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California Practice of Real Estate and Disclosures (Includes Specialty Areas) — Printable Practice Pack
California state portion · the Business and Professions Code, DRE trust-fund rules and California's disclosure regime · 20 questions · Answer key on the last page · agentexamcoach.com
1.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
2.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
3.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
4.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
5.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
6.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
7.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
8.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
9.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
10.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
11.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
12.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
13.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
14.How many hours of continuing education does a California licensee complete for renewal?
(A)Twelve
(B)Sixty
(C)Forty-five
(D)Thirty
15.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
16.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
17.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
18.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
19.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
20.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
Answer key & explanations
1. A — The NHD statement discloses whether the property sits within designated statutory hazard zones such as flood, fire or seismic areas. It makes no promise of safety.
2. D — A fictitious business name used for licensed activity must be reported to and reflected by the Department, not merely filed locally.
3. C — The TDS requirement for covered residential sales cannot be waived, so an attempted waiver does not excuse delivery.
4. C — Advance fee agreements and accompanying materials must be filed with the Commissioner before use, and the funds are trust funds.
5. C — Advertising must accurately identify the responsible broker; stale affiliations mislead.
6. A — Tax classification never reduces the broker's statutory duty to supervise licensed activity.
7. B — On termination the broker must render a full accounting and deliver funds to whoever is entitled, less only agreed and earