1. Which lien attaches to all property of a debtor rather than one identified parcel?
- A. A mechanic's lien
- B. A trust deed lien
- C. A property tax lien
- D. A judgment lien
2. A mobile home park resident owns the coach but rents the space. What governs that tenancy?
- A. The Mobilehome Residency Law
- B. The Davis-Stirling Act
- C. The standard residential lease law
- D. The Subdivision Map Act
3. A zoning change leaves an existing gas station as the only non-residential use. What is it now?
- A. A legal nonconforming use
- B. A spot-zoned parcel
- C. An illegal use subject to closure
- D. A conditional use
4. A naturally occurring radioactive gas seeps into a home through the foundation. Which hazard is it?
- A. Asbestos
- B. Methane
- C. Radon
- D. Formaldehyde
5. A recorded declaration of restrictions caps all homes at 2,800 square feet. A later buyer builds larger. Who may enforce?
- A. No one, since restrictions expire at first resale
- B. Only the city through code enforcement
- C. Other owners benefiting from the common plan of restrictions
- D. Only the original subdivider personally
6. Two neighbours have treated a fence line as the boundary for decades though the survey differs. Which doctrine may apply?
- A. Eminent domain
- B. Adverse possession by grant
- C. Agreed boundary
- D. Escheat
7. Which characteristic of a 'conditional use permit' distinguishes it from a variance?
- A. It allows a use the zoning contemplates but requires review
- B. It requires a ballot measure
- C. It rezones the parcel permanently
- D. It excuses a hardship from dimensional rules
8. A property owner grants a conservation easement to a land trust, forever barring subdivision of the parcel. The owner later sells. Is the buyer bound?
- A. Yes — but only if the land trust re-records the easement after every sale
- B. No — the easement was personal to the granting owner and ended at the sale
- C. No — conservation easements expire after thirty years under California law
- D. Yes — a recorded conservation easement runs with the land and binds all successors
9. A homeowner's CC&Rs prohibit solar panels. Under California law, what is the position?
- A. Such outright bans are void; reasonable restrictions only
- B. Solar is banned unless the state issues a permit
- C. The CC&Rs control completely
- D. Solar is allowed only with HOA approval
10. An easement holder paves and widens a dirt path beyond its historical use. What is the concern?
- A. Abandonment of the easement
- B. Creation of a licence
- C. Overburdening the servient tenement
- D. Merger of the estates
11. Which lien attaches to real property without the owner's consent?
- A. A mortgage
- B. A judgment lien
- C. A deed of trust
- D. A voluntary lien for an HOA special assessment agreed by vote
12. An owner subdivides a parcel into two lots and sells the rear lot, which has access only across the front lot. The deed says nothing about access. What does the rear lot buyer have?
- A. A licence to cross that the front lot owner may revoke at any time
- B. An implied easement by necessity across the front lot from the common ownership
- C. A right to demand that the city construct a public road to the lot
- D. No access rights at all, because the deed failed to grant any easement
13. Which environmental hazard is most associated with homes built before 1978 and triggers a federal disclosure?
- A. Asbestos siding
- B. Radon gas
- C. Lead-based paint
- D. Formaldehyde insulation
14. Which power allows government to take private property for public use on payment of just compensation?
- A. Police power
- B. Eminent domain
- C. Taxation
- D. Escheat
15. Which common interest development gives the owner NO fee interest in land?
- A. A community apartment project (owners hold undivided fee)
- B. A planned development
- C. A stock cooperative
- D. A condominium
16. Which interest allows removing something of value from another's land, such as gravel?
- A. A licence
- B. A covenant
- C. A profit
- D. An easement in gross
17. Which of these would justify granting a variance?
- A. Neighbourhood popularity
- B. The owner's desire for a larger home
- C. An unusually shaped lot causing hardship
- D. Higher potential profit
18. Two people buy investment property taking equal shares with survivorship, stated in the deed. Which unities must exist?
- A. Time, title, interest and possession
- B. Marriage, title and possession
- C. Title and time only
- D. Possession and interest only
19. What does CEQA require for a project with potentially significant environmental effects?
- A. Nothing for private projects
- B. A negative declaration only
- C. A federal environmental assessment
- D. An environmental impact report
20. What is required before a city may adopt or amend zoning that intensifies land use?
- A. A unanimous vote of all affected owners
- B. Consistency with the general plan and public hearings
- C. Approval by the county grand jury
- D. Certification by the state controller
21. Under the appropriative water rights doctrine, who has the superior claim?
- A. The most recent permit holder
- B. The first to put the water to beneficial use
- C. The owner nearest the source
- D. The largest landholder
22. A married person buys a home with inheritance money during marriage. How is it characterised absent agreement?
- A. Community property automatically
- B. Joint tenancy with the spouse
- C. Tenancy in common
- D. Separate property traceable to the inheritance
23. A seller's agent knows the seller is considering bankruptcy. A buyer's agent asks 'is the seller motivated?' What is the compliant answer?
