Practice of Real Estate and Mandated Disclosures 25%

Question 1

Bulk Sales Act

Bulk sales Law

Answer 1

The bulk sales act is designed to protect the creditors of a business by giving them notice of a “bulk sale” (sometimes called a bulk transfer).

What Is a Bulk Sale? In general, a bulk sale is a sale to a buyer of all or most of the assets of the business outside the ordinary course of business.

*To comply with the Bulk Sales Act, a NOTICE OF SALE must be published in a newspaper of general circulation within the judicial district on which the property is located at least 12 BUSINESS DAYS BEFORE THE SALE IS CONSUMMATED.

If the Bulk Sales Law IS NOT COMPLIED WITH, the assets still belong to the vendor as far as creditors are concerned.
Creditors still have a claim on the assets of the vendor (seller) purchased by the vendee (buyer). This is why it is very important for the vendee (buyer) to see that the Bulk Sales Law is complied with.

WHO BENEFITS MOST FROM BULK SALES LAW?
The major purpose of the bulk transfer status is to afford a merchant’s CREDATORS an opportunity to satisfy their claims against a merchant who owes them money before the merchant can sell his/her assets and vanish with proceeds of the sale.

Question 2

Recovery Fund

Answer 2

$250,000 one salesperson
$50,000 one transaction

If The Commissioner paid from the Recovery Fund for settlement of a claim based upon a judgment against a licensed broker. If the BRIKER is BANKRUPT, he/she would be required to PAY THE FUND BACK IN FULL PLUS INTEREST.

Question 3

Real Estate Transfer Disclosure Statement (TDS)

Answer 3

Required for: 1-4 dwelling units and manufactured homes

Question 4

Blockbusting/ Panic Selling/Panic Pending

Answer 4

An illegal practice in which licensees or others encourage homeowners to sell because of an influx or expected influx of minorities into the area

Blockbusting or panic selling VIOLATE both federal and state FAIR HOUSING LAWS, as well as REAL ESTATE LICENSING LAW.

Question 5

Steering

Answer 5

The illegal practice of nudging buyers away or toward a specific area based on the presence or absence of protected class members in the area relative to the buyers.

Question 6

Redlining

Answer 6

The practice of a LENDER to refuse to LEND in a specific area, often based on the minority makeup of the area.

The term refers to the presumed practice of mortgage lenders of drawing red lines around portions of a map to indicate areas or neighborhoods in which they do not want to make loans. Redlining on a racial basis has been held by the courts to be an illegal practice.

Question 7

Bill of Sale

Answer 7

A written agreement by which one person sells, assigns or transfers to another his or her right to, or interest in, personal property. A bill of sale is sometimes used by a seller of real estate to evidence the transfer of personal property, such as when the owner of a store sells the building and includes the store equipment and trade fixtures.

The stock of a business is personal property. Personal property is transferred by a bill of sale.

The stock of a business sold under the bulk sales law is transferred by bill of sale.

Question 8

When must a seller disclose a MATERIAL CHANGE in condition of the property

Answer 8

The seller must disclose any material change in the condition of the property or the title that occurs or is discovered by the seller AFTER THE CONTRACT IS EXECUTED and PRIOR TO THE CLOSE OF ESCROW.

Known material facts are to be disclosed as soon as practical but before the purchase agreement is signed.

Question 9

resale certification

Answer 9

A resale certificate allows a buyer (retailer) to purchase inventory without paying sales tax as long as the goods are going to be resold to customers. In the sale of a business, sales tax is not charged on stock-in-trade which was held for resale.

A seller’s permit is issued by our agency and allows you to make sales in California. Once you have a seller’s permit, you may issue resale certificates to your suppliers to buy items you will sell in your business operations. Issuing a resale certificate allows you to buy these items without paying tax to the seller.

Question 10

Fair Housing Laws

Answer 10

A developer cannot gear ads to just one group. Racial quotas are also considered discriminatory. Using prices to exclude certain racial groups also violates fair housing laws.

Question 11

Natural Hazard Disclosure Statement

Answer 11

In addition to the usual Transfer Disclosure Statement required by Civil Code Section 1102.6, a seller (or the seller’s agent) must give the prospective buyer a separate “Natural Hazard Disclosure Statement” if the residential property lies within one or more of six statutorily specified areas:

1) A special flood hazard area designated by the Federal Emergency Management Agency.
2) An area of potential flooding in the event of a dam failure, designated by the state Office of Emergency Services.
3) A very high fire hazard severity zone designated by the California Department of Forestry and Fire Protection.
4) A wildland fire area that may contain substantial forest fire risks and hazards, designated by the State Board of Forestry.
5) An earthquake fault zone designated by the State Geologist.
6) A seismic hazard zone designated by the State Geologist.

Question 12

Real Estate Commissioner

Answer 12

The Real Estate Commissioner is appointed by the governor and serves at the governor’s discretion. The Real Estate Commissioner determines administrative policy and enforces that policy in the best interests of those dealing with real estate licensees.

Question 13

Holden Act (Financial Discrimination Act of 1977)

Answer 13

The Act prohibits financial institutions (banks, savings & loans, or other financial institutions, including mortgage loan brokers, mortgage bankers and public agencies) from engaging in discriminatory loan practices.

The Holden Act prohibits state financial institutions from engaging in the practice of REDLINING.

The term REDLINING refers to the presumed practice of mortgage lenders of drawing red lines around portions of a map to indicate areas or neighborhoods in which they do not want to make loans. Redlining on a racial basis has been held by the courts to be an illegal practice.

Question 14

Fair Employment and Housing Act (FEHA)

Answer 14

California’s Fair Employment and Housing Act (FEHA) prohibits housing discrimination based on marital status as well as race, color, religion, sex, national origin or ancestry. The Department of Fair Employment and Housing enforces the law, which is based on the former Rumford Fair Housing Act.

Failure to include accommodations for handicapped people when constructing a new building. Failure to design or build a multi-family dwelling of four or more units in a manner that allows disabled persons access and use is considered discrimination.

Question 15

civil law

Answer 15

A system of law codified by statutes.

Question 16

Rumford Fair Housing Act.

Answer 16

Rumford Fair Housing Act. The Rumford Fair Housing Act was passed in 1963 by the California Legislature to help end racial discrimination by property owners and landlords who refused to rent or sell their property to “colored” people.

Question 17

“company dollar”

Answer 17

Money left to brokerage after paying commissions

The amount the broker gets after all commissions are paid to the associate brokers or associate agents is called the company dollar. The operational expenses of the brokerage are paid out of the company dollar.

Multiple Choice Question. company dollar. A money left to brokerage after paying commissions.

The term “company dollar” is the amount leftover after all commissions have been paid out.

Question 18

advance-fee rental agent

Answer 18

It is a practice of some brokers to obtain a nonrefundable fee from the seller in advance to cover the advertising of properties or businesses for sale while giving no guarantee that a buyer will be found.

An advance-fee rental agent collects a fee in advance from prospective tenants to find them suitable rental properties. An advance-fee rental agent must have a Prepaid Rental Listing Service license (PRLS), but real estate brokers are exempt from this license requirement. PRLS contracts must be in writing and approved by the Real Estate Commissioner 10 CALENDAR DAYS BEFORE THEY ARE USED.

An “advance fee” is any fee paid before any services are rendered. Specifically, it is a practice of some brokers to obtain a nonrefundable fee from the seller in advance to cover advertising of properties or businesses for sale while giving no guarantee that a buyer will be found. Such agreements must be submitted and approved by the Real Estate Commissioner at least 10 days prior to use.

a prepaid fee to cover advertising and promotional costs

Question 19

What is the maximum amount that the Recovery (Fund) Account willing to pay

Answer 19

$50,000 per TRANSACTION, with a possible total aggregate maximum of
$250,000 per LICENSEE.

Question 20

Lead-based Paint Disclosure

Answer 20

WENT INTO EFFECT IN 1996
FOR HOMES BUILT BEFORE 1978

This requires that potential buyers and renters of housing BUILT PRIOR TO 1978 receive certain information about lead and lead hazards in the residence prior to becoming obligated to buy or rent, and provides the opportunity for an independent lead inspection for buyers. Sellers, landlords, and agents are responsible for compliance.

Sellers of homes built BEFORE 1978, and their agents, must disclose to potential purchasers the presence of any known lead-based paint hazards that affect the property. This law also applies to residential landlords and their tenants.

“Target housing” means any housing constructed prior to 1978, except housing for the elderly or persons with disabilities (unless any child who is less than 6 years of age resides or is expected to reside in such housing) or any 0-bedroom dwelling.

**ALSO KNOW THAT LEAD BASED PAINT LAWS WENT INTO EFFECT IN 1996.

Question 21

Alquist-Priolo Earthquake Fault Zone Act

Answer 21

The Alquist-Priolo Earthquake Fault Zone Act was passed to prevent buildings CONSTRUCTED FOR HUMAN OCCUPANCY from being constructed astride active faults.

The State Geologist has identified earthquake fault zones called “Special Studies Zones.” Any development located within one of these Special Studies Zones (which is not exempt) MUST HAVE A GEOLOGIC ANALYSIS.

The Alquist-Priolo Special Studies Zones Act of 1972, renamed the “Alquist-Priolo Earthquake Fault Zoning Act” in 1994, regulates development and construction of buildings intended for human occupancy in Earthquake Fault Zones. These zones span the “surface traces” of delineated active faults. The “typical” zone boundaries are set back approximately 660 feet on either side of the fault trace or 1/4 MILE IN WIDTH.

Question 22

Subdivided Land Law

Answer 22

=The Subdivided Lands Act
A consumer protection statute primarily intended to ensure adequate disclosures are made to protect buyers of subdivided parcels.

The Subdivided Lands Act regulates public offerings of land in subdivisions for sale or lease and is interpreted and enforced by the California Department of Real Estate.

Question 23

What are the 3 federal control of subdivisions

Answer 23

1) Subdivided Lands Law
2) Map Act
3) Interstate Land Sales Act

Subdivided Lands Law
A disclosure law enacted to protect buyers of subdivided parcels. A public report is required for subdivisions of five or more parcels. They must give the public report to any person, at any time, upon request.

Subdivision Map Act
An act providing for local control of subdivisions. Cities and counties are required by state law to adopt an ordinance to regulate subdivisions.

Interstate Land Sales Act
Facilitates regulation of interstate land sales, to protect consumers from fraud and abuse in the sale or lease of land.

In addition to state control under the Subdivided Lands Law and control under the Map Act, the federal government controls subdivisions under the Interstate Land Sales Act. The Act requires developers to file a development statement describing the details of a subdivision with the Secretary of Housing and Urban Development. The California public report can be substituted for the federal report.

The Interstate Land Sales Act applies to developments of 25 or more unimproved residential parcels of less than five acres each that may be promoted by mail or through interstate commerce. Exempt from the act are cemetery lots and sales to developers.

A federal law, enacted in 1968, that regulates interstate land sales by requiring registration of real property with the Office of Interstate Land Sales Registration (OILSR) of the U.S. Department of Housing and Urban Development (HUD).

Facilitates regulation of interstate land sales, to protect consumers from fraud and abuse in the sale or lease of land.A regulated developer is to provide each purchaser with a disclosure document called a Property Report. The Property Report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement and gives the purchaser at a minimum a 7-day period to cancel the purchase agreement.

Question 24

After reconciliation (cross referencing that funds) of trust account, a broker finds funds he can not account for. What does he do?

Answer 24

reconciliation is done once a month to verify finances

Unexplained trust account overages are trust funds and unless the broker can establish the ownership of such funds, the funds must be MAINTAINED IN THE BROKER’S TRUST FUND ACCOUNT OR IN A SEPARATE FUND ACCOUNT ESTABLISHED TO HOLD OVERAGES (CalBRE Reference Book — A Real Estate Guide, Pg. 506).

Question 25

Why does each city or county appoint a Planning Commission?

Answer 25

Because it is required by statute.

The formation of a Planning Commission is required by state law.

Question 26

blind advertising

Answer 26

ADS MUST HAVE:
-NAME 
-ADDRESS
and if a broker or agent is advertising they MUST SAY THAT THE ADVERTISER IS A BEOKER OR AN AGENT
or ELSE they are considered blind ads.

Blind advertising is advertising that does NOT INCLUDE the NAME and ADDRESS of the PERSON PLACING THE AD, only a phone number or post office box address.

Licensed brokers are generally prohibited by state license laws from using blind ads.

Question 27

Real Estate Commissioner

Answer 27

The Real Estate Commissioner is appointed by the governor and serves at the governor’s discretion. The Real Estate Commissioner determines administrative policy and enforces that policy in the best interests of those dealing with real estate licensees.

The real estate commissioner issues regulations (COMMISSIONERS REGULATIONS) to aid in the administration and enforcement of the real estate law.

Question 28

trust funds

Answer 28

Money or other things of value that are received by a broker or salesperson on behalf of a principal or any other person, and which are held for the benefit of others in the performance of any act(s) for which a real estate license is required.

It is LEGAL for a broker to place all trust funds received into ONE TRUST FUND ACCOUNT as long as he keeps accurate records of beneficiary transactions.

Question 29

Research this…

Answer 29

18. In making adjustments to effective gross income for management expenses, on which of the following would an adjustment be made:

(a) An apartment which is occupied by an owner who is also the property manager.
(b) An apartment which is occupied by an on-site manager who receives no compensation.
(c) An apartment which is occupied by an on-site manager who lives in his apartment rent-free in return for his services.
(d) A manager from a neighboring building owned by the same owner.

Your answer: (a) is not correct.

The correct answer is c: Since the on-site manager is living in his unit rent-free, the amount of rent which should be paid by the manager is the management fee and can be deducted by the landlord as an operating expense. The owner may not charge for managing the property himself. If an on-site manager receives no compensation, there would be nothing for the owner to deduct. A manager’s salary on another building owned by the same owner would be deducted as an expense against the income from the building he manages.

Question 30

The Subdivided Lands Act vs Subdivision Map Act

Answer 30

The Subdivided Lands Act
A consumer protection statute primarily intended to ensure adequate disclosures are made. The Subdivided Lands Act regulates public offerings of land in subdivisions for sale or lease and is interpreted and enforced by the California Department of Real Estate.

The Subdivided Lands Law is directly ADMINISTERED by the REAL ESTATE COMMISSIONER.

Its objective is to protect purchasers of property in new subdivisions from fraud, misrepresentation, or deceit in the marketing of subdivided lots, parcels, units and undivided interests in California.

Subdivision Map Act
An act providing for local control of subdivisions. Cities and counties are required by state law to adopt an ordinance to regulate subdivisions.

The Subdivision Map Act covers local control over the physical aspects of a subdivision. Under this Act, subdividers are required to file a tentative map to the local planning commission showing streets, property lines, utilities, etc.

Any lot division falls under local control of the Subdivision Map Act.

An act providing for local control of subdivisions. Cities and counties are required by state law to adopt an ordinance to regulate subdivisions.

Question 31

What should a seller or seller’s agent do if they are uncertain if the property is located within a natural hazard area?

Answer 31

If the seller (or seller’s agent) is not sure, they should hire a third-party professional who specializes in natural hazard disclosures, pay for the cost of obtaining this information, and find out if the property is located within one of the specified hazard zones.

Question 32

Rules about storing a broker’s records electronically.

Answer 32

Copies of real estate documents, such as all listings, real estate purchase agreements, trust fund records, and any other type of real estate related documents can be stored on electronic image storage media if the following requirements of Regulation 2729(a) are satisfied:

1. The electronic image storage shall be nonerasable “write once, read many,” that DOES NOT allow changes to the stored document or record.
2. Records copied and stored in electronic format shall be retained for three years.
3. Electronic records should be backed up daily.
4. The broker shall provide, at his or her expense, a paper copy of any document or record requested by the BRE.

**Look out for another question relating to what storage formats are allowed. A broker may store records on paper, electronic, or microfiche.

Question 33

**Look out for another question relating to what storage formats are allowed for Broker’s records

Answer 33

A broker may store records on:

• paper,
• electronic, or
• microfiche.

Question 34

Trust Fund vs Trust Fund Bank Account

Answer 34

Trust Funds
Money or other things of value that are received by a broker or salesperson on behalf of a principal or any other person, and which are held for the benefit of others in the performance of any act(s) for which a real estate license is required.

Trust Fund Bank Account OR TRUST ACCOUNT
An account set up by a broker, attorney or other agent at a bank or other recognized depository, into which the broker deposits all funds entrusted to the agent by the principal or others; ALSO CALLED an EARNEST MONEY or ESCROW ACCOUNT.

Question 35

Earnest Money

Answer 35

The CASH DEPOSIT (including initial and additional deposits) paid by the prospective buyer of real property as evidence of good-faith intention TO COMPLETE A TRANSACTION.

Question 36

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

Answer 36

Since banks sometimes have service charges, out of necessity, the broker is allowed to maintain up to $200 of personal funds in a trust account to cover these type of bank charges. Trust funds may not be used to pay for these type of expenses. The better practice is to have the bank charge the broker’s office or general account for the trust account fees and charges.

Question 37

Vicarious liability

Answer 37

The principal is responsible for all acts of his agents within the authority of the contract.

That a principal is held vicariously liable and must pay damages to an injured third person does not excuse the agent who actually committed the tortious acts. A person is always liable for his or her own torts (unless the person is insane, involuntarily intoxicated, or acting under extreme duress).

Question 38

public report

Answer 38

A disclosure statement required by the Subdivided Land Law stating that a buyer is not obligated until he or she has read the report and signed a receipt.

A subdivision (requiring a public report) is the dividing of improved or unimproved land for the purpose of sale, lease, or financing INTO FIVE OR MORE PARCELS.

**MUST BE GIVEN TO ANY PERSON, AT ANY TIME, UPON REQUEST. PRIOR TO THE SALE OF THE FIRST LOT IN THE SUBDIVISION.

Subdivider must give the public report TO ANY PERSON, AT ANY TIME, UPON REQUEST.

Also MUST give report PRIOR TO THE SALE OF THE FIRST LOT IN THE SUBDIVISION.

Question 39

When converting an existing residential property to a condominium, existing tenants must be given how many days notice?

Answer 39

Before approving the conversion of an existing residential property to a condominium, community apartment, or stock cooperative, the local government agency cannot give its approval unless each of the existing tenants is given written notice of the developer’s intention to convert at least 180 days prior to the termination of the tenancy.

Question 40

What are the 3 federal control of subdivisions

Answer 40

1) Subdivided Lands Law
2) Map Act
3) Interstate Land Sales Act

Subdivided Lands Law
A disclosure law enacted to protect buyers of subdivided parcels. A public report is required for subdivisions of five or more parcels.

Subdivision Map Act
An act providing for local control of subdivisions. Cities and counties are required by state law to adopt an ordinance to regulate subdivisions.

Interstate Land Sales Act
Facilitates regulation of interstate land sales, to protect consumers from fraud and abuse in the sale or lease of land.

In addition to state control under the Subdivided Lands Law and control under the Map Act, the federal government controls subdivisions under the Interstate Land Sales Act. The Act requires developers to file a development statement describing the details of a subdivision with the Secretary of Housing and Urban Development. The California public report can be substituted for the federal report.

A federal law, enacted in 1968, that regulates interstate land sales by requiring registration of real property with the Office of Interstate Land Sales Registration (OILSR) of the U.S. Department of Housing and Urban Development (HUD).

