Section 2 - CA License Law

Question 1

Who is the Real Estate Commissioner?

Answer 1

1) Appointed by the governor.
2) Chief executive officer of DRE
3) Practicing real estate broker in CA for five years (or engaged in real estate activities for five of last 10 years)
4) Compensated for service
5) Determines policy, issues regulations to enforce law
6) Holds formal hearings for license or applicant issues

Question 2

Who is the Real Estate Advisory Commission?

Answer 2

1) Appointed by the commissioner
2) 10 members
3) Six licensed real estate brokers
4) Four non-licensed consumers
5) Not compensated
6) Discuss policy and make recommendations to the commissioner

Question 3

What is the purpose of the Real Estate Commissioner?

Answer 3

The real estate commissioner issues these regulations to help with the understanding and enforcement of real estate law and subdivided lands law.

Question 4

What are the 2 parts of the Business and Professions Code that make up real estate law?

Answer 4

Licensing AND

Regulation of Transactions

Question 5

What is true about real estate law?

Answer 5

1) The purpose of the real estate law is to protect the public safety.
2) Licensees must follow both the real estate law in the Business and Professions Code and the Regulations of the Real Estate Commission.

Question 6

What is the purpose of the CA DRE?

Answer 6

Sets and enforces licensing laws and regulations.

Question 7

What is the difference between real estate law and Regulations of the Real Estate Commissioner?

Answer 7

Regulations are used to enforce and clarify the law. Real estate licensees must abide by both.

Question 8

Consumers are not allowed to perform real estate activities for another person for any kind of payment unless they have a real estate license.
TRUE or FALSE

Answer 8

TRUE.

A license is required if a consumer wants to be paid for performing real estate activities.

Question 9

If a consumer wishes to sell their home on their own, they must obtain a real estate license first.
TRUE or FALSE

Answer 9

FALSE.

Consumers selling their own home do not need a real estate license.

Question 10

All are exempt from Licensing Requirements except…?
A) Apartment resident managers or their employees
B) Persons holding a duly executed power of attorney from the real property’s owner
C) Attorneys-at-law performing legal services for a client
D) Nonprofit organizations
E) None of the above

Answer 10

E.

All listed here are exempt from licensing requirements.

Question 11

All are exempt from Licensing Requirements except…?
A) Corporate officers or general partners who receive no special compensation for corporation or partnership real estate activities
B) Receivers, trustees in bankruptcy, or persons acting under court order
C) Trustees selling real property under a deed of trust
D) Escrow agents
E) None of the above

Answer 11

E.

All listed here are exempt from licensing requirements.

Question 12

What 4 activities are NOT allowed for unlicensed assistants?

Answer 12

1) Show listings
2) Solicit the public to use the brokerageʼs services
3) Host open houses
4) Negotiate

Question 13

Which activities can a PRLS licensee perform?

Answer 13

Provide listings of residential properties available for rent to prospective tenants

Question 14

When is a mobile home dealer license needed? On the sale of 1 , 2 or more mobile homes?

Answer 14

Licensees who advertise two or more mobile homes for sale.

Question 15

Edwina has a California salesperson license. Which of these statements is true?

A) She must associate with a broker in order to perform any real estate activities.
B) She must obtain a broker’s license before she can perform any real estate activities.
C) She’s allowed to perform a limited set of real estate activities with this license.
D) She’s allowed to perform all real estate activities, and may choose to work as an individual licensee or to associate with a broker.

Answer 15

A.

She must associate with a broker in order to perform any real estate activities.

Question 16

Licensees have some flexibility in courses they complete for CE, but there are mandatory topics that must be taken. What are the (5) mandatory topics?

Answer 16

CE hours must include:
agency, 
ethics, 
fair housing, 
risk management, and 
trust fund handling. 
Licensees must also complete CE hours on consumer protection topics, and possibly consumer service.

Question 17

Which agency must real estate licensees go through to gain the MLO endorsement?
A) Nationwide Mortgage Licensing System and Registry
B) California Department of Real Estate
C) Federal Deposit Insurance Corporation

Answer 17

A.

California DRE handles real estate licensing, but has no role in the MLO endorsement.

Question 18

Licensees go through the NMLS&R to obtain the MLO endorsement. What are the four requirements for obtaining this endorsement?

Answer 18

1) 20 hours in pre-licensing courses
2) Passing score on the combined national/state exam
3) Fingerprint submission
4) Credit report pull authorization

Question 19

Which federal act requires states to pass laws relating to mortgage loan originator (MLO) endorsements?

A) Consumer Financial Responsibility Act
B) Regulation Z
C) SAFE Act
D) Senate Bill 36

Answer 19

C. SAFE Act

The federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) seeks to protect consumers and reduce fraud related to mortgage loans by requiring states to pass laws related to mortgage loan originators (MLO).

Question 20

Revocation periods are for no more than one year.

TRUE or FALSE.

Answer 20

FALSE.
If a licensee has their license revoked, they must wait at least one year before applying for reinstatement, but the revocation period can last longer at the discretion of the Commissioner.