- A. Say the seller is not motivated, to strengthen the seller's position
- B. Decline to characterise the seller's circumstances — motivation is confidential
- C. Say the seller is very motivated, because it will attract a faster offer
- D. Disclose the possible bankruptcy because it is a material fact
24. Which is TRUE of a 'net listing' in California?
- A. Legal only for commercial and industrial property listings
- B. Legal only with full disclosure of the broker's compensation before acceptance
- C. Legal without any special disclosure to the seller at all
- D. Illegal in every circumstance under the Real Estate Law
25. When must a licensee give a party a copy of a listing agreement that party has just signed?
- A. Within five days of the signing date
- B. At the time the signature is obtained
- C. When the first offer is later presented
- D. Only if the party requests a copy
26. Which situation creates an agency by ratification?
- A. A court declares an agency after litigation
- B. The parties' conduct implies mutual consent from the start
- C. The agent posts a bond covering the transaction
- D. The principal accepts the benefits of an unauthorised act with full knowledge
27. A property manager handling an owner's portfolio over years is best described as which kind of agent?
- A. A general agent
- B. A gratuitous agent
- C. A special agent
- D. A universal agent
28. A buyer's agent receives a counteroffer by email at 11 p.m. on the night before it expires at noon. The agent does not check email until 1 p.m. the next day. What duty is implicated?
- A. The duty to account — the agent must log the time the email was received
- B. The duty of confidentiality — the agent must not reveal when the email was read
- C. The duty of diligence — an agent must monitor communications so the client can act in time
- D. No duty — agents cannot be expected to check email outside of business hours
29. An agent presents an offer and the seller says 'I'll think about it.' What is the offer's status?
- A. Converted into an option
- B. Rejected by the delay
- C. Still open until accepted, rejected, revoked, or lapsed
- D. Automatically accepted after 24 hours
30. An agent represents a seller. A prospective buyer shares that they 'just lost a bidding war and will pay anything.' What should the agent do?
- A. May share it with the seller — it is information from a non-client
- B. Must refuse to hear such information
- C. Must keep it confidential as fiduciary information
- D. Must tell the buyer to get their own agent first
31. What does the duty of 'utmost care, integrity, honesty and loyalty' describe in the agency statute?
- A. The fiduciary standard owed to the agent's own principal
- B. The standard owed equally to both parties
- C. A duty owed only in dual agency
- D. The standard for advertising accuracy
32. A listing agent learns the buyer is a licensed agent buying for their own account. What must the buyer disclose?
- A. Their intended resale price
- B. Their licensed status, in writing, to the seller
- C. Their commission split with their broker
- D. Nothing — buying personally needs no disclosure
33. Which agent has authority limited to one specific act or transaction?
- A. A special agent
- B. A general agent
- C. A universal agent
- D. An ostensible agent
34. A broker's salesperson signs a listing in the salesperson's own name rather than the broker's. Who holds the agency?
- A. The salesperson personally
- B. Both jointly
- C. Neither until ratified
- D. The employing broker
35. A buyer asks their agent to write an offer with a 'love letter' mentioning the buyer's family and religion. What should the agent advise?
- A. Caution against it — such letters raise fair housing concerns for the seller's decision
- B. Encourage it, because personal letters help buyers win bidding wars
- C. Refuse to submit the offer at all if a letter is attached to it
- D. Require the seller to respond to the letter in writing
36. A buyer's agent's commission comes from the seller through the MLS offer of compensation. Does this change whom the agent represents?
- A. Yes — payment by the seller makes them the seller's agent
- B. Yes — it creates an automatic dual agency in the transaction
- C. No — representation is fixed by agreement and disclosure, not payment
- D. Only if the buyer raises an objection in writing
37. A seller rejects a full-price offer from a buyer of a protected class and accepts a lower offer days later. Beyond fair-housing liability, what about the commission?
- A. Only a sale that actually closes escrow can generate a fee claim
- B. No commission claim is ever possible on an offer the seller rejects
- C. The commission is halved by statute when any offer is refused
- D. The broker earned it by producing a ready, willing and able buyer
38. A buyer asks their agent to submit an offer the agent believes is far too low. What should the agent do?
- A. Submit it with a note disowning it
- B. Submit it as instructed
- C. Refuse and explain why
- D. Raise the price before submitting
39. An agent accepts an undisclosed bonus from a contractor for steering the client's repair work. What has occurred?
- A. An ordinary referral arrangement
- B. A permitted business courtesy
- C. A conflict cured by later disclosure
- D. A secret profit breaching loyalty
40. Which is TRUE regarding a buyer representation agreement's termination date?
- A. Only the buyer may set the termination date
- B. Buyer agreements expire automatically after 30 days
- C. No termination date is required for buyer agreements
- D. An exclusive buyer agreement must state a definite termination date
41. What is 'agency by estoppel'?
- A. Agency created when the agent posts a surety bond
- B. Agency terminated by an order of the superior court
- C. Agency a principal cannot deny because conduct caused third-party reliance
- D. Agency created by a written agreement between the parties
42. Which best describes the term 'principal' in agency law?
- A. The amount of the loan on the property
- B. The buyer in every transaction
- C. The broker in charge of the office
- D. The person who authorises the agent to act on their behalf
43. What is the agency consequence when a salesperson's licence hangs under Broker A but they negotiate a deal 'on the side' through Broker B?
- A. A private business matter to be settled between the two brokers
- B. Unlawful — a salesperson acts only through one employing broker
- C. Permitted so long as both brokers are informed of it afterwards
- D. Permitted for commercial transactions though not residential ones
44. Which claim against an agent requires proving the agent KNEW a statement was false?
- A. Breach of an express contract term
- B. Breach of the visual inspection duty
- C. Negligent misrepresentation of a fact
- D. Intentional misrepresentation (fraud/deceit)
45. An undisclosed dual agency is discovered after closing. What is a likely consequence for the broker?
- A. No consequence once escrow has closed
- B. A written warning from the Commissioner
- C. Commission forfeited and damages to both sides
- D. Commission reduced to the standard rate
46. A seller signs a 6-month exclusive listing. After 2 months the seller accepts a job transfer and asks to cancel. What governs?
- A. Listings can never be cancelled before their stated expiry date
- B. The listing's cancellation terms; the broker may agree or claim damages
- C. The broker must refund all of the marketing costs already spent
- D. The seller may cancel freely at any time without any consequence
47. A broker holds a buyer's deposit while also representing the seller. What is the broker's role as to those funds?
- A. A trustee holding for the beneficiary
- B. A creditor of the buyer
- C. A guarantor of the sale
- D. The owner of the funds
48. What must a licensee do before representing a client in a language the client does not read well?
- A. Ensure the client actually understands
- B. Rely on the signatures obtained
- C. Have a relative sign on their behalf
- D. Decline the representation outright
49. An income property's value rises while its NOI is unchanged. What happened to the implied capitalisation rate?
- A. It rose
- B. It is unchanged
- C. It became negative
- D. It fell
50. A subject has three bedrooms and the comparable has four, with the extra worth $25,000. What is the adjusted comparable price if it sold for $640,000?
- A. $665,000
- B. $640,000
- C. $615,000
- D. $590,000
51. A comparable sold with the seller paying unusually large buyer concessions. What adjustment is needed?
- A. No adjustment, price is price
- B. An adjustment for conditions of sale
- C. An adjustment to the subject
- D. An adjustment for location
52. A property generates $8,000 monthly gross rent and sells for $1,152,000. What is the monthly GRM?
53. A seller's home has a foundation crack repair estimated at $40,000 and comparable homes without the issue sell for $900,000. The seller lists at $895,000. What does the principle of contribution suggest?
- A. The home is worth $940,000 because repaired foundations add value
- B. Buyers will likely discount by the cost to cure or more
- C. The list price is appropriate because the repair is under 5% of value
- D. The home is worth the full $900,000 because the crack is not visible
54. An appraiser is asked by the lender to 'hit the number.' What should the appraiser do?
- A. Comply with the request in order to keep the client
- B. Decline — appraiser independence rules prohibit value pressure
- C. Report the lender immediately to the DRE
- D. Raise the value slightly as a reasonable compromise
55. An investor's property has an adjusted basis of $500,000 after $150,000 of depreciation. It sells for $900,000. How much of the gain is subject to depreciation recapture?
- A. $250,000
- B. $350,000
- C. $150,000
- D. $400,000
56. Which risk does a longer projected holding period most directly add to a discounted cash flow analysis?
- A. Elimination of the need for a terminal value estimate
- B. Greater uncertainty in later-year forecasts and the reversion
- C. A lower present value for the earliest cash flows
- D. Removal of vacancy assumptions from the model
57. A building has an estimated useful life of 40 years and cost $400,000. Using straight-line, what is one year of depreciation?
- A. $8,000
- B. $10,000
- C. $16,000
- D. $40,000
58. Who is authorised to perform an appraisal for a federally related mortgage transaction?
- A. The escrow officer
- B. Any licensed real estate salesperson
- C. A licensed or certified appraiser
- D. The lender's loan officer
59. A property's expected NOI is $96,000. Market cap rates are 6% for low-risk and 8% for high-risk properties. The subject has a single tenant on a short lease. What value range is most defensible?
- A. Cannot be estimated without the replacement cost
- B. Toward $1,200,000 — the higher rate reflects the higher risk of the tenancy
- C. Toward $1,600,000 — the lower rate reflects the simplicity of one tenant
- D. Exactly $1,400,000 — the midpoint of the two rates
60. Why might a licensee's CMA differ from an appraiser's value?
- A. CMAs are more accurate because agents know the market
- B. CMAs target a listing price with limited data and no USPAP
- C. They must be identical by law in every transaction
- D. Appraisers always arrive at higher values than agents
61. How much gain may a married couple filing jointly exclude on the sale of a principal residence?
- A. $500,000
- B. $125,000
- C. $250,000
- D. $1,000,000
62. Two identical buildings: one leased to a national tenant, one to a start-up. Which has the lower cap rate and why?
- A. The start-up — its shorter lease means a lower rate
- B. They carry the same rate because the buildings match
- C. The national tenant — lower risk, investors accept a lower return
- D. The start-up — the higher rent potential raises value
63. A structure cost $500,000 new, has an economic life of 50 years, and is 12 years old. What is the accrued depreciation using the age-life method?
- A. $100,000
- B. $144,000
- C. $60,000
- D. $120,000
64. A lot's value is $200,000 and the total property value is $800,000. What is the land-to-value ratio?
- A. 75%
- B. 400%
- C. 25%
- D. 20%
65. Which approach is most appropriate for valuing a newly built public library with no sales or rental market?
- A. The income approach
- B. The sales comparison approach
- C. The cost approach
- D. The gross rent multiplier
66. Which sale would normally be excluded from a set of comparables?
- A. A sale in the same subdivision
- B. An arm's length sale last month
- C. A nearby sale of similar size
- D. A transfer between family members
67. Why is external (economic) obsolescence almost always incurable?
- A. It applies exclusively to owner-occupied homes
- B. It is created by deferred maintenance choices
- C. It accrues faster than physical deterioration
- D. Its cause lies outside the property boundaries
68. A building's gross income is $240,000 and it sold for $2,040,000. A similar building produces $270,000 gross. Using the GIM, what is its indicated value?
- A. $2,040,000
- B. $2,700,000
- C. $2,295,000
- D. $2,160,000
69. Which technique values land by deducting the income attributable to the building first?
- A. The gross income multiplier method
- B. The land residual technique
- C. The building residual technique
- D. The quantity survey cost method
70. Which party in a deed of trust is the lender?
- A. The beneficiary
- B. The grantor
- C. The trustee
- D. The trustor
71. A borrower pays $6,000 in points to reduce a $400,000 30-year loan's rate from 7% to 6.5%, lowering the payment by about $133/month. If the borrower sells in year 3, did the buydown pay off?
- A. Yes — points are always recovered at sale through higher equity
- B. No — points never pay off on any loan held under 10 years
- C. No — breakeven is about 45 months, longer than the 36-month hold
- D. Yes — the savings exceeded the cost by the end of year 2
72. A borrower's loan has a prepayment penalty of 6 months' interest on amounts prepaid over 20% of the balance in a year. The balance is $300,000 at 6%. The borrower pays off $120,000 in year 2. What is the penalty?