Facilitates regulation of interstate land sales, to protect consumers from fraud and abuse in the sale or lease of land.A regulated developer is to provide each purchaser with a disclosure document called a Property Report. The Property Report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement and gives the purchaser at a minimum a 7-day period to cancel the purchase agreement.

The Interstate Land Sales Act applies to developments of 25 or more unimproved residential parcels of less than five acres each that may be promoted by mail or through interstate commerce. Exempt from the act are cemetery lots and sales to developers.

Question 41

Clearance Recieipt/Certificate

Answer 41

Used as protection FOR THE PURCHASER of a BUSINESS (The vendee (buyer) wants to avoid successor’s liability.)

Clearance Certificate’ A certificate that verifies that an entity has paid all its tax liabilities at the time that the entity ceases to exist or is transferred to a new owner.

To avoid any liability for unpaid sales tax, the purchaser of a business should obtain a clearance receipt from the state Board of Equalization stating that the sales tax has been paid through a particular date.

A sales tax clearance certificate allows someone purchasing an existing business to ensure that they will not be responsible for any unpaid sales taxes upon becoming the business’ new owner.

Question 42

The Subdivided Lands Act vs Subdivision Map Act

Answer 42

The Subdivided Lands Act
A consumer protection statute primarily intended to ensure adequate disclosures are made. The Subdivided Lands Act regulates public offerings of land in subdivisions for sale or lease and is interpreted and enforced by the California Department of Real Estate.

Subdivision Map Act
An act providing for local control of subdivisions. Cities and counties are required by state law to adopt an ordinance to regulate subdivisions.

An act providing for local control of subdivisions. Cities and counties are required by state law to adopt an ordinance to regulate subdivisions.

The Subdivision Map Act requires the subdivider to prepare and file a tentative map with the local planning commission.

The Subdivision Map Act covers local control over the physical aspects of a subdivision. Under this Act, subdividers are required to file a tentative map to the local planning commission showing streets, property lines, utilities, etc.

Any lot division falls under local control of the Subdivision Map Act.

Question 43

**Look out for another question relating to what storage formats are allowed for Broker’s records

Answer 43

A broker may store records on:

• paper,
• electronic, or
• microfiche.

Question 44

Trust Fund vs Trust Fund Bank Account

Answer 44

Trust Funds
Money or other things of value that are received by a broker or salesperson on behalf of a principal or any other person, and which are held for the benefit of others in the performance of any act(s) for which a real estate license is required.

Trust Fund Bank Account OR TRUST ACCOUNT
An account set up by a broker, attorney or other agent at a bank or other recognized depository, into which the broker deposits all funds entrusted to the agent by the principal or others; ALSO CALLED an EARNEST MONEY or ESCROW ACCOUNT.

A TRUST ACCOUNT MUST:

1) Designate the account as a trust account;
2) Name the broker as the trustee for the account; the broker may never delegate his/her accountability for the trust account.

Question 45

Earnest Money

Answer 45

The CASH DEPOSIT (including initial and additional deposits) paid by the prospective buyer of real property as evidence of good-faith intention TO COMPLETE A TRANSACTION.

Question 46

CC&Rs

Answer 46

Covenants, conditions and restrictions are limitations on land use, which are imposed by deeds, usually when land is subdivided. CC&Rs are a means of regulating building construction, density and use. May be referred to simply as restrictions.

(See 
covenant, 
restrictive covenants,
condition, 
restriction, 
deed restrictions, )

Question 47

covenant/ deed restrictions

Answer 47

Provisions placed in deeds to control future uses of the property.

Question 48

condition/condition subsequent

Answer 48

A fee simple estate, may be qualified by a condition subsequent. This means that the new owner must not perform some action or activity. The former owner retains a right of reentry so that if the condition is broken, the former owner can retake possession of the property through legal action.

Question 49

restriction

Answer 49

A limitation on the use of real property; public restrictions imposed by government include zoning ordinances; private restrictions imposed by deed may require the grantee to do or refrain from doing some action. (See CC&R)

Question 50

restrictive covenants

Answer 50

A clause in a deed that limits the way the real estate ownership can be used.

Question 51

When a deed contains discriminatory language or clauses:

Answer 51

Clauses which were written into deeds or CC&R’s which allow discrimination are unenforceable. There is no requirement that the deeds or CC&R’s must be rewritten.

Question 52

Notice of landlord to increase rent

Answer 52

A landlord’s notice of rent increase MUST BE IN WRITING. The landlord may DELIVER a copy of the notice PERSONALLY or BY REGULAR US MAIL, with proper postage and addressed to the tenant at the rental unit.

Question 53

When can a subdivider use a public report in their advertising?

Answer 53

A subdivider may use a public report in their advertising as long as they use it IN FULL.

They MUST use the report in its ENTIRETY.

Question 54

Exemptions to the requirement of Real Estate Transfer Disclosure Statement (TDS)

Answer 54

Certain types of transfers are specifically exempted in Civil Code 1102.1. They are as follows:

1) Transfers requiring a public report pursuant to 11018.1 of the Business and Professions Code and transfers pursuant to 11010.8 of the Business and Professions Code where no public record is required.
2) Transfers pursuant to COURT ORDER (such as probate sales, sales by a bankruptcy trustee, etc.)
3) Transfers by FORCLOSURE (including a deed in lieu of foreclosure and a transfer by beneficiary who has acquired the property by foreclosure or deed in lieu of foreclosure).
4) Transfers by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust.
5) Transfers from one CO-OWNER to one or more other CO-OWNERS.
6) Transfer made to a spouse or to a child, grandchild, parent, grandparent, or other direct ancestor or descendant. MADE TO DIRECT FAMILY
7) Transfers BETWEEN SPOUSES in connection with a dissolution of marriage or similar proceeding.
8) Transfers by the State of Controller pursuant to the Unclaimed Property Law.
9) Transfers or exchanges to or from any government entity.

*It should be noted, however that a real estate licensee still has a duty to conduct a reasonably competent and diligent visual inspection of accessible areas in almost all of the above situations. In other words although the seller is exempted from having to provide a disclosure statement in certain situations, a licensee must conduct this inspection and disclose the results of the inspection in almost all residential transactions involving one to four units.

Question 55

Real Estate Transfer Disclosure Statement (TDS)

Answer 55

The Real Estate Transfer Disclosure Statement (TDS) describes the condition of a property and, in the case of a sale, must be given to a prospective buyer as soon as practicable and before transfer of title.

Must be given when real property of 1 to 4 DWELLING UNITS is transferred by sale, exchange, installment land sale contract, ground lease coupled with improvements, lease with an option to purchase, or any other option to purchase.

Question 56

Visual Inspection

Answer 56

Listing and selling brokers/agents must each conduct a reasonably competent and diligent visual inspection of real property, which consists of 1 to 4 DWELLING UNITS, that is sold through said brokers/agents. The same obligation applies to MANUFACTURED HOMES (as defined in Health and Safety Code Section 18007) when the foregoing property is being transferred through brokers/agents.

The purpose of the visual inspection is to disclose to the prospective buyer all material facts affecting the property’s value, desirability, and intended use.

This inspection/disclosure requirement applies to property of 1 to 4 dwelling units, but does not apply to the sale of new homes as part of a subdivision project when the sale is either subject to or exempted from the issuance of a Public Report.

Question 57

How long does a person have to file a suit against a Licensee for breech of duty?

Answer 57

A lawsuit alleging a breach of a licensee’s duty must be filed within TWO YEARS from the date of occupancy or the date of recordation of the deed to the buyer or the date of close of escrow, whichever one occurs first.

Question 58

constructive eviction

Answer 58

Actions of a landlord that so materially disturb or impair a tenant’s enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent. (See eviction, actual eviction, lease)

When the landlord (lessor) engages in constructive eviction the tenant may move WITHOUT giving the thirty day notice or may correct the situation by paying for the repair and deducting the bill from the rent. This is called “RENTAL OFFSET” and the tenant may do this TWICE in one 12 month period.

Question 59

actual eviction

Answer 59

The legal process that results in the tenant’s being physically removed from the leased premises.

Question 60

eviction

Answer 60

1. The legal process of removing a tenant from the premises as a result of a breach of a lease.
2. The distrubance of a tenant’s enjoyment of any material part of a leased premises by an act of the landlord, or by a claim of superior title by a third party. (See actual eviction, constructive eviction, lease, retaliatory eviction)

Question 61

retaliatory eviction

Answer 61

An eviction due to a tenant’s complaints to the landlord, a public agency or tenant association. It is illegal for a landlord to decrease services, increase rent or evict the tenant within 180 days of such a complaint. (See eviction)

Question 62

A broker is selling an apartment complex and puts together a prospectus which shows a 12% yield. In the prospectus, the broker shows the correct gross scheduled income, but fails to show a vacancy and bad debt deduction. He also fails to include management, maintenance and several other operating expenses. The buyer buys the property based on the income analysis given to him by the broker. The BROKERr is guilty of:

Answer 62

The question does not state whether the omission of the operating expenses was intentional or whether it was an oversight. If it was INTENTIONAL, the broker would most likely have committed FRAUD since he would be attempting to deceive the buyer.

If the broker’s actions were NOT INTENTIONAL, it would be MISREPRESENTATION. While there are no criminal penalties for misrepresentation, this type of conduct could make the purchase contract voidable, expose the licensee to civil damages and lead to the suspension or revocation of his/her real estate broker license.

Question 63

misrepresentation

Answer 63

A false statement or concealment of a material fact made with the intention of inducing some action by another party.

Misrepresentations and Failures to Disclose. Legally, a misrepresentation is when a real estate broker misstates some material feature of the property. Often lumped in with misrepresentations are failures to disclose, which is when a broker fails to address or reveal a material feature of the property entirely.

Question 64

misrepresentation vs fraud

Answer 64

Misrepresentation is an OVERSIGHT
Fraud is INTENTIONALLY deceiving the buyer

A LISCENSEE MAY BE DISCIPLINED FOR EITHER FRAUD OR MISREPRESENTATION

Question 65

How long must a broker hold their records for?

Answer 65

In California, real estate brokers must hold on to their records for three (3) years.

That means all listings, deposit receipts, cancelled checks, trust fund records and other documents executed in connection with any transaction must be kept.

Records can be created and kept in electronic format or they can be converted to electronic format for storage purposes.

Question 66

What records must a broker keep?

Answer 66

That means all listings, deposit receipts, cancelled checks, trust fund records and other documents executed in connection with any transaction must be kept.

Question 67

What formats can a broker keep records?

Answer 67

A broker may store records on:

• paper,
• electronic, or
• microfiche.

Records can be created and kept in electronic format or they can be converted to electronic format for storage purposes.

Question 68

“as-is” clause

Answer 68

An “as-is” clause by itself does not relieve a residential property seller or broker from liability for latent defects which they knew of or latent defects which the seller or broker had a duty to inspect for and discover. This is because an “as-is” clause by itself never bars claims of fraudulent misrepresentation and does not even bar claims of negligent misrepresentation, concealment, or nondisclosure.

Question 69

latent defect

Answer 69

A hidden structural defect that would not be discovered by ordinary inspection and that threatens the property’s soundness or the safety of its inhabitants.

Some states impose on sellers and licensees a duty to inspect for and disclose latent defects. Buyers have been able to either rescind the sales contract or receive damages when a seller fails to reveal known latent defects. The courts have also decided in favor of the buyer when the seller neglected to reveal violations of zoning or building codes.

Question 70

patent defects

Answer 70

Patent defects are those which can be discovered by reasonable inspection.

Question 71

Patent vs Latent defects

Answer 71

patent=obvious

latent=not obvious

Question 72

Brownfield

Answer 72

The Environmental Protection Agency (EPA) defines a Brownfield as “real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.” Brownfields are often abandoned, closed or under-used industrial or commercial facilities, such as an abandoned factory in a town’s former industrial section or a closed commercial building or warehouse in a suburban setting. Brownfields, however, can be located anywhere and can be quite small.

Question 73

Deposits and Down Payment can be in the form of:

Answer 73

A down payment or deposit may be cash or non-cash. It may be cash, check, personal note made payable to the seller, or even a pink slip to a car. If it is in the form of a promissory note, the broker must disclose this fact to the seller before the offer is accepted.

Question 74

Earnest Money Deposit vs Down Payment

Answer 74

EMD vs. Down Payment: Final Words. … A down payment is the amount of money the buyer must produce for the lender to approve the loan on the home. In its simplest form, the earnest money deposit is a promise to the home seller, and a down payment is a promise to the lender.

Question 75

Does a buyer have to pay an Earnest Money Deposit AND Down Payment?

Answer 75

The earnest money deposit is an important part of the home buying process. … Sellers rarely accept offers without deposits. Assuming that all goes well and your offer is accepted by the seller, the earnest money will go toward the down payment and closing costs.

Question 76

Resale Certificate vs Clearance Certificate

Answer 76

Resale Certificate
A resale certificate allows a buyer (retailer) to purchase inventory without paying sales tax on it as long as the goods are going to be resold to customers.

Clearance Certificate
A sales tax clearance certificate allows someone purchasing an existing business to ensure that they will not be responsible for any unpaid sales taxes upon becoming the business’ new owner.

Question 77

Operating expenses

Answer 77

Operating expenses are the costs of running and maintaining the property.

Examples include:

• accounting and legal services
• advertising
• insurance premiums
• maintenance
• management fees
• property taxes
• repairs
• reserves and replacement
• supplies
• utilities

Question 78

Licensing when delinquent in child support

Answer 78

In accordance with Section 17520 of the Family Code, CalBRE is precluded from issuing or renewing a full-term license if the applicant is on a list of persons (obligors) who have not complied with a court order to provide child support payments. The Department of Child Support Services compiles the list from information provided by the District Attorney of each county in California.

CalBRE will issue a 150-day license to an otherwise qualified applicant who is on the list of child support obligors. CalBRE will advise the applicant that the license applied for cannot be issued unless a release is furnished to CalBRE from the District Attorney’s office during the 150 days.

CalBRE also receives a supplemental list of obligors who are over four months delinquent in child support payments. CalBRE compares this list to the total real estate licensee population. If there is a match of an existing licensee and the license is not due for renewal for at least six months, the licensee will be advised that the license will be suspended if the delinquency is not cleared within 150 days. The suspension will remain in effect until the delinquency is cleared.

Question 79

Selling agent

Answer 79

“Selling agent” means the agent who obtained the offer from the buyer.

Question 80

Can a broker pay a non-employed salesperson?

Answer 80

A salesperson may only collect a commission from his or her employing broker. Likewise a broker may not pay a commission to anyone other than his employed salespeople.

Question 81

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

(a) Soil analysis
(b) Interview neighbors
(c) Aerial photos
(d) Drainage patterns

Answer 81

(A)
The correct term is Environmental Site Assessment (ESA). In the United States, an environmental site assessment is a report which identifies potential or existing environmental contamination liabilities. The actual sampling of soil, air, groundwater and/or building materials is typically NOT conducted during a Phase I ESA.

Question 82

After selling a mobile home, how long does a licensee have to submit a a contract of sale to the Department of Housing and Community Development (HCD)?

Answer 82

10 CALANDER DAYS

A real estate licensee must give written notice to HCD of the transfer on an HCD form not later than the end of the 10th calendar day after the sale. (Real Estate Commissioner’s Regulation 2861.)

Question 83

In a proposed conversion of a tenant’s building from residential property to a condominium has the right to:

Answer 83

purchase the unit that he/she lives in

The tenant must be offered the same or better terms and conditions that such unit would be initially offered to the general public.

Question 84

Public Report

Answer 84

A disclosure statement required by the Subdivided Land Law stating that a buyer is not obligated until he or she has read the report and signed a receipt.

GOOD FOR 5 YEARS FROM THE DATE OF ISSUANCE

Question 85

According to the guidelines establised by the Department of Housing and Urban Development,

(a) “Good neighborhood”
(b) “Retiree’s Dream House”
(c) “Female roommate wanted”
(d) “Chapel on site”

Answer 85

The correct answer is b: Ads may NOT be written which are AIMED AT ONLY A CERTAIN GROUP OF PERSONS. “Retiree’s dream house” implies that only retired persons would be welcome and is considered discriminatory.

Question 86

Conditional Public Report AND Final Public Report

Answer 86

Conditional Public Report 
An interim (provisional or temporary) report that allows a subdivider to ender a binging contract proper to issuance of a public report. 

Public Report
A disclosure statement required by the Subdivided Land Law stating that a buyer is not obligated until he or she has read the report and signed a receipt.

Because the public report may take months to compile, the subdivider may begin taking reservations for future purchases on the basis of an approved conditional public report (called the “pink report”). No sales can be closed or transaction completed, however until the final public report (called the “white report”) is received.

Question 87

What should a broker do if a salesperson quits at their brokerage?

Answer 87

The Commissioner’s Regulations state that upon termination of employment of a salesperson, the broker shall immediately return the license certificate to the salesperson and immediately notify the commissioner, thereof in writing.

Question 88

The listings between a broker and salesperson are the property of

Answer 88

The Broker

The listing agreement is a contract between the broker and the seller. It remains the property of Broker even if Salesperson changes brokers and the listing remains valid.

Question 89

Desk Costs

Answer 89

The term “desk costs” reflect the fact that salespeople do, in fact, make use of support staff, have telephone calls, need desk space, and take up some of the time of colleagues and managers.

Overhead is divided by the number of salespersons NOT desks.

Question 90

**62)Seller is required to deliver the “Homeowner’s Guide to Earthquake Safety” to the buyer of any one-to-four unit property BUILT prior to WHAT YEAR?

Answer 90

In addition to the earthquake disclosure requirements contained in Civil Code Section 1102 since 1991, SELLERS OF 1-4 UNIT HOMES BUILT BEFORE 1960 must deliver to the buyer, “as soon as practicable before the transfer”, a copy of The Homeowner’s Guide to Earthquake Safety and disclose certain earthquake deficiencies.

The booklet contains a reporting form that may be used for this disclosure. The Seller’s agent provides the seller of 1-4 unit homes built before 1960 with a copy of the booklet for delivery to the buyer.

Sellers agent–>booklet–>Seller–> Buyer

Question 91

Homeowner’s Guide to Earthquake Safety

Answer 91

A document produced by the State of California Seismic Safety Commission intended to help inform homeowners on earthquake safety issues in homes.

SELLERS OF 1-4 UNIT HOMES BUILT BEFORE 1960 must deliver to the buyer this booklet.

Question 92

Properties built before which year DO NOT need a geological report?

Answer 92

Residential properties built before 1960 and masonry buildings with wood-frame floors or roofs built before 1975, require the seller or agent to deliver to the buyer the “Homeowner’s Guide to Earthquake Safety,” and if the property is commercial the “Commercial Property Owner’s Guide”.

**If the buyer receives these booklets, neither the agent nor the seller is required to obtain a geological report.

If the property is in an earthquake fault area, a Natural Hazard Zone Disclosure Statement must be delivered to the buyer.

Question 93

REALTOR®

Answer 93

A registered trade name that may be used only by members of the state and local real estate boards affiliated with the National Association of REALTORS® (NAR). The term REALTOR® designates a professional who subscribes to associations of REALTORS® to govern real estate practices of members of the board. The use of the name REALTOR® and the distinctive seal in advertising is strictly governed by the rules and regulations of the national association.

Question 94

The Realtor Code of Ethics

Answer 94

The Realtor Code of Ethics is the cornerstone of the National Association of Realtors ethics training. It guides Realtors and also shows the public the level of commitment, education and dedication to their profession that each member of NAR possesses.

(One Realtor may not solicit owners who have listed their property with another licensed real estate broker.)

Question 95

Dedication

Answer 95

Dedication is the transfer of privately owned land to the public with the intent that the land will be accepted and used for public use.

The transfer of privately owned land to the public under approval of the Map Act would be considered DEDICATION

Question 96

Business formulas for:
Net Worth
Profit
Gross Income

Answer 96

As to running a business, which all of the following are correct

Assets - liabilities = net worth
Income - expenses = profit
Total sales = gross income

Question 97

How long does a person have after passing the real estate exam to apply for their license?

Answer 97

1 Year from he date of passing

A person must apply for their license within one year from the date you successfully completed (passed) your state licensing examination.

Question 98

How often do trust funds need to be reconciled?

Answer 98

To assure the accuracy of trust fund records, they must be reconciled at least once-a-month, usually at the end of each month.

Question 99

Thirteenth (13th) Amendment to the United States Constitution (1868)

Answer 99

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

*The constitutionality of all Fair Housing laws is based on the 13th Amendment of the Constitution.

Question 100

If asked about the race of an offeror what is the broker to do

Answer 100

The broker is NOT ALLOWED TO ANSWER THE QUESTION. The race of a buyer is not a material fact.

Question 101

A trust account must:

Answer 101

1) Designate the account as a trust account;
2) Name the broker as the trustee for the account; the broker may never delegate his/her accountability for the trust account.

Question 102

Who instals curbs, gutters, streets, and utilities in a new subdivision?

Answer 102

As a condition of approval, DEVELOPERS must provide plans for installation and/or improvement of curbs, gutters, streets, and utilities.

Question 103

How long after receiving the TDS does the buyer have to rescind the contract?

Answer 103

THREE DAYS after delivery in person or FIVE DAYS after delivery by deposit in the mail to terminate the purchase agreement.

Section 1102.3 of the Civil Code says, “If any disclosure or any material amendment of any disclosure required to be made public by this article, is delivered after the execution of an offer to purchase, the transferee shall have THREE DAYS after delivery in person or FIVE DAYS after delivery by deposit in the mail to terminate his or her offer by delivery of a written notice of termination to the transferor or transferor’s agent.”

Question 104

A profit-and-loss statement would include all of the following

Answer 104

Operating expenses,
gross profit, AND
interest charges.

**Value of inventory WOULD NOT BE INCLUDED
The value of inventory would appear on the balance sheet.

Question 105

Blanket mortgage/Blanket encumbrance

Answer 105

“BLANKET ENCUMBRANCE” means a trust deed or mortgage or any other lien or encumbrance, mechanic’s lien or otherwise, securing or evidencing the payment of money and affecting more than one unit in a condominium

A blanket loan, or BLANKET MORTGAGE, is a type of loan used to fund the purchase of more than one piece of real property. Blanket loans are popular with builders and developers who buy large tracts of land, then subdivide them to create many individual parcels to be gradually sold one at a time.

Question 106

The most common violation of the Commissioner’s Regulations concern

Answer 106

trust fund accounts and records

The BRE’s Enforcement Section receives and processes a large number of complaints each year that are investigated and referred to the Bureau’s Legal Section for disciplinary action. Trust fund handling and record keeping violations is the most common problem area. We see case after case in which brokers handle trust monies on behalf of others and either convert the monies to their own use, or do not have the expertise to maintain proper accounting records and end up with shortages in their trust accounts. To avoid problems in this area, all real estate brokers should be familiar with the laws and regulations that govern the handling of trust funds by real estate brokers.

Question 107

Trust funds must be placed in authorized account by when?

Answer 107

If the broker (or broker’s salesperson) fails to place the funds into one of the three authorized places (1. neutral escrow account 2. in the hands of the offeree 3. in a trust account maintained b the licensee) within THREE BUSINESS DAYS following receipt of the funds by the broker or by the broker’s salesperson, he/she is liable for commingling the funds.

THREE AUTHORIZED ACCOUNTS FOR TRUST FUNDS

1. neutral escrow account
2. in the hands of the offeree
3. in a trust account maintained by the licensee

Business and Professions Code Section 10145 and Commissioner’s Regulation 2832 require that a trust account meet the following criteria:

1. designated as a trust account in the name of the broker as trustee;
2. maintained with a bank or recognized depository located in California; and
3. not an interest-bearing account for which prior written notice can, by law or regulation, be required by the financial institution as a condition to withdrawal (except as noted in the discussion below of “Interest-Bearing Accounts”).

Question 108

(97) When enforcing the Subdivision Lands Law, the Real Estate Commissioner is protecting purchasers from:

Answer 108

fraud and misrepresentation in the marketing and financing of subdivisions.

The Subdivision Lands Law (found in the Business and Professions Code) regulates the marketing and financing of the subdivision to protect prospective purchasers.

Question 109

The Unruh Civil Rights Act

Answer 109

The Unruh Civil Rights Act prohibits housing discrimination as to sex, race, color, religion, ancestry, or national origin in all accommodations and business establishments (of every kind).

Question 110

R-Value

Answer 110

the capacity of an insulating material to resist heat flow. The higher the R-value, the greater the insulating power.

Federal law requires that a “new home” seller (including a subdivider) DISCLOSE in every sales contract the type, thickness, and R-VALUE RATING of the insulation which has been or will be installed. (Federal Trade Regulation Section 460.16; Public Resources Code Section 25402 et seq.)

Question 111

Federal and State Fair Housing Laws

Answer 111

The fundamental basis for fair housing throughout the United States stems from the 13th Amendment (which abolished slavery) 1865.

(Federal)

Civil Rights Act of 1866:
Citizens of all races shall enjoy the same rights enjoyed by white citizens to inherit, purchase, lease, sell or hold real and personal property.

Civil Rights Act of 1968 (Federal Fair Housing Act):
This act prohibits discrimination in HOUSING based on race, color, sex, religion, or national origin. A 1988 amendment added familial status and disability.
(THIS ACT PROHIBITS STEERING, BLOCKBUSTING/panic selling, AND REDLINING)

(State)

Unruh Civil Rights Act:
Prohibits discrimination by a BUSINESS on the basis of race, color, religion, sex, marital status, national origin or ancestry.

Fair Employment and Housing Act (Rumford Act):
Prohibits discrimination based on race, color, religion, sex, marital status, and national origin, or ancestry.

Business and Professions Code:
Provides for the Commissioner disciplinary action against licensees for discriminatory practices

Question 112

Complaints involving violations of discrimination are sent to:

Answer 112

The Department of Fair Employment and Housing

Question 113

8) 29)Application asking for marital status/ race

Answer 113

LOAN APPLICATION: Applicant is NOT OBLIGED to disclose marital status or race. (Not file a complaint wit commissioner or supply info so credit history can be properly checked)

RENTAL APPLICATION: It is considered DISCRIMINATION TO REQUIRE DISCLOSURE OF MARITAL STATUS on a rental application.

MY THOUGHTS:
If it is REQUIRED it is DISCRIMINATION
if it is an OPTION, a person does not have to answer

Question 114

13) 14)An Unlicensed Secretary

Answer 114

*Can only take messages and type for agents.
(They cannot quote prices or prepare and mail post cards for salesperson)

*Can gather information and help the broker create ad copy but the broker MUST APPROVE THE AD COPY.

Question 115

16) If a broker pays an unemployed agent or agent accepts commission from un-employing broker, what does this violate?

Answer 115

VIOLATES THE REAL ESTATE LAW

It is NOT permissible if in writing and IT IS NOT CONSIDERED FRAUD

Question 116

17) When must a person apply for a real estate license after passing the real estate exam?

Answer 116

Within one year of the examination.

NOT within one year of NOTIFICATION OF PASSING

Question 117

24) Copies of real estate transaction documents must be kept for

Answer 117

By the BROKER for 3 years

NOT by the SALESPERSON for 3 years

Question 118

***27)ALL MATERIALS USED IN OBTAINING ADVANCED FEE AGREEMENTS MUST BE SUBMITTED TO THE COMMISSIONER _______ BEFORE BEING USED.

Answer 118

10 CALENDAR DAYS BEFORE THEY ARE USED.

Materials include but not limited to contract forms. letters or cards used to solicit prospective sellers, and rasio and television advertising.

Question 119

*28)Surrender:

Answer 119

Occurs when a tenant and landlord agree to allow a termination of the lease.

There is no financial liability on either the landlord or tenant.

Question 120

34) When is a subdivider required to notify the Real Estate Commissioner?

Answer 120

ANY MATERIAL CHANGE involving the subdivision must be reported.

Examples of material change are: physical changes, changes in contracts, or changes in deed restrictions.
New ownership would also be included.

Question 121

35) a subdivider sold five 1-acre lots to Mr. D and optioned 5 lots to Mr. B. What course of action does the subdivider have to take as a result of this action?

Answer 121

He/she must Notify the Real Estate Commissioner of a Material Change.

The Commissioner’s Regulations states that if the owner of a subdivision OPTIONS OR SELLS 5 OR MORE PARCELS TO ANOTHER, it constitutes a MATERIAL CHANGE and the owner or original subdivider must IMMEDIATELY notify the Commissioner.

Question 122

**43) With regards to a public report what is considered a MATERIAL CHANGE?

Answer 122

Examples of material change are: physical changes, changes in contracts, or changes in deed restrictions.
New ownership would also be included.

Commissioner Regulation states that All Material Changes must be reported to the Commissioner ASAP.

Question 123

46) Deed of Partial Reconveyance

Answer 123

Releasing a portion of the property in a BLANKET LOAN/ENCUMBRANCE as each individual lot is sold.

Question 124

*54) Who is responsible for delivering the TDS (Real Estate Transfer Disclosure Statement) to the Buyer?

Answer 124

The seller and any broker(s)/agent(s) involved are to participate in the disclosures.

If more than one broker/agent is involved, the broker/agent WHO OBTAINED THE OFFER MADE BY THE BUYER is to deliver the disclosures to the prospective buyer unless the seller instructs otherwise.

http://www.dre.ca.gov/files/pdf/re6.pdf

Question 125

**63) Mello-Roos

Answer 125

Mello-Roos Community Facilities Act of 1982

Mello-Roos, are special “community facility districts” established by local governments in California where special taxes are assessed as a means of obtaining additional public funding to finance dedicated public facilities and/or services. Counties, cities, special districts, joint powers authority, and schools districts in California use these financing districts to pay for public works and some public services.

Mello-Roos liens are usually municipal bonds issued to fund streets, sewers, and other infrastructure needs before a housing development is built.

The SELLER OF A 1-4 DWELLING UNIT PROPERTY or a lease (for more than 5 years) subject to a lien of a Mello-Roos community facility district must make a good faith effort to obtain from the district a DISCLOSURE concerning the SPECIAL TAX and give it to the PROSPECTIVE BUYER.

**FAILURE TO GIVE NOTICE OF MELLO-ROOS TAX before signing the sales contract allows the BUYER or TENANT a 3-DAY RIGHT OF RECESSION AFTER RECIPT OF THE NOTICE.

Question 126

**66) 67)Where are real estate licensees required to place funds from a transaction

and how many days do they have to place it there?

Answer 126

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

1. a neutral escrow account/depository
2. in the hands of the offeree or owner or,
3. in a trust account maintained by the licensee

WITHIN 3 BUSINESS DAYS FOLLOWING THE RECIPT OF FUNDS

Question 127

83)Does a Broker have to maintain numerous trust fund accounts or just have one?

Answer 127

They may use ONE but he must keep RECORDS OF BENEFICIARY TRANSACTIONS

Question 128

*84) A broker owns many rental properties. He is selling one of the properties and the buyer gives him a check as a deposit. What should he do with the deposit?

Answer 128

The rents and deposits are PERSONAL FUNDS TO THE BROKER.
*Remember, the deposit belongs to the seller and in this case the seller is the broker. Rents only belong in trust accounts when the property doesn’t belong to the broker and the broker is managing the property for a different owner.

Question 129

85)To use a fictitious business name for real estate, you must

Answer 129

Obtain a BRE License bearing the fictitious business name

Question 130

86)A flood hazard exists when an area floods

Answer 130

MORE 2X IN 10 YEARS

Question 131

*89) If a condominium owner says an owner cannot place a for sale sign in front of their condominium, what right does this infringe on

Answer 131

the RIGHT OF ALIENATION (the right to sell)

It would be considered “restraint of trade”.

(NOT FREEDOM OF SPEECH, which was what I thought it was…)

Question 132

*94) Spectrometer

Answer 132

highly reliable device that detects alpha particles that are emitted by radon gas.

Question 133

*95) Prepaid Rental Listing Service (PRLS)

Answer 133

A Prepaid Rental Listing Service (PRLS) license is required for the business of supplying prospective tenants with listings of residential real property for tenancy while collecting a fee at the same time or in advance of when the listings are supplied. Negotiation of the rental of property is not a part of this activity.

*If a prepaid rental service palns to move offices they MUST inform clients of the new address BEFORE the MOVE.