account, not put into a trust account.

Reference: Practice of Real Estate > Supervision Practices

Question 23

The Civil Rights Act of 1866 prohibits any limitation of property rights based on

A)
handicap.
B)
race.
C)
sex.
D)
religion.

Answer 23

The Civil Rights Act of 1866 prohibits any limitation of property rights based on

A)
handicap.
Incorrect Answer
B)
race.
Correct Answer
C)
sex.
Incorrect Answer
D)
religion.
Incorrect Answer
Explanation
The federal government’s effort to guarantee equal housing opportunities to all U.S. citizens began with the passage of the Civil Rights Act of 1866. This law prohibits any discrimination based on race. Religion, sex, and handicap are protected classes under federal fair housing laws enacted in 1968 and 1988.

Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 24

Why is the Civil Rights Act of 1866 unique?

A)
It adds recipient of public assistance as a protected class.
B)
It contains “choose your neighbor” provisions.
C)
It has been broadened to protect seniors.
D)
It provides no exceptions that would permit racial discrimination.

Answer 24

Why is the Civil Rights Act of 1866 unique?

A)
It adds recipient of public assistance as a protected class.
Incorrect Answer
B)
It contains “choose your neighbor” provisions.
Incorrect Answer
C)
It has been broadened to protect seniors.
Incorrect Answer
D)
It provides no exceptions that would permit racial discrimination.
Correct Answer
Explanation
Unlike other exemptions permitted under the federal Fair Housing Act of 1968, the Civil Rights Act of 1866 allows no exceptions due to race. Recipients of public assistance are not protected classes under any fair housing law but are protected under the Equal Credit Opportunity Act (ECOA). Senior housing protections are in the Fair Housing Act of 1988, not the Civil Right Act of 1866. No fair housing laws contain a “choose your neighbor” provision.

Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 25

Two salespersons both work for the same real estate firm. One afternoon they agree to divide their town into a northern region and a southern region. One will handle listings in the northern region, and the other will handle listings in the southern region. Their agreement A) violates the Sherman Antitrust Act and makes the salespersons liable for triple damages. B) is an illegal boycott of other salespeople in their office. C) constitutes illegal price-fixing. D) does not violate antitrust laws.

Answer 25

Two salespersons both work for the same real estate firm. One afternoon they agree to divide their town into a northern region and a southern region. One will handle listings in the northern region, and the other will handle listings in the southern region. Their agreement A) violates the Sherman Antitrust Act and makes the salespersons liable for triple damages. Incorrect Answer B) is an illegal boycott of other salespeople in their office. Incorrect Answer C) constitutes illegal price-fixing. Incorrect Answer D) does not violate antitrust laws. Correct Answer Explanation Antitrust laws prohibit price-fixing and other antitrust activities between competing firms. Because both salespersons work for the same firm, their agreement is not an agreement between competing companies to divide markets. The salespersons are merely fixing responsibilities within one company. Their agreement is quite proper and not subject to antitrust law. Reference: Practice of Real Estate > Risk Management/Supervision

Question 26

After a broker takes a listing of a residence, the owner specifies that he will not sell his home to any family that is not of the same Asian background as the seller. The broker should do which of these? A) Advertise the property exclusively in Asian language newspapers. B) Require that the owner sign a separate legal document stating the additional instruction as an amendment to the listing agreement. C) Abide by the principal's directions despite the fact that they conflict with the fair housing laws. D) Explain to the owner that his instruction violates federal law and that the broker cannot comply with it.

Answer 26

After a broker takes a listing of a residence, the owner specifies that he will not sell his home to any family that is not of the same Asian background as the seller. The broker should do which of these? A) Advertise the property exclusively in Asian language newspapers. Incorrect Answer B) Require that the owner sign a separate legal document stating the additional instruction as an amendment to the listing agreement. Incorrect Answer C) Abide by the principal's directions despite the fact that they conflict with the fair housing laws. Incorrect Answer D) Explain to the owner that his instruction violates federal law and that the broker cannot comply with it. Correct Answer Explanation The situation places the broker in the position of either violating the fiduciary duty of obedience or violating the federal Fair Housing Act. To avoid breaking the law, the broker must end the agency agreement if the owner insists on the discriminatory instruction. The broker may not advertise the property exclusively in foreign-language newspapers, and a legal document signed by the owner does not exempt the broker from following fair housing laws. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 27

The requirements for being an independent contractor for a salesperson and a principal broker include all of these EXCEPT A) most of the salesperson’s income will be based on sales production. B) the salesperson has a current real estate license. C) the salesperson has signed an independent contractor agreement with the principal broker. D) the principal broker will withhold taxes from the salesperson’s compensation.

Answer 27

The requirements for being an independent contractor for a salesperson and a principal broker include all of these EXCEPT A) most of the salesperson’s income will be based on sales production. Incorrect Answer B) the salesperson has a current real estate license. Incorrect Answer C) the salesperson has signed an independent contractor agreement with the principal broker. Incorrect Answer D) the principal broker will withhold taxes from the salesperson’s compensation. Correct Answer Explanation A broker does not withhold federal or Social Security taxes from an independent contractor's commissions. A principal broker is required to make those withholdings for all employees. An independent contractor situation must include the other three requirements to meet the conditions for independent contractor status established by the Internal Revenue Service (IRS). Reference: Practice of Real Estate > Supervision Practices

Question 28

A lender's refusal to lend money to potential homeowners attempting to purchase properties in areas with high crime rates is known as A) legal redlining. B) illegal redlining. C) steering. D) blockbusting.

Answer 28

A lender's refusal to lend money to potential homeowners attempting to purchase properties in areas with high crime rates is known as A) legal redlining. Incorrect Answer B) illegal redlining. Correct Answer C) steering. Incorrect Answer D) blockbusting. Incorrect Answer Explanation Failing to lend or to insure in areas with high crime rates is a form of redlining and a violation of the federal Fair Housing Act and is never legal. Such practices tend to discriminate against protected classes who largely populate such areas. Blockbusting is inducing panic selling by claiming that the entry of a protected class will have some sort of negative impact on property values. Steering is the channeling of homebuyers to a particular neighborhood to maintain or change the character of the neighborhood. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 29

All of these are protected under federal fair housing laws EXCEPT A) children. B) Muslims. C) Baptists. D) sexual orientation.

Answer 29

All of these are protected under federal fair housing laws EXCEPT A) children. Incorrect Answer B) Muslims. Incorrect Answer C) Baptists. Incorrect Answer D) sexual orientation. Correct Answer Explanation Sexual orientation may be protected under state or local fair housing laws, but sexual orientation is not a protected class under federal law. Protected classes under federal law include race, color, religion, or national origin, sex, disability, and familial status. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 30

All of these actions are illegal under federal and state fair housing laws EXCEPT A) refusing to show certain residential property to non-English-speaking individuals. B) refusing to show certain residential property to people who are not financially qualified to purchase it. C) offering advantageous loan terms to encourage the integration of a residential area. D) channeling members of a certain minority group into an area already predominately occupied by members of that minority.

Answer 30

All of these actions are illegal under federal and state fair housing laws EXCEPT A) refusing to show certain residential property to non-English-speaking individuals. Incorrect Answer B) refusing to show certain residential property to people who are not financially qualified to purchase it. Correct Answer C) offering advantageous loan terms to encourage the integration of a residential area. Incorrect Answer D) channeling members of a certain minority group into an area already predominately occupied by members of that minority. Incorrect Answer Explanation People who are not financially qualified to buy are not protected under the federal Fair Housing Act. The Act does prohibit discriminating against persons based on their race or ethnicity or steering persons to a particular area based on their minority status. Lenders may not steer racial or ethnic groups to a particular residential area through loan terms designed to attract those groups. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 31

A couple makes a written request that a real estate brokerage firm not contact the seller once the sale of their home is completed. Under this circumstance, the broker may A) contact the seller for up to 3 months after the transaction. B) not contact the seller at any time. C) contact the seller to conduct a consumer survey about the transaction. D) contact the seller for up to 18 months after the transaction.