- A. $1,800 — 6 months' interest on the $60,000 prepaid above the 20% allowance
- B. $9,000 — 6 months' interest on the entire balance
- C. $3,600 — 6 months' interest on the full $120,000
- D. $0 — no penalty applies because the loan is being paid down
73. Which law requires a good faith estimate of settlement costs and prohibits kickbacks for referrals?
- A. ECOA
- B. The Unruh Act
- C. The Holden Act
- D. RESPA
74. What is the 'secondary mortgage market'?
- A. Where existing loans are bought and sold by investors
- B. Where borrowers apply for second mortgages
- C. Where mortgage brokers are licensed
- D. Where foreclosures are auctioned
75. One loan covers several parcels and allows individual lots to be released as they sell. What is it?
- A. A blanket loan
- B. A wraparound loan
- C. A package loan
- D. A participation loan
76. A $300,000 loan at 6% interest-only. What is the annual interest?
- A. $36,000
- B. $3,000
- C. $18,000
- D. $1,500
77. A lender chooses judicial foreclosure instead of a trustee's sale. What does the borrower gain?
- A. An automatic reduction of the loan balance
- B. Immunity from any deficiency judgment
- C. A statutory right of redemption after the sale
- D. A guaranteed extension of the payment term
78. Which practice does RESPA specifically prohibit between settlement service providers?
- A. Kickbacks for referrals
- B. Advertising jointly with disclosure
- C. Charging for actual services
- D. Offering discounts openly
79. A borrower locks a rate for 30 days; closing is delayed to day 35. What typically happens?
- A. The lock expires; a fee or new rate may apply
- B. The lender must close at the locked rate
- C. The rate is guaranteed forever
- D. The loan is cancelled
80. Which right does the Truth in Lending Act give a borrower refinancing their principal residence with a new lender?
- A. A thirty-day cooling-off period
- B. A three-day right to rescind
- C. A right to a free appraisal
- D. A guaranteed rate lock
81. Which loan feature does California's usury law NOT reach for most real estate loans?
- A. Loans between private parties are always exempt
- B. Loans under $100,000 are always exempt
- C. Loans arranged by a licensed real estate broker are exempt
- D. Loans secured by junior liens are exempt
82. Which Federal Reserve tool involves buying and selling government securities?
- A. Changing the reserve requirement for banks
- B. Setting the discount rate charged to banks
- C. Insuring deposits held at member banks
- D. Open market operations affecting money supply
83. A borrower receives a loan estimate with a $3,000 origination fee, then the closing disclosure shows $4,500. What rule applies?
- A. Tolerance rules — certain fees cannot rise without a valid changed circumstance
- B. Fees are free to change between the estimate and the closing
- C. The borrower must simply pay the higher amount at closing
- D. The loan becomes void because the fee increased at all
84. A decedent's home was bought for $100,000 and is worth $900,000 at death. The heir sells for $920,000. Taxable gain?
- A. $0
- B. $20,000
- C. $900,000
- D. $820,000
85. Buyer and seller both demand the deposit and neither will sign a release. What may escrow do?
- A. File an interpleader and let a court decide
- B. Hold the funds indefinitely without notice
- C. Split the funds equally between them
- D. Pay the party who deposited the funds
86. A seller's obligations under the purchase contract are generally absorbed at closing. What is that doctrine called?
- A. Subrogation of the buyer's rights
- B. Novation of the original agreement
- C. Merger of the contract into the deed
- D. Estoppel preventing later denial
87. Which item normally appears as a debit to the buyer at closing?
- A. The seller's prorated taxes owed
- B. The purchase price
- C. The earnest money deposit
- D. The seller's loan payoff
88. When does the escrow holder's agency change from dual to separate?
- A. At closing, each party's agent for their own items
- B. Never — escrow remains a dual agent at every stage
- C. When the buyer's deposit clears the trust account
- D. When either of the parties hires independent counsel
89. New construction is completed mid-year. What tax event does that trigger?
- A. A supplemental assessment from the completion date
- B. A waiver of taxes until the next fiscal year
- C. Reassessment of the entire neighbourhood
- D. A transfer tax on the construction value
90. A deed names the grantee as 'John Smith, a single man.' What does that vesting indicate?
- A. Community property
- B. Joint tenancy
- C. Tenancy in common
- D. Sole ownership (severalty)
91. Which vesting must be shown on a deed for a married couple to hold with survivorship as community property?
- A. Community property with right of survivorship
- B. Tenancy in common by halves
- C. Sole and separate property
- D. Community property generally
92. By how much does California's homeowner exemption reduce the assessed value of a principal residence?
- A. $70,000
- B. $25,000
- C. $4,000
- D. $7,000
93. A buyer receives an extra tax bill shortly after purchase reflecting the new assessed value. What is it?
- A. A documentary transfer tax
- B. A supplemental assessment
- C. A special assessment district levy
- D. A delinquent tax penalty
94. A married seller insists their spouse need not sign the deed to community property. What should escrow require?
- A. A separate property affidavit from the buyer
- B. Only the titled spouse's signature and licence
- C. The listing broker's certification of authority
- D. Both spouses' signatures for a valid community property conveyance
95. Which transfer avoids probate entirely?
- A. Property held as a tenant in common
- B. Property of an intestate decedent
- C. Property passing by will
- D. Property held in joint tenancy passing to the survivor
96. An advertisement reads 'perfect for a young professional couple.' What is the fair housing concern?
- A. It is permitted if the unit is small
- B. Only if rent is above market
- C. Nothing, as the phrase is merely descriptive
- D. It may express preference based on familial status and age
97. What must appear on a licensee's solicitation materials at first point of contact with a consumer?
- A. The licensee's home address and personal phone
- B. A copy of the agency disclosure form itself
- C. The consumer's rights under the recovery account
- D. Name, licence number, and responsible broker's identity
98. A seller tells the listing agent the roof was replaced 'two years ago' and produces no receipt. The agent advertises 'new roof.' The roof is twelve years old. Who bears responsibility?
- A. The seller alone, because the agent was entitled to rely on the owner's statement
- B. The agent alone, because advertising is entirely the agent's responsibility
- C. The seller for the false statement and the agent for repeating it without verification
- D. Neither, because a roof's age is not a material fact to most buyers
99. Which conduct would most likely support a finding of fraud rather than negligence against a licensee?
- A. Knowingly stating a false material fact
- B. Failing to notice a hidden defect
- C. Missing a contract deadline
- D. Giving an honest but wrong opinion
100. Which trust fund record must show the balance for each beneficiary at all times?
- A. The separate record for each beneficiary or transaction
- B. The columnar record of all trust funds received
- C. The bank's monthly account statement alone
- D. The reconciliation summary filed with the DRE
101. Which account record does the DRE require a broker to maintain for ALL trust funds received?
- A. A record kept only for funds exceeding one thousand dollars
- B. A record kept only for rents, not for sales deposits
- C. A record kept only when escrow is not used for the deal
- D. A columnar record of all trust funds received and disbursed
102. A licensee learns from a neighbour that the listed home flooded twice. The seller denies it. What should the licensee do?
- A. Rely on the seller's denial
- B. Ignore hearsay entirely
- C. Report the neighbour to the Commissioner
- D. Disclose the information and its source
103. Which person is exempt from real estate licensing when negotiating the sale of a property?
- A. A friend who receives a gift for negotiating terms
- B. An unlicensed assistant discussing price with a buyer
- C. An attorney acting in the course of a client's legal matter
- D. A neighbour who is paid a flat fee to find a buyer
104. An owner of a 30-unit building asks the property manager to screen out applicants 'with kids because of the pool.' What should the manager do?
- A. Screen out only families whose children are under five years old
- B. Refuse — familial status is protected; address safety with neutral pool rules
- C. Comply, since pool safety is a legitimate business reason for the owner
- D. Comply, but apply the exclusion only to units on the ground floor
105. A brokerage wants to pay a retired licensee a fee for referrals only. What determines legality?
- A. Whether the fee stays under a statutory amount
- B. Whether the referral is made in writing
- C. Whether the referrer holds a current active licence
- D. Whether the client consents to the payment
106. Which statement about the Natural Hazard Disclosure statement is accurate?
- A. It identifies statutory hazard zones
- B. It removes the need for a TDS
- C. It applies only to new homes
- D. It certifies the property is safe
107. A broker wishes to operate under a fictitious business name. What is required?
- A. Fictitious names are prohibited
- B. The Commissioner must own the name
- C. Only a county filing is needed
- D. The name must be approved and shown on the licence
108. A buyer waives the right to receive the Transfer Disclosure Statement in writing. What is the effect?
- A. The waiver shortens the delivery period
- B. The waiver binds the agents only
- C. The waiver is ineffective for a covered sale
- D. The waiver removes the seller's duty
109. A broker intends to collect an advance fee for a marketing programme. What must happen first?
- A. The fee must be deposited with a title company
- B. The client must waive any right to a refund
- C. The materials must be submitted to the Commissioner
- D. A separate bond must be posted with the county
110. A broker discovers that a former salesperson, now at another firm, is still using the broker's branded email signature in solicitations. What is the concern?
- A. A concern only if the former salesperson earns a commission
- B. No concern, because salespersons may keep their prior branding indefinitely
- C. Misleading advertising implying an affiliation that no longer exists
- D. A trademark matter only, outside the reach of the Real Estate Law
111. A salesperson is hired as an 'employee' with a salary. What supervision applies compared with an independent contractor?
- A. The same — the broker's supervisory duty does not depend on tax status
- B. More supervision is required only for contractors
- C. No supervision is needed for salaried employees
- D. Less supervision, since employees follow HR policies
112. What must a broker do with a property management agreement's trust funds when the owner terminates the arrangement?
- A. Transfer them to the new manager directly
- B. Account for and deliver the balance to the owner
- C. Hold them for one year
- D. Retain them against future fees
113. A salesperson's licence is held by Broker A. The salesperson wants to work weekends for Broker B. What is required?
- A. Permitted if both brokers sign a written sharing agreement
- B. Not permitted — a salesperson has only one employing broker at a time
- C. Permitted for rentals only, not for sales transactions
- D. Permitted if the salesperson notifies the DRE in writing
114. A broker's trust account holds client funds. How much of the broker's own money may sit in that account to cover bank service charges?
- A. Half of one month's charges
- B. No amount whatsoever
- C. A limited sum set by regulation
- D. Ten percent of the balance
115. A licensee's licence is revoked. When may they generally apply for reinstatement?
- A. Never, revocation is permanent
- B. After the period the Commissioner sets
- C. Only after ten years
- D. Immediately upon revocation
116. Which time limit applies to a buyer's TDS-based right to terminate after in-person delivery?
- A. Seven days
- B. Three days
- C. Five days
- D. Ten days
117. A licensee wishes to pay a finder's fee to a past client who referred a buyer. What is the safest position?
- A. Avoid it, as unlicensed activity may be compensated
- B. Pay only if under a small amount
- C. Pay through escrow to be transparent
- D. Pay it freely, referrals are exempt
118. A property was used as a methamphetamine laboratory and remains under a health order. What follows for the seller?
- A. Only the local authority may market the property
- B. The property may not be sold until it is demolished
- C. The order must be disclosed to any prospective buyer
- D. The listing must be withdrawn for one full year
119. How many hours of continuing education does a California licensee complete for renewal?
- A. Twelve
- B. Sixty
- C. Forty-five
- D. Thirty
120. An owner instructs the property manager to refuse applicants receiving housing assistance. How should the manager respond?
- A. Decline, as source of income is protected
- B. Ask the applicants to reapply later
- C. Comply, as owners set criteria
- D. Comply only for smaller buildings
121. A listed home lies within a state responsibility area for wildfire. What does the seller disclose?
- A. The date of the most recent roof replacement work
- B. The annual cost of the current fire insurance policy
- C. The distance to the nearest staffed fire station
- D. Compliance with defensible space clearance requirements
122. An hoarding tenant's unit becomes a health hazard affecting neighbours. What is the property manager's proper course?
- A. Written notice to cure, then lawful remedies if uncorrected
- B. Immediate lockout to protect the other tenants
- C. Rent withholding until the unit is cleaned
- D. Disposal of the tenant's belongings after 24 hours
123. A team of two salespersons shares compensation on a deal they co-listed under the same broker. How is the split handled?
- A. By direct payment between the two salespersons
- B. By the MLS according to its posted rules
- C. Through the employing broker under their written agreements
- D. Through the escrow holder at closing
124. A lender declines applications from one neighbourhood regardless of individual creditworthiness. What is the term for this?
- A. Steering
- B. Churning
- C. Redlining
- D. Blockbusting
125. A distressed homeowner is asked to prepay a licensee for a loan modification service. What is the position?
- A. It is permitted once the agreement is put in writing
- B. It is permitted where the fee is held in a trust account
- C. Collecting an advance fee for that service is prohibited
- D. It is permitted with the current lender written consent
126. A broker delegates review of contracts to an unlicensed office manager. What is the problem?
- A. Document review is a broker duty that may be delegated only to a licensee
- B. No problem — any competent employee may review contracts
- C. The manager must simply be bonded to review documents
- D. Only the DRE may review contracts for compliance
127. A licensee allows the licence to expire. What is the position during the two-year late renewal window?
- A. The licence converts into a restricted licence
- B. No licensed activity is permitted until renewal completes
- C. A temporary permit issues automatically on request
- D. Activity may continue while the fee remains outstanding
128. A seller refuses to complete the TDS and instructs the agent to tell buyers 'as-is'. What must the agent do?
- A. Complete the TDS form on the seller's behalf instead
- B. Comply with the seller, since as-is sales are fully exempt
- C. Withdraw from the listing immediately without discussion
- D. Explain the TDS is mandatory and cannot be waived by the seller
129. A licensee's personal website shows listings but no licence number anywhere. What does California require?
- A. Nothing, since websites are exempt from number display
- B. The licence number on the site's first point of contact pages
- C. Only the broker's phone number, not any licence number
- D. The number only on printed materials, never online
130. A licensee posts a client's confidential financial details in a public online forum seeking advice. Which duty is breached?
- A. Accounting
- B. Confidentiality
- C. Obedience
- D. Care
131. A buyer asks the listing agent to recommend a lender. The agent's brokerage owns a mortgage company. What must the agent do when recommending it?
