California · state portion

Free California Practice of Real Estate and Disclosures (Includes Specialty Areas) practice questions

10 original questions with full explanations. 37 of the 150 scored exam questions (about 25%) come from this area.

1. 1

   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
   Show answer & explanation

   Answer: D

   Language signalling preferences for household type or age can violate fair housing advertising rules.

2. 2

   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
   Show answer & explanation

   Answer: D

   First-contact materials must carry the licensee's name, number, and the identity of the employing broker.

3. 3

   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
   Show answer & explanation

   Answer: C

   Agents who repeat unverified claims as fact share liability for the misrepresentation.

4. 4

   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
   Show answer & explanation

   Answer: A

   Fraud requires knowledge of falsity and intent to induce reliance. An honest mistake is negligence at most.

5. 5

   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
   Show answer & explanation

   Answer: A

   A separate record per beneficiary shows each person's balance, which reconciliation compares against the control record.

6. 6

   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
   Show answer & explanation

   Answer: D

   The control record of all trust funds received and paid out is required regardless of amount.

7. 7

   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
   Show answer & explanation

   Answer: D

   Information suggesting a material defect must be disclosed even where the seller disputes it. The licensee discloses what is known and where it came from rather than adjudicating it.

8. 8

   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
   Show answer & explanation

   Answer: C

   Attorneys acting within their practice, trustees, and owners dealing with their own property are exempt; paid finders are not.

9. 9

   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
   Show answer & explanation

   Answer: B

   Familial status discrimination is unlawful; legitimate safety concerns are addressed through neutral rules.

10. 10

    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
    Show answer & explanation

    Answer: C

    Compensation for licensed activity, including referrals of real estate business, may be paid only to actively licensed persons.