Answer 31

A couple makes a written request that a real estate brokerage firm not contact the seller once the sale of their home is completed. Under this circumstance, the broker may A) contact the seller for up to 3 months after the transaction. Incorrect Answer B) not contact the seller at any time. Correct Answer C) contact the seller to conduct a consumer survey about the transaction. Incorrect Answer D) contact the seller for up to 18 months after the transaction. Incorrect Answer Explanation If a consumer asks a company not to call, even if the company has an established business relationship with the consumer, the company must abide by the consumer's request. The request stays in effect for 5 years. If a consumer does not make such a request, a broker may contact the consumer for up to 18 months after the consumer's last purchase, delivery, or payment. The broker may call a consumer for up to 3 months after the consumer makes an inquiry or submits an application. Reference: Practice of Real Estate > Advertising and Technology

Question 32

A prospective tenant suspected that his application to live in a residential apartment complex was denied on the basis of race. The tenant met with an attorney three years following the alleged discrimination. If the attorney declined the case on legal grounds, it is most likely due to all of the following EXCEPT A) the complaint could no longer be filed in federal court. B) this incident fell under a rare exception to liability for housing discrimination based on race. C) the statute of limitations would bar pursuing federal redress for the alleged incident. D) the complaint could no longer be filed at the Department of Housing and Urban Development (HUD).

Answer 32

A prospective tenant suspected that his application to live in a residential apartment complex was denied on the basis of race. The tenant met with an attorney three years following the alleged discrimination. If the attorney declined the case on legal grounds, it is most likely due to all of the following EXCEPT A) the complaint could no longer be filed in federal court. Incorrect Answer B) this incident fell under a rare exception to liability for housing discrimination based on race. Correct Answer C) the statute of limitations would bar pursuing federal redress for the alleged incident. Incorrect Answer D) the complaint could no longer be filed at the Department of Housing and Urban Development (HUD). Incorrect Answer Explanation There are no exceptions under federal fair housing laws that allow discrimination on the basis of race in housing. The incident of discrimination on the basis of race occurred too far in the past to pursue legal redress under the other options presented. The statute of limitations would bar this complaint. Complaints must be filed in federal court within two years and filed with HUD within one year. Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 33

Salespersons working as employees for a principal broker can be required to A) work specific hours each day as assigned by the broker. B) advertise properties only in their name. C) decline to have their federal income tax withheld by the broker. D) deposit all earnest money into their personal escrow account.

Answer 33

Salespersons working as employees for a principal broker can be required to A) work specific hours each day as assigned by the broker. Correct Answer B) advertise properties only in their name. Incorrect Answer C) decline to have their federal income tax withheld by the broker. Incorrect Answer D) deposit all earnest money into their personal escrow account. Incorrect Answer Explanation The answer is work specific hours each day as assigned by the broker. A broker who hires a salesperson as an employee may expect the salesperson to follow rules governing such activities as working hours, office hours, and attendance at meetings. A broker is required to withhold federal income taxes and Social Security taxes from the payroll of any employee. A salesperson hired as an employee or as an independent contractor must advertise properties in the name of the brokerage firm and deposit earnest money into the broker's designated escrow account. Reference: Practice of Real Estate > Supervision Practices

Question 34

A broker, upon reconciling, realized that his office manager had deposited operation funds into the earnest money account. This could be considered A) misappropriation. B) conversion. C) nothing to worry about. D) commingling.

Answer 34

A broker, upon reconciling, realized that his office manager had deposited operation funds into the earnest money account. This could be considered A) misappropriation. Incorrect Answer B) conversion. Incorrect Answer C) nothing to worry about. Incorrect Answer D) commingling. Correct Answer Explanation Commingling of funds occurs when funds for one account are mixed with those of another. In this case, the broker would be obligated to remove the funds, note the comingling and retrain the manager. Conversion and misappropriation are knowingly using someone else's funds. Reference: Practice of Real Estate > Risk Management/Supervision

Question 35

A prospective homebuyer who has three children inquires about the availability of a home in an area of predominately single and married couples without children. What should the broker say to this prospect? A) "I'd be happy to show you homes in other areas where there are more children." B) "The residents here have expressed a desire to keep the area quiet and without children." C) "I'll be pleased to show you houses in any area that you're interested in." D) "You wouldn't want to live in this area because the neighbors don’t like children and may be disrespectful to your family."

Answer 35

A prospective homebuyer who has three children inquires about the availability of a home in an area of predominately single and married couples without children. What should the broker say to this prospect? A) "I'd be happy to show you homes in other areas where there are more children." Incorrect Answer B) "The residents here have expressed a desire to keep the area quiet and without children." Incorrect Answer C) "I'll be pleased to show you houses in any area that you're interested in." Correct Answer D) "You wouldn't want to live in this area because the neighbors don’t like children and may be disrespectful to your family." Incorrect Answer Explanation The broker must not channel homeseekers toward or away from particular neighborhoods based on familial status. This practice is called steering. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 36

According to federal do-not-call legislation, when a consumer makes an inquiry or submits an application, a real estate licensee may call the consumer for up to A) 4 months. B) 6 months. C) 3 months. D) 18 months.

Answer 36

According to federal do-not-call legislation, when a consumer makes an inquiry or submits an application, a real estate licensee may call the consumer for up to A) 4 months. Incorrect Answer B) 6 months. Incorrect Answer C) 3 months. Correct Answer D) 18 months. Incorrect Answer Explanation A real estate licensee may call a consumer for up to 3 months after the consumer makes an inquiry or submits an application. A licensee may call consumers with whom they have an established business relationship for up to 18 months after the consumer's last purchase, delivery, or payment. Reference: Practice of Real Estate > Advertising and Technology

Question 37

A salesperson's written contract with her broker specifies that she is not an employee. In the last year, just less than half of the salesperson's income from real estate activity came from sales commissions. The remainder was based on an hourly wage paid by the broker. Using these facts, it is MOST likely that the Internal Revenue Service (IRS) would classify the salesperson as which of these for federal income tax purposes? A) Self-employed B) Part-time real estate salesperson C) Employee D) Independent contractor

Answer 37

A salesperson's written contract with her broker specifies that she is not an employee. In the last year, just less than half of the salesperson's income from real estate activity came from sales commissions. The remainder was based on an hourly wage paid by the broker. Using these facts, it is MOST likely that the Internal Revenue Service (IRS) would classify the salesperson as which of these for federal income tax purposes? A) Self-employed Incorrect Answer B) Part-time real estate salesperson Incorrect Answer C) Employee Correct Answer D) Independent contractor Incorrect Answer Explanation Because her earnings were more than half in noncommissions, the IRS would not see her as a self-employed independent contractor and could treat her as an employee. Reference: Practice of Real Estate > Supervision Practices

Question 38

A landlord has discovered that the tenant who has applied for a unit has a history of alcoholism and violence. The landlord A) must rent on a provisional basis as long as the tenant agrees to regular drug testing. B) may refuse to rent to the tenant because of the tenant’s history of violence. C) must rent to the violent tenant because alcoholism is covered under disability. D) must rent to the tenant but can charge an additional damage deposit.

Answer 38

A landlord has discovered that the tenant who has applied for a unit has a history of alcoholism and violence. The landlord A) must rent on a provisional basis as long as the tenant agrees to regular drug testing. Incorrect Answer B) may refuse to rent to the tenant because of the tenant’s history of violence. Correct Answer C) must rent to the violent tenant because alcoholism is covered under disability. Incorrect Answer D) must rent to the tenant but can charge an additional damage deposit. Incorrect Answer Explanation Alcoholism is a disability under the law, but the landlord does not have to rent to anyone who might be a danger to the landlord or other tenants. There is no legal requirement for the landlord to rent with additional fees or required drug testing. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 39

A real estate broker wants to end racial segregation. As an office policy, the broker requires that salespeople show prospective buyers from racial or ethnic minority groups only properties that are in certain areas of town where few members of those groups currently live. The broker has prepared a map illustrating the appropriate neighborhoods for each racial or ethnic group. Through this policy, the broker hopes to achieve racial balance in residential housing. Which statement is TRUE regarding this broker's policy? A) While the broker's policy may appear to constitute blockbusting, the broker’s good intentions outweigh the law and as such is acceptable. B) The broker's policy clearly shows the intent to discriminate. C) Because the effect of the broker's policy is discriminatory, it constitutes illegal steering regardless of the broker's intentions. D) This type of steering is allowed in cases where equality is the end result.