- A. Give the written affiliated-business disclosure and say other lenders may be used
- B. Require the buyer to use the affiliate as a condition of the offer
- C. Recommend the affiliate without comment since affiliates are common
- D. Recommend only outside lenders because affiliates may never be named
132. What must be disclosed about a property adjacent to farmland in many California counties?
- A. The pesticide brand used next door
- B. A right-to-farm or agricultural operations notice
- C. The crop yield of the neighbouring farm
- D. Nothing unless livestock is present
133. A buyer signs an offer but dies before the seller accepts. What happens to the offer?
- A. It stays open for thirty days
- B. The buyer's agent may accept for them
- C. It is revoked by operation of law
- D. The estate must complete the purchase
134. A lease says rent is due on the 1st with a 5-day grace period. On the 7th, what may the landlord serve?
- A. A 60-day notice
- B. An unlawful detainer complaint immediately
- C. A 30-day notice to vacate
- D. A three-day notice to pay or quit
135. A landlord's failure to repair makes the unit uninhabitable and the tenant leaves. What has occurred?
- A. Surrender by agreement
- B. Abandonment
- C. Actual eviction
- D. Constructive eviction
136. Which landlord action is prohibited self-help in California?
- A. Changing the locks to force a tenant out
- B. Sending a rent reminder
- C. Serving a three-day notice
- D. Filing an unlawful detainer
137. An option to purchase is recorded. The optionor sells to a third party during the option period. What is the result?
- A. The optionee loses all rights under the option contract
- B. The third party takes title subject to the recorded option
- C. The option is extinguished by the sale to the third party
- D. The sale to the third party is void from the outset
138. What distinguishes a novation from an assignment?
- A. A novation must be recorded
- B. An assignment needs court approval
- C. An assignment requires consideration
- D. A novation releases the original party
139. A landlord and tenant agreed orally to a nine-month lease. The tenant leaves after three months and the landlord sues thirty months later. What is the likely result?
- A. Allowed — oral leases carry a four-year limitation period
- B. Allowed — lease claims have no limitation period at all
- C. Barred — oral leases are unenforceable from the start
- D. Barred — the two-year limit for oral contracts has passed
140. What does a 'time is of the essence' clause make of a one-day delay in tendering closing funds?
- A. A permissible grace period of up to ten days
- B. A potential material breach rather than a trivial one
- C. A matter escrow may excuse without the parties
- D. An automatic extension for weekend closings
141. Which requirement applies for a liquidated damages clause to bind in a residential purchase?
- A. Court approval before escrow may close
- B. Separate signature or initials by both parties on the provision
- C. Notarisation of the entire purchase agreement
- D. A deposit of at least ten percent held in escrow
142. Which clause states that the written document contains the parties' entire agreement?
- A. An acceleration clause
- B. A severability clause
- C. An integration clause
- D. A subordination clause
143. Which contract is enforceable despite no writing?
- A. A lease for eleven months
- B. A listing agreement for a house
- C. A two-year commercial lease
- D. A sale of a vacant lot
144. A seller and buyer agree to extend closing by 10 days but never sign an extension. Closing day passes. What is the position?
- A. The oral extension is fully binding on both of the parties
- B. The escrow holder decides whether the extension is valid
- C. The contract automatically extends for a reasonable period
- D. Either may be in breach — oral extensions are risky; the writing controls
145. A tenant assigns the lease with landlord consent and the assignee defaults. Who is liable?
- A. No one, since consent was given
- B. The original tenant remains liable unless released
- C. Only the assignee
- D. Only the landlord
146. A buyer makes an offer with a 3 p.m. Friday expiration. The seller signs at 2 p.m. Friday but the listing agent does not deliver the acceptance to the buyer's agent until Saturday. Is there a contract?
- A. No — acceptance must be communicated before the offer expires, and delivery came too late
- B. No — because acceptances must be delivered on a business day
- C. Yes — the seller signed before the deadline, which is all that is required
- D. Yes — because the delay was the listing agent's fault rather than the seller's
147. A purchase agreement provides that the buyer's deposit is retained if the buyer defaults. What is that clause?
- A. A liquidated damages provision
- B. A penalty clause, always void
- C. A specific performance clause
- D. An arbitration provision
148. A contract for an illegal purpose is best described as which of these?
- A. Voidable by either party
- B. Valid until challenged
- C. Enforceable if performed
- D. Void and unenforceable
149. A buyer transfers contract rights to a friend but stays liable if the friend defaults. What has occurred?
- A. A novation of the contract
- B. An assignment of the contract
- C. An accord and satisfaction
- D. A rescission by agreement
150. Which agreement must be in writing to be enforceable under the statute of frauds?
- A. An agreement to sell real property
- B. A one-month equipment hire
- C. A month-to-month residential tenancy
- D. An oral agreement to paint a fence