Answer 39

A real estate broker wants to end racial segregation. As an office policy, the broker requires that salespeople show prospective buyers from racial or ethnic minority groups only properties that are in certain areas of town where few members of those groups currently live. The broker has prepared a map illustrating the appropriate neighborhoods for each racial or ethnic group. Through this policy, the broker hopes to achieve racial balance in residential housing. Which statement is TRUE regarding this broker's policy? A) While the broker's policy may appear to constitute blockbusting, the broker’s good intentions outweigh the law and as such is acceptable. Incorrect Answer B) The broker's policy clearly shows the intent to discriminate. Incorrect Answer C) Because the effect of the broker's policy is discriminatory, it constitutes illegal steering regardless of the broker's intentions. Correct Answer D) This type of steering is allowed in cases where equality is the end result. Incorrect Answer Explanation Violations of fair housing laws occur when the effects of a practice result in illegal discrimination, regardless of intentions. The broker's policy in this case has the effect of steering purchasers to particular neighborhoods and is illegal steering. Blockbusting would occur if the broker induced owners to sell their property by claiming that members of a protected class were buying in the area and lowering property values. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 40

When hiring an employee rather than an independent contractor, a broker is obligated to A) guarantee a set schedule. B) give paid vacations. C) withhold employment taxes. D) not split commissions.

Answer 40

When hiring an employee rather than an independent contractor, a broker is obligated to A) guarantee a set schedule. Incorrect Answer B) give paid vacations. Incorrect Answer C) withhold employment taxes. Correct Answer D) not split commissions. Incorrect Answer Explanation A broker hiring an employee must withhold from the employee's wages employment taxes such as income and Social Security taxes. The broker is not required to give paid vacations, guarantee a set schedule, or split commissions, but may do so if agreed to by both the broker and the employee. Reference: Practice of Real Estate > Supervision Practices

Question 41

A single man with two small children has been told by a real estate salesperson that homes for sale in a condominium complex are available only to married couples with no children. Which statement is TRUE? A) Condominium complexes are exempt from the fair housing laws and can therefore restrict children. B) Because a single-parent family can be disruptive, if the parent provides little supervision of the children, the condominium is permitted to discriminate. C) The man may file a complaint alleging discrimination on the basis of familial status. D) Restrictive covenants in a condominium take precedence over the fair housing laws.

Answer 41

A single man with two small children has been told by a real estate salesperson that homes for sale in a condominium complex are available only to married couples with no children. Which statement is TRUE? A) Condominium complexes are exempt from the fair housing laws and can therefore restrict children. Incorrect Answer B) Because a single-parent family can be disruptive, if the parent provides little supervision of the children, the condominium is permitted to discriminate. Incorrect Answer C) The man may file a complaint alleging discrimination on the basis of familial status. Correct Answer D) Restrictive covenants in a condominium take precedence over the fair housing laws. Incorrect Answer Explanation The salesperson, and by implication the broker, and the property owner-principals have violated the prohibition against familial status discrimination. Anyone in charge of one or more children under age 18 who is denied access because of the children is the victim of discrimination based on familial status. Restrictive covenants do not take precedence over fair housing laws. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 42

A person with a physical disability has found an apartment that must be remodeled to accommodate her needs. All of these are allowed by the landlord in this case EXCEPT A) lease terms requiring the tenant to return the property to its original condition. B) lease terms stating that the tenant will pay for all the renovations. C) the landlord can review the renovation plans and require qualified contractors to perform the work. D) the disabled tenant will be required to pay a larger security deposit to cover the costs of returning the unit to its original condition.

Answer 42

A person with a physical disability has found an apartment that must be remodeled to accommodate her needs. All of these are allowed by the landlord in this case EXCEPT A) lease terms requiring the tenant to return the property to its original condition. Incorrect Answer B) lease terms stating that the tenant will pay for all the renovations. Incorrect Answer C) the landlord can review the renovation plans and require qualified contractors to perform the work. Incorrect Answer D) the disabled tenant will be required to pay a larger security deposit to cover the costs of returning the unit to its original condition. Correct Answer Explanation Federal fair housing laws prohibit discrimination against a disabled person. A landlord may not require a larger security deposit from a disabled tenant. Disabled persons have the right to reasonably modify the space at their expense. The landlord has the right to approve the modifications and may insist that the changes be made by qualified contractors. The landlord may also require the tenant to place money in an escrow account to restore the space to its original condition when the tenant moves out. Putting all the terms into writing will protect all parties. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 43

A salesperson finally concluded some extremely difficult negotiations resulting in the sale of a listed parcel of land. For all of her extra efforts, she can legally receive a performance bonus directly from A) the seller. B) the buyer. C) her principal broker. D) no one.

Answer 43

A salesperson finally concluded some extremely difficult negotiations resulting in the sale of a listed parcel of land. For all of her extra efforts, she can legally receive a performance bonus directly from A) the seller. Incorrect Answer B) the buyer. Incorrect Answer C) her principal broker. Correct Answer D) no one. Incorrect Answer Explanation Bonus and commissions are paid directly to the broker, who then pays the salesperson. The salesperson may not receive commissions or a bonus from anyone other than her principal broker. Reference: Practice of Real Estate > Supervision Practices

Question 44

A broker assigns a salesperson to work open houses in a new subdivision for a developer that the firm represents. After two months, the salesperson's work has resulted in sales above the developer's expectations, and he offers to pay the salesperson a $1,000 bonus. The salesperson may receive the bonus payment A) only if paid from her principal broker. B) from the developer if permission is granted from the state regulatory agency. C) only if paid after the salesperson’s assignment to the subdivision ends. D) from the developer if the bonus is placed in the broker’s trust account.

Answer 44

A broker assigns a salesperson to work open houses in a new subdivision for a developer that the firm represents. After two months, the salesperson's work has resulted in sales above the developer's expectations, and he offers to pay the salesperson a $1,000 bonus. The salesperson may receive the bonus payment A) only if paid from her principal broker. Correct Answer B) from the developer if permission is granted from the state regulatory agency. Incorrect Answer C) only if paid after the salesperson’s assignment to the subdivision ends. Incorrect Answer D) from the developer if the bonus is placed in the broker’s trust account. Incorrect Answer Explanation Salespersons may not receive commissions or bonus payments from anyone other than their principal broker. The salesperson may receive the bonus payment if the developer pays it directly to the broker, who then gives all or part of the bonus to the salesperson, depending on the salesperson's employment agreement with the broker. Payments of this type would be deposited into the firm's operations account, not put into a trust account. Reference: Practice of Real Estate > Supervision Practices

Question 45

The CAN-SPAM Act established guidelines for sending A) solicited facsimile messages. B) unsolicited email messages. C) solicited email messages. D) unsolicited text messages.

Answer 45

The CAN-SPAM Act established guidelines for sending A) solicited facsimile messages. Incorrect Answer B) unsolicited email messages. Correct Answer C) solicited email messages. Incorrect Answer D) unsolicited text messages. Incorrect Answer Explanation The Can-Spam Act established guidelines for unsolicited commercial email messages, including an option for the receiver to opt out from receiving future emails. The federal Junk Fax Prevention Act of 2005 permits someone to send a fax based on a prior business relationship, with an opt-out process to prevent future unsolicited advertising faxes. Reference: Practice of Real Estate > Advertising and Technology

Question 46

At the end of the month, all the property files in the broker's earnest money trust account have a zero balance, with the account having a balance of $50. This means that A) the broker has commingled the funds. B) the broker’s account will be closed. C) all the properties have closed. D) the broker must have not received a commission.

Answer 46

At the end of the month, all the property files in the broker's earnest money trust account have a zero balance, with the account having a balance of $50. This means that A) the broker has commingled the funds. Incorrect Answer B) the broker’s account will be closed. Incorrect Answer C) all the properties have closed. Correct Answer D) the broker must have not received a commission. Incorrect Answer Explanation Each property file in a trust account keeps track of the earnest money for the property; upon closing, the money is removed and taken to the closer to use as a credit for the buyer. This means that the account will have a zero balance. Brokers are allowed to keep a small amount of the firm's money in the account to keep it open. Reference: Practice of Real Estate > Supervision Practices

Question 47

A house for sale was advertised as a "fine executive home in an exclusive neighborhood, suitable for an older couple; near St. Mary's Church." All of these are true EXCEPT A) an exclusive neighborhood could be interpreted to mean that minorities are not welcome. B) this is descriptive of the property for sale and a good ad. C) the ad could appear to imply that younger families with children are not welcome. D) the neighborhood could appear to be undesirable for people who do not follow the same religion as those at St. Mary's Church.

Answer 47

A house for sale was advertised as a "fine executive home in an exclusive neighborhood, suitable for an older couple; near St. Mary's Church." All of these are true EXCEPT A) an exclusive neighborhood could be interpreted to mean that minorities are not welcome. Incorrect Answer B) this is descriptive of the property for sale and a good ad. Correct Answer C) the ad could appear to imply that younger families with children are not welcome. Incorrect Answer D) the neighborhood could appear to be undesirable for people who do not follow the same religion as those at St. Mary's Church. Incorrect Answer Explanation The ad could be construed as discriminatory because it may indicate a preference for younger families with no children and possibly those of a certain faith. The term exclusive could be considered to indicate the neighborhood is not appropriate for minorities. Reference: Practice of Real Estate > Advertising and Technology

Question 48

A broker deposits earnest money into the company's operations account. This action is A) legal if both parties to a transaction give consent in writing. B) commingling of funds and is illegal. C) legal if the trust account is reimbursed by the end of the calendar month. D) legal if the seller gives consent in writing.

Answer 48

A broker deposits earnest money into the company's operations account. This action is A) legal if both parties to a transaction give consent in writing. Incorrect Answer B) commingling of funds and is illegal. Correct Answer C) legal if the trust account is reimbursed by the end of the calendar month. Incorrect Answer D) legal if the seller gives consent in writing. Incorrect Answer Explanation The mixing of trust funds with a broker's personal funds is commingling. Commingling is illegal, regardless of any plan to later reimburse the account and is not legal even with written consent from any party in a transaction. Reference: Practice of Real Estate > Supervision Practices

Question 49

An apartment rule prohibits pets. A prospective tenant with a physical disability relies on a service animal to assist him. Which of these is TRUE? A) The landlord can waive the enforcement of the rule only if there is a suitable unit in the complex for an animal. B) The landlord may not refuse to rent to a person with a service animal. C) The landlord can require proof of the tenant’s disability and require a nonrefundable pet deposit. D) The landlord must allow the animal but can charge an extra pet deposit.

Answer 49

An apartment rule prohibits pets. A prospective tenant with a physical disability relies on a service animal to assist him. Which of these is TRUE? A) The landlord can waive the enforcement of the rule only if there is a suitable unit in the complex for an animal. Incorrect Answer B) The landlord may not refuse to rent to a person with a service animal. Correct Answer C) The landlord can require proof of the tenant’s disability and require a nonrefundable pet deposit. Incorrect Answer D) The landlord must allow the animal but can charge an extra pet deposit. Incorrect Answer Explanation Service animals are not pets and must be allowed as a reasonable accommodation for a disabled person under the Fair Housing Act. The landlord may not charge any pet deposit for the animal. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 50

The practice of channeling families with children away from other buildings into an apartment building where other families with children reside is A) redlining. B) most practical. C) illegal discrimination. D) blockbusting.

Answer 50

The practice of channeling families with children away from other buildings into an apartment building where other families with children reside is A) redlining. Incorrect Answer B) most practical. Incorrect Answer C) illegal discrimination. Correct Answer D) blockbusting. Incorrect Answer Explanation The federal fair housing law protects children and families from being directed to any one building. A landlord cannot refuse to rent to a family unless the property is approved senior housing. Blockbusting is the illegal practice of creating panic due to a protected class moving in to an area. Redlining is the illegal practice of refusing to make loans in an area. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 51

Who is ultimately responsible for a salesperson's mistakes in writing a sales contract? A) The salesperson’s office manager B) The managing associate broker C) The salesperson’s principal broker D) The salesperson and the managing associate broker

Answer 51

Who is ultimately responsible for a salesperson's mistakes in writing a sales contract? A) The salesperson’s office manager Incorrect Answer B) The managing associate broker Incorrect Answer C) The salesperson’s principal broker Correct Answer D) The salesperson and the managing associate broker Incorrect Answer Explanation A real estate brokerage firm's principal broker has ultimate responsibility for all activities of the real estate licensees in the firm. Salespersons may be held accountable for any of their mistakes in a sales contract, but the principal broker holds ultimate responsibility for the salesperson's actions. A managing broker or office manager may share responsibility for the salesperson's actions. Reference: Practice of Real Estate > Supervision Practices

Question 52

A salesperson who has a seller complete a property disclosure form and who provides the form to a buyer in a timely manner is protecting the liability of A) the buyer. B) the brokerage. C) the home inspector. D) the lender.

Answer 52

A salesperson who has a seller complete a property disclosure form and who provides the form to a buyer in a timely manner is protecting the liability of A) the buyer. Incorrect Answer B) the brokerage. Correct Answer C) the home inspector. Incorrect Answer D) the lender. Incorrect Answer Explanation The principal broker and the salesperson are responsible for properly disclosing any defects in the property to the buyer. By providing the disclosure form in a timely manner, the salesperson is protecting the liability of the broker. Reference: Practice of Real Estate > Supervision Practices

Question 53

When hiring an employee rather than an independent contractor, a broker is obligated to A) guarantee a set schedule. B) withhold employment taxes. C) give paid vacations. D) not split commissions.

Answer 53

When hiring an employee rather than an independent contractor, a broker is obligated to A) guarantee a set schedule. Incorrect Answer B) withhold employment taxes. Correct Answer C) give paid vacations. Incorrect Answer D) not split commissions. Incorrect Answer Explanation A broker hiring an employee must withhold from the employee's wages employment taxes such as income and social security taxes. The broker is not required to give paid vacations, guarantee a set schedule, or split commissions, but may do so if agreed to by both the broker and the employee. Reference: Practice of Real Estate > Supervision Practices

Question 54

During a job interview, a principal broker tells a salesperson that she will work for the brokerage firm as an independent contractor. As an independent contractor, what can the salesperson expect from her work with the broker? A) She will be required to work a minimum of 40 hours per week. B) She must attend weekly sales meetings. C) She may participate in the firm’s health insurance plan. D) At least 90% of her income will be based on sales production.

Answer 54

During a job interview, a principal broker tells a salesperson that she will work for the brokerage firm as an independent contractor. As an independent contractor, what can the salesperson expect from her work with the broker? A) She will be required to work a minimum of 40 hours per week. Incorrect Answer B) She must attend weekly sales meetings. Incorrect Answer C) She may participate in the firm’s health insurance plan. Incorrect Answer D) At least 90% of her income will be based on sales production. Correct Answer Explanation To be considered an independent contractor under Internal Revenue Service (IRS) rules, at least 90% of the salesperson's income must be based on sales production. A broker may not require a minimum number of weekly hours or mandate sales meetings for independent contractors but may make such requirements for employees of the firm. Reference: Practice of Real Estate > Supervision Practices

Question 55

The Civil Rights Act of 1866 prohibited discrimination on the basis of which of the following? A) Color B) Opportunity C) Race D) Religion

Answer 55

The Civil Rights Act of 1866 prohibited discrimination on the basis of which of the following? A) Color Incorrect Answer B) Opportunity Incorrect Answer C) Race Correct Answer D) Religion Incorrect Answer Explanation The Civil Rights Act of 1866 prohibited discrimination on the basis of race. Race is the only protected class in the Civil Rights Act of 1866. There are no exemptions to this rule. Therefore, discrimination on the basis of race in the sale or leasing of real estate is always prohibited. Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 56

A buyer makes an offer to purchase a certain property listed with a real estate professional and leaves an earnest money deposit to show good faith. The offer is accepted. The real estate professional should A) put the deposit in a trust account, as provided by state law. B) immediately apply the deposit to the listing expenses. C) put the deposit in the real estate professional’s personal checking account. D) give the deposit to the seller when the offer is presented.

Answer 56

A buyer makes an offer to purchase a certain property listed with a real estate professional and leaves an earnest money deposit to show good faith. The offer is accepted. The real estate professional should A) put the deposit in a trust account, as provided by state law. Correct Answer B) immediately apply the deposit to the listing expenses. Incorrect Answer C) put the deposit in the real estate professional’s personal checking account. Incorrect Answer D) give the deposit to the seller when the offer is presented. Incorrect Answer Explanation The answer is put the deposit in an account, as provided by state law. Once an offer becomes an accepted contract, the earnest money must be deposited in a trust account per rules of the state law. Reference: Practice of Real Estate > Risk Management/Supervision

Question 57

A broker would have the right to dictate which of these to an independent contractor? A) Work schedule the person would have to follow B) Compensation the person would receive C) Sales meetings the person would need to attend D) Number of hours the person would have to work

Answer 57

A broker would have the right to dictate which of these to an independent contractor? A) Work schedule the person would have to follow Incorrect Answer B) Compensation the person would receive Correct Answer C) Sales meetings the person would need to attend Incorrect Answer D) Number of hours the person would have to work Incorrect Answer Explanation Brokers may dictate the compensation their independent contractors will receive for work not yet done, but they may not dictate working schedules or sales meetings to be attended. The Internal Revenue Service (IRS) would most likely classify persons employed with defined work schedules, including the numbers of hours worked, and required sales meetings as employees rather than independent contractors for income tax purposes. Reference: Practice of Real Estate > Supervision Practices

Question 58

Real estate law governing advertising applies to all of these EXCEPT A) social media. B) in-house notes for showing. C) communications with consumers. D) multiple listing service (MLS) systems.

Answer 58

Real estate law governing advertising applies to all of these EXCEPT A) social media. Incorrect Answer B) in-house notes for showing. Correct Answer C) communications with consumers. Incorrect Answer D) multiple listing service (MLS) systems. Incorrect Answer Explanation In-house notes for showing are not to be seen by consumers and so do not have to follow state or federal laws. Any other advertisement that may be seen by a consumer must follow the lawPractice of Real Estate > Advertising and Technology Practice of Real Estate > Advertising and Technology

Question 59

Typically, trust accounts are in the name of A) the broker and each salesperson who makes a deposit. B) the firm and the principal broker. C) the firm only. D) all brokers in the firm.

Answer 59

Typically, trust accounts are in the name of A) the broker and each salesperson who makes a deposit. Incorrect Answer B) the firm and the principal broker. Correct Answer C) the firm only. Incorrect Answer D) all brokers in the firm. Incorrect Answer Explanation State laws dictate how trust accounts are to be created, but most often they include the firm's and principal broker's name. Reference: Practice of Real Estate > Supervision Practices

Question 60

The landlord's lease prohibits tenants from altering the property in any way. A young woman who uses a wheelchair cannot maneuver over the doorstep into the apartment by herself. In addition, she cannot access the bathroom facilities in her wheelchair. Which of these is TRUE? A) The landlord should not have rented this apartment to the tenant. B) The landlord is responsible for making all apartments accessible to people with disabilities. C) The tenant cannot remedy these conditions because of the terms of the lease. D) The tenant is entitled to make the necessary alterations.

Answer 60

The landlord's lease prohibits tenants from altering the property in any way. A young woman who uses a wheelchair cannot maneuver over the doorstep into the apartment by herself. In addition, she cannot access the bathroom facilities in her wheelchair. Which of these is TRUE? A) The landlord should not have rented this apartment to the tenant. Incorrect Answer B) The landlord is responsible for making all apartments accessible to people with disabilities. Incorrect Answer C) The tenant cannot remedy these conditions because of the terms of the lease. Incorrect Answer D) The tenant is entitled to make the necessary alterations. Correct Answer Explanation The Fair Housing Amendments Act of 1998 provides that people with disabilities must be permitted to make reasonable modifications to the premises at their own expense. The Act does not require the landlord to make all apartments accessible to people with disabilities. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 61

Upon notice that an offer has been accepted, what should the listing broker do with the earnest money deposit? A) Hold the earnest money until all the contingencies have been met and then deposit it into a trust account B) Have the buyer’s broker who typically holds the funds deposit them into the listing brokers trust account C) Deposit the earnest money into the brokerage or a title company’s trust account D) Give the earnest money to the seller to hold until closing

Answer 61

Upon notice that an offer has been accepted, what should the listing broker do with the earnest money deposit? A) Hold the earnest money until all the contingencies have been met and then deposit it into a trust account Incorrect Answer B) Have the buyer’s broker who typically holds the funds deposit them into the listing brokers trust account Incorrect Answer C) Deposit the earnest money into the brokerage or a title company’s trust account Correct Answer D) Give the earnest money to the seller to hold until closing Incorrect Answer Explanation Upon acceptance of the offer, which creates an executory contract, the earnest money is deposited into the brokerage or a title company's trust account. The money may not be held by the buyer's broker or the seller or until the contingencies are completed. Reference: Practice of Real Estate > Supervision Practices

Question 62

Housing that qualifies for exemption from familial status under federal fair housing provisions A) is allowed if 55% of the occupants are over 80 years old. B) is permitted for owner-occupied buildings with four or more units. C) includes housing intended for people age 50 or older. D) includes a restriction that 80% of the units be occupied by people 55 or older.

Answer 62

Housing that qualifies for exemption from familial status under federal fair housing provisions A) is allowed if 55% of the occupants are over 80 years old. Incorrect Answer B) is permitted for owner-occupied buildings with four or more units. Incorrect Answer C) includes housing intended for people age 50 or older. Incorrect Answer D) includes a restriction that 80% of the units be occupied by people 55 or older. Correct Answer Explanation The Fair Housing Act allows for two exemptions to familial status protection in housing for seniors. One permissible exemption is if 80% of the units are occupied by people age 55 or older. The other exemption is for housing intended for persons over the age of 62. Owner-occupied buildings with four or more units are subject to the federal Fair Housing Act. All senior housing must be Department of Housing and Urban Development (HUD) certified. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 63

A principal broker uses earnest money placed in the company trust account to pay for the rent owed on the brokerage firm's office. Using escrow funds for this purpose is A) illegal conversion. B) illegal, unless the client has approved the expenditure. C) legal, if the trust account is reimbursed by the end of the calendar month. D) legal, if the seller gives consent in writing.

Answer 63

A principal broker uses earnest money placed in the company trust account to pay for the rent owed on the brokerage firm's office. Using escrow funds for this purpose is A) illegal conversion. Correct Answer B) illegal, unless the client has approved the expenditure. Incorrect Answer C) legal, if the trust account is reimbursed by the end of the calendar month. Incorrect Answer D) legal, if the seller gives consent in writing. Incorrect Answer Explanation Trust funds may not be deposited into an operations or personal account. Reference: Practice of Real Estate > Supervision Practices

Question 64

A real estate broker was found to have engaged in multiple incidents of housing discrimination against members of protected classes. Some complaints were filed with the Department of Housing and Urban Development (HUD) and others in federal court. Ultimately, one of these incidents was appealed to the United States Supreme Court. The broker's real estate license was revoked. Which of the following governmental entities revoked the real estate broker's license for violating federal fair housing laws? A) The United States Supreme Court B) The federal court C) HUD D) None of these

Answer 64

A real estate broker was found to have engaged in multiple incidents of housing discrimination against members of protected classes. Some complaints were filed with the Department of Housing and Urban Development (HUD) and others in federal court. Ultimately, one of these incidents was appealed to the United States Supreme Court. The broker's real estate license was revoked. Which of the following governmental entities revoked the real estate broker's license for violating federal fair housing laws? A) The United States Supreme Court Incorrect Answer B) The federal court Incorrect Answer C) HUD Incorrect Answer D) None of these Correct Answer Explanation None of these entities revoked the real estate broker's license: In the United States, professional licenses are issued and revoked at the state level. Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 65

A broker employs several salespeople, one of whom is a member of a protected group. The broker directs her to work only with members of her group and to solicit sales only in similar neighborhoods. Which of these is TRUE? A) The broker is entitled to direct a salesperson’s activities in this way. B) The practice could establish or continue the unlawful practice of steering. C) The fair housing laws do not apply to the broker's practices. D) The salesperson should be satisfied with the broker's policy.

Answer 65

A broker employs several salespeople, one of whom is a member of a protected group. The broker directs her to work only with members of her group and to solicit sales only in similar neighborhoods. Which of these is TRUE? A) The broker is entitled to direct a salesperson’s activities in this way. Incorrect Answer B) The practice could establish or continue the unlawful practice of steering. Correct Answer C) The fair housing laws do not apply to the broker's practices. Incorrect Answer D) The salesperson should be satisfied with the broker's policy. Incorrect Answer Explanation Fair housing laws prohibit steering and do apply to the effects of a broker's practices. The broker's actions could be considered to be designed to steer the salesperson's activities only to prospective clients or customers of her racial or ethnic group. The salesperson's acceptance of the broker's directive could result in the actual steering of minorities to specific neighborhoods. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 66

When a salesperson tells homeowners that minorities are moving into the area in order to get those homeowners to sell their properties, this activity is A) legal as long as it is true. B) called blockbusting. C) called power selling. D) discriminatory advertising.

Answer 66

When a salesperson tells homeowners that minorities are moving into the area in order to get those homeowners to sell their properties, this activity is A) legal as long as it is true. Incorrect Answer B) called blockbusting. Correct Answer C) called power selling. Incorrect Answer D) discriminatory advertising. Incorrect Answer Explanation Blockbusting is inducing panic selling by claiming that the entry of a protected class will have some sort of negative impact on property values. Blockbusting is never legal. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 67

The Americans with Disabilities Act (ADA) requires A) all employers to adopt nondiscriminatory employment practices. B) all real estate properties to be free of barriers to people with disabilities. C) that existing premises be remodeled for people with disabilities, regardless of the cost involved. D) that reasonable accommodations be provided for people with disabilities.

Answer 67

The Americans with Disabilities Act (ADA) requires A) all employers to adopt nondiscriminatory employment practices. Incorrect Answer B) all real estate properties to be free of barriers to people with disabilities. Incorrect Answer C) that existing premises be remodeled for people with disabilities, regardless of the cost involved. Incorrect Answer D) that reasonable accommodations be provided for people with disabilities. Correct Answer Explanation The ADA requires that reasonable accommodations be provided for the disabled, both in employment and in places of public accommodation. The ADA does not address all discriminatory employment practices. Discriminatory employment practices are prohibited by other federal and state laws. The ADA does not require that all real estate be free of barriers but does require places of public accommodation, such as a rental office, to be handicap accessible. The ADA does allow for disabled persons to pay for costs for reasonable accommodations to rental property. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 68

Discrimination based on familial status was prohibited with the passage of A) the Fair Housing Act of 1968. B) the Civil Rights Act of 1964. C) the Civil Rights Act of 1866. D) the Fair Housing Amendments Act of 1988.

Answer 68

Discrimination based on familial status was prohibited with the passage of A) the Fair Housing Act of 1968. Incorrect Answer B) the Civil Rights Act of 1964. Incorrect Answer C) the Civil Rights Act of 1866. Incorrect Answer D) the Fair Housing Amendments Act of 1988. Correct Answer Explanation Familial status and handicap (disability) were added as protected classes under the federal Fair Housing Amendments Act of 1988. The federal Civil Rights Act of 1964 prohibits discrimination on the basis of race, ethnicity, national origin, religion, or sex in voting laws and practice, in education, in the workplace, and in facilities that serve the general public. The federal Fair Housing Act of 1968 forbids discrimination in housing and mortgage lending on the basis of race, color, religion, and national origin. Additional laws passed in 1974 and 1988 added sex, familial status, and disability as protected classes. The federal Civil Rights Act of 1866 prohibited discrimination based on race. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 69

Under the common laws of agency, in a typical agency relationship between broker and client, the broker's commission is determined by A) the top three office producers. B) the Sherman Antitrust Act. C) local real estate boards. D) negotiation in advance.

Answer 69

Under the common laws of agency, in a typical agency relationship between broker and client, the broker's commission is determined by A) the top three office producers. Incorrect Answer B) the Sherman Antitrust Act. Incorrect Answer C) local real estate boards. Incorrect Answer D) negotiation in advance. Correct Answer Explanation A broker and a client negotiate and determine what commission schedule will apply to the transaction. Commissions are always negotiable. Each brokerage firm may determine its own commission guidelines and suggestions for its salespeople, but the actual commission is negotiated with the client. The Sherman Antitrust Act of 1980 makes it illegal for competing companies or real estate boards to set standard commission rates for brokerage firms. Reference: Practice of Real Estate > Supervision Practices

Question 70

How long do parties have to file a discrimination suit in federal court? A) One year B) Three years C) Two years D) Six months

Answer 70

How long do parties have to file a discrimination suit in federal court? A) One year Incorrect Answer B) Three years Incorrect Answer C) Two years Correct Answer D) Six months Incorrect Answer Explanation Parties to discrimination have one year to file with Department of Housing and Urban Development (HUD) and two years to file in federal court. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 71

A real estate agent started to work with a man who stated he was a Sikh and consistently wore a turban. The client did not express an interest in living around other members of the Sikh religion. Instead, he told the agent he wanted to find a four-bedroom, three-bathroom, single-family residence with an accessory dwelling unit for his elderly father. The agent liked the client and wanted him to feel comfortable in his new home. To ensure this occurred, the agent showed the client available properties only in the areas where other Sikhs lived. The agent's behavior is A) servicing diverse populations. B) redlining. C) blockbusting. D) steering.

Answer 71

A real estate agent started to work with a man who stated he was a Sikh and consistently wore a turban. The client did not express an interest in living around other members of the Sikh religion. Instead, he told the agent he wanted to find a four-bedroom, three-bathroom, single-family residence with an accessory dwelling unit for his elderly father. The agent liked the client and wanted him to feel comfortable in his new home. To ensure this occurred, the agent showed the client available properties only in the areas where other Sikhs lived. The agent's behavior is A) servicing diverse populations. Incorrect Answer B) redlining. Incorrect Answer C) blockbusting. Incorrect Answer D) steering. Correct Answer Explanation Under federal fair housing laws, steering is illegally channeling clients to or away from particular geographic areas based upon the client's membership in a protected class. Religion is a protected class under federal fair housing laws. The real estate agent was engaging in illegal steering when showing the client properties only in those areas where other Sikhs lived. This is true despite the agent's good intentions towards the client. Blockbusting (also called panic peddling) occurs when real estate agents induce property owners to sell their homes merely because of the entry of protected class members into the neighborhood. Redlining is illegal activity perpetrated by lenders; lenders may not deny loan applications based solely upon whether or not the property is in certain, clearly-defined geographic areas. Finally, the fact pattern shows illegal steering, rather than an agent servicing a diverse clientele. Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 72

Antitrust laws prohibit all of these EXCEPT A) a broker setting a company commission schedule. B) real estate companies agreeing not to cooperate with a broker because of that broker’s fees. C) competing property management companies agreeing to standardized management fees. D) competing brokers allocating market shares based on the value of homes.

Answer 72

Antitrust laws prohibit all of these EXCEPT A) a broker setting a company commission schedule. Correct Answer B) real estate companies agreeing not to cooperate with a broker because of that broker’s fees. Incorrect Answer C) competing property management companies agreeing to standardized management fees. Incorrect Answer D) competing brokers allocating market shares based on the value of homes. Incorrect Answer Explanation All the other actions are violations of antitrust laws. Real estate brokers must independently determine commission rates or fees for their firms only. Commission decisions must be based on a broker's business judgment and revenue requirements and without input from other competing brokers. Reference: Practice of Real Estate > Risk Management/Supervision

Question 73

It is illegal for a lending institution to refuse to make a residential real estate loan in a particular area only because of A) the questionable economic situation of the applicant. B) the deteriorated condition of the premises. C) the applicant’s immigration status. D) the physical location of the property.

Answer 73

It is illegal for a lending institution to refuse to make a residential real estate loan in a particular area only because of A) the questionable economic situation of the applicant. Incorrect Answer B) the deteriorated condition of the premises. Incorrect Answer C) the applicant’s immigration status. Incorrect Answer D) the physical location of the property. Correct Answer Explanation Refusing to make a residential loan in a particular area is known as redlining, literally drawing a line around particular areas and refusing to make loans in those areas. Redlining is considered a form of discrimination. Asking applicants for citizenship documentation or immigration status does not violate the Fair Housing Act. A lending institution may refuse to make a residential real estate loan based on the economic situation of an applicant or the condition of the property itself. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 74

As mandated by federal do-not-call legislation, real estate licensees may call consumers with whom they have established a business relationship up to A) 18 months after the consumer’s last purchase, delivery, or payment. B) 3 months after the consumer’s last purchase, delivery, or payment. C) 20 months after the consumer’s last purchase, delivery, or payment. D) 12 months after the consumer’s last purchase, delivery, or payment.

Answer 74

As mandated by federal do-not-call legislation, real estate licensees may call consumers with whom they have established a business relationship up to A) 18 months after the consumer’s last purchase, delivery, or payment. Correct Answer B) 3 months after the consumer’s last purchase, delivery, or payment. Incorrect Answer C) 20 months after the consumer’s last purchase, delivery, or payment. Incorrect Answer D) 12 months after the consumer’s last purchase, delivery, or payment. Incorrect Answer Explanation Real estate licensees may call consumers with whom they have an established business relationship for up to 18 months after the consumer's last purchase, delivery, or payment. A real estate licensee may call a consumer for up to 3 months after the consumer makes an inquiry or submits an application. If a consumer asks a company not to call, the company must abide by the consumer's request, which stays in effect for 5 years. Reference: Practice of Real Estate > Advertising and Technology

Question 75

A woman has a nine-year-old grandson living with her, and her application for an apartment has been rejected because the community does not allow anyone under the age of 18. Is this permissible? A) Yes, if the housing complies with regulations for senior housing. B) Yes, if the policy is consistently applied to all tenants. C) No, because familial status is always a protected class in all housing. D) No, if less than 30% of the occupants are over the age of 55.

Answer 75

A woman has a nine-year-old grandson living with her, and her application for an apartment has been rejected because the community does not allow anyone under the age of 18. Is this permissible? A) Yes, if the housing complies with regulations for senior housing. Correct Answer B) Yes, if the policy is consistently applied to all tenants. Incorrect Answer C) No, because familial status is always a protected class in all housing. Incorrect Answer D) No, if less than 30% of the occupants are over the age of 55. Incorrect Answer Explanation Certain properties can be restricted to occupancy by seniors as an exemption to the familial status protection. Senior housing properties in which 80% of the units are occupied by individuals 55 or older may refuse to rent or sell to families with children and may exclude owners and tenants from having children under 18 living in the senior housing. In all other cases, familial status is always a protected class in housing. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 76

A broker discovers that the previous owner of a home she has listed died of AIDS. The broker A) may disclose the fact if asked by a prospective buyer. B) may not disclose that the previous owner died of AIDS. C) must disclose the fact to prospective buyers. D) should consult an attorney to determine if the fact creates a stigmatized property.

Answer 76

A broker discovers that the previous owner of a home she has listed died of AIDS. The broker A) may disclose the fact if asked by a prospective buyer. Incorrect Answer B) may not disclose that the previous owner died of AIDS. Correct Answer C) must disclose the fact to prospective buyers. Incorrect Answer D) should consult an attorney to determine if the fact creates a stigmatized property. Incorrect Answer Explanation A disclosure that a property owner or occupant died of AIDS is illegal discrimination against the handicapped under the federal Fair Housing Act. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 77

A principal broker has hired three new salespeople, all with new licenses. In working with the new people, the principal broker's most important obligation is to make sure the new salespeople are A) mentored. B) trained. C) given a regular schedule. D) supervised.

Answer 77

A principal broker has hired three new salespeople, all with new licenses. In working with the new people, the principal broker's most important obligation is to make sure the new salespeople are A) mentored. Incorrect Answer B) trained. Incorrect Answer C) given a regular schedule. Incorrect Answer D) supervised. Correct Answer Explanation The number one requirement for a principal broker is to assure that all licensees of the firm are properly supervised. Reference: Practice of Real Estate > Risk Management/Supervision

Question 78

A commercial brokerage firm has hired a local advertising firm to send email blasts about new listings. In this case, all of these statements are true about the emails EXCEPT A) no opt-out method is required for emails sent by a third party. B) the receiver must be able to opt out for at least 30 days after the message is sent. C) requests to opt out must be honored within 10 business days. D) the method to opt out from receiving future emails must be prominent in the email message.

Answer 78

A commercial brokerage firm has hired a local advertising firm to send email blasts about new listings. In this case, all of these statements are true about the emails EXCEPT A) no opt-out method is required for emails sent by a third party. Correct Answer B) the receiver must be able to opt out for at least 30 days after the message is sent. Incorrect Answer C) requests to opt out must be honored within 10 business days. Incorrect Answer D) the method to opt out from receiving future emails must be prominent in the email message. Incorrect Answer Explanation The CAN-SPAM Act requires an opt-out method for all unsolicited commercial emails. When a licensee uses a third-party person or service to send unsolicited emails, the licensee must monitor the emails to ensure that they comply with the Act and have an opt-out method in the email. All the other statements are true regarding the CAN-SPAM Act. Reference: Practice of Real Estate > Advertising and Technology

Question 79

The federal Fair Housing Act does NOT prohibit A) blockbusting. B) redlining. C) discriminatory advertising. D) discriminating on the basis of marital status.

Answer 79

The federal Fair Housing Act does NOT prohibit A) blockbusting. Incorrect Answer B) redlining. Incorrect Answer C) discriminatory advertising. Incorrect Answer D) discriminating on the basis of marital status. Correct Answer Explanation Marital status is not one of the seven protected classes under the federal Fair Housing Act. The Act and regulations based on it do prohibit discriminatory advertising, redlining, and blockbusting. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 80

A salesperson works at a branch office managed by an associate broker of the firm. The salesperson makes a change in the listing price of a listing contract without the knowledge or consent of the seller. The ultimate responsibility for the salesperson's actions rests with A) the associate broker managing the office. B) the firm’s principal broker. C) the associate broker and the salesperson. D) the salesperson.

Answer 80

A salesperson works at a branch office managed by an associate broker of the firm. The salesperson makes a change in the listing price of a listing contract without the knowledge or consent of the seller. The ultimate responsibility for the salesperson's actions rests with A) the associate broker managing the office. Incorrect Answer B) the firm’s principal broker. Correct Answer C) the associate broker and the salesperson. Incorrect Answer D) the salesperson. Incorrect Answer Explanation The principal broker of a real estate brokerage firm holds ultimate responsibility for the actions of associate brokers and salespersons employed by the firm. The broker's responsibility extends to both employees and independent contractors working for the firm. While a real estate regulatory agency may find the principal broker ultimately responsible for the salesperson's actions, the agency may also hold the managing associate broker and the salesperson responsible. Reference: Practice of Real Estate > Supervision Practices

Question 81

To be classified by the Internal Revenue Service (IRS) as an independent contractor, a real estate salesperson may receive A) commissions on transactions as negotiated with the broker. B) a monthly salary or hourly wage as negotiated with the broker. C) a company-provided automobile, if negotiated with the broker. D) company-provided health insurance, if negotiated with the broker.

Answer 81

To be classified by the Internal Revenue Service (IRS) as an independent contractor, a real estate salesperson may receive A) commissions on transactions as negotiated with the broker. Correct Answer B) a monthly salary or hourly wage as negotiated with the broker. Incorrect Answer C) a company-provided automobile, if negotiated with the broker. Incorrect Answer D) company-provided health insurance, if negotiated with the broker. Incorrect Answer Explanation An independent contractor may not receive any employee benefits, such as health insurance or a company-provided automobile. An independent contractor must not be treated as an employee for federal tax purposes by receiving a monthly salary or hourly wage. Reference: Practice of Real Estate > Supervision Practices

Question 82

Under the federal Fair Housing Act, it is illegal to discriminate because of a person's A) having a history of dangerous behavior. B) having been convicted of distributing a controlled substance. C) having AIDS. D) marital status.

Answer 82

Under the federal Fair Housing Act, it is illegal to discriminate because of a person's A) having a history of dangerous behavior. Incorrect Answer B) having been convicted of distributing a controlled substance. Incorrect Answer C) having AIDS. Correct Answer D) marital status. Incorrect Answer Explanation People with AIDS are protected under the disability provision of the Fair Housing Act. Fair housing laws do not prohibit discrimination in housing because of a person's marital status. Owners may refuse to sell or rent to persons who have a history of dangerous behavior or drug convictions because fair housing laws do not protect such behavior. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 83

"I hear they're moving in. There goes the neighborhood! Better put your house on the market before values drop!" This statement is an example of what illegal practice? A) Blockbusting B) Fraudulent advertising C) Steering D) Redlining

Answer 83

"I hear they're moving in. There goes the neighborhood! Better put your house on the market before values drop!" This statement is an example of what illegal practice? A) Blockbusting Correct Answer B) Fraudulent advertising Incorrect Answer C) Steering Incorrect Answer D) Redlining Incorrect Answer Explanation Such statements, made by a person in a real estate brokerage, constitute blockbusting and usually are attempts to get listings by frightening owners into selling. Blockbusting is a violation of the federal Fair Housing Act. Steering is the channeling of homebuyers to a particular neighborhood to maintain or change the character of the neighborhood. Redlining is the illegal practice of refusing to make a mortgage loan or restricting the number of loans in a particular area. Fraudulent advertising involves providing untrue statements or promises in the advertising of a property. Reference: Practice of Real Estate > Americans with Disabilities (ADA) Act

Question 84

A broker was accused of violating antitrust laws. Of these, he was MOST likely accused of A) price-fixing. B) blockbusting in a community. C) undisclosed dual agencies. D) not having an equal housing opportunity sign in his office window.

Answer 84

A broker was accused of violating antitrust laws. Of these, he was MOST likely accused of A) price-fixing. Correct Answer B) blockbusting in a community. Incorrect Answer C) undisclosed dual agencies. Incorrect Answer D) not having an equal housing opportunity sign in his office window. Incorrect Answer Explanation Antitrust laws prohibit competing brokers from setting a standard commission rate, a practice known as price-fixing. Practicing undisclosed dual agency would violate agency law. Not posting the required fair housing sign in her office violates fair housing law. Blockbusting is violating fair housing laws, not antitrust laws. Reference: Practice of Real Estate > Risk Management/Supervision

Question 85

A broker found that he was short of funds for a week in the firm's operations account. He deposited an earnest money check into the account and then, after a closing the following week, put the earnest money amount into the trust account. In this case, the broker A) may be guilty of commingling. B) is fine because the movement of funds occurred within a week. C) is guilty of conversion. D) used standard operating procedures for trust account.

Answer 85

A broker found that he was short of funds for a week in the firm's operations account. He deposited an earnest money check into the account and then, after a closing the following week, put the earnest money amount into the trust account. In this case, the broker A) may be guilty of commingling. Incorrect Answer B) is fine because the movement of funds occurred within a week. Incorrect Answer C) is guilty of conversion. Correct Answer D) used standard operating procedures for trust account. Incorrect Answer Explanation Conversion is knowingly misappropriating funds, which the broker in this instance did. Commingling is mixing of funds but without the intention. Depositing trust funds into an operations account is never acceptable. Reference: Practice of Real Estate > Risk Management/Supervision

Question 86

In MOST real estate brokerage firms, a real estate salesperson may expect to work A) a minimum 40-hour week. B) on a commission based on the salesperson’s productivity. C) on salary with an employee benefit plan. D) for two principal brokers at the same time.

Answer 86

In MOST real estate brokerage firms, a real estate salesperson may expect to work A) a minimum 40-hour week. Incorrect Answer B) on a commission based on the salesperson’s productivity. Correct Answer C) on salary with an employee benefit plan. Incorrect Answer D) for two principal brokers at the same time. Incorrect Answer Explanation Most brokers hire salespersons as independent contractors with a commission payment plan based on the salesperson's participation in sales and/or rentals. A broker may not pay an independent contractor any company benefits or mandate regular work hours or meetings for the independent contractor. A salesperson may work only for one principal broker at a time. Reference: Practice of Real Estate > Supervision Practices

Question 87

John and Nicole Tran, two immigrants from Vietnam, have minor children. The Trans attempted to rent a residential apartment unit in a complex where many of their other relatives live. The application was denied on the basis of the minor children. All of the following statements about the federal Fair Housing Act are incorrect EXCEPT A) Because of their race, the denial of housing to the Tran family was unlawful. B) Denying housing to a family with minor children is always unlawful under the familial status classification. C) Because of their national origin, the denial of housing to the Tran family was unlawful. D) The family status classification provides for a senior housing exception.

Answer 87

John and Nicole Tran, two immigrants from Vietnam, have minor children. The Trans attempted to rent a residential apartment unit in a complex where many of their other relatives live. The application was denied on the basis of the minor children. All of the following statements about the federal Fair Housing Act are incorrect EXCEPT A) Because of their race, the denial of housing to the Tran family was unlawful. Incorrect Answer B) Denying housing to a family with minor children is always unlawful under the familial status classification. Incorrect Answer C) Because of their national origin, the denial of housing to the Tran family was unlawful. Incorrect Answer D) The family status classification provides for a senior housing exception. Correct Answer Explanation The federal Fair Housing Act familial status classification protects families with minor children, but there is an exemption for senior housing. To benefit from the senior housing exemption, the housing facilities or communities must follow multiple federal rules. There are two main types of senior housing. For one type, called the 55 or Older exemption, there must be one occupant who is 55 years of age or older in 80% of the units. For the other type of senior housing, all occupants (except for people like caretakers) must be 62 years of age or older. There is nothing in the fact pattern to suggest that the Trans have been denied housing on the basis of their race or national origin. Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 88

Federal do-not-call legislation limits calls A) from collection agencies or telephone surveyors. B) calls from real estate licensees to any consumer for up to 19 months after the consumer’s last purchase, delivery, or payment. C) from any plan, program, or campaign to sell goods or services through interstate phone calls. D) from political organizations or charities.

Answer 88

Federal do-not-call legislation limits calls A) from collection agencies or telephone surveyors. Incorrect Answer B) calls from real estate licensees to any consumer for up to 19 months after the consumer’s last purchase, delivery, or payment. Incorrect Answer C) from any plan, program, or campaign to sell goods or services through interstate phone calls. Correct Answer D) from political organizations or charities. Incorrect Answer Explanation The legislation does not limit calls by political organizations, charities, collection agencies, or telephone surveys. Real estate licensees may call consumers with whom they have an established business relationship for up to 18 months after the consumer's last purchase, delivery, or payment. Reference: Practice of Real Estate > Advertising and Technology

Question 89

Which of the following prospective tenants would be protected from discrimination under federal fair housing laws? A) Someone suffering from mental illness due to head injury B) None of these C) Someone who is HIV positive and uses cocaine D) A deaf person with a history of violence against other people’s property

Answer 89

Which of the following prospective tenants would be protected from discrimination under federal fair housing laws? A) Someone suffering from mental illness due to head injury Correct Answer B) None of these Incorrect Answer C) Someone who is HIV positive and uses cocaine Incorrect Answer D) A deaf person with a history of violence against other people’s property Incorrect Answer Explanation Someone suffering from mental illness due to a head injury would be protected under federal fair housing laws. The federal Fair Housing Act, as amended, does not protect individuals who present a threat to other people or their property. It also does not protect current users of illegal substances, like cocaine. Reference: Practice of Real Estate > Federal Fair Housing Laws

Question 90

The amount of commission that is paid to a salesperson is determined by A) mutual agreement with the client. B) state law. C) the local real estate board. D) mutual agreement with the salesperson’s broker.

Answer 90

The amount of commission that is paid to a salesperson is determined by A) mutual agreement with the client. Incorrect Answer B) state law. Incorrect Answer C) the local real estate board. Incorrect Answer D) mutual agreement with the salesperson’s broker. Correct Answer Explanation All commissions must be paid through the broker, and the amount the salesperson receives is set by mutual agreement between these two parties. The local board and state law do not dictate the amount of commissions paid. A client must agree to the amount of commission paid to a broker but is not involved in the split of the commission between the broker and a salesperson. Reference: Practice of Real Estate > Supervision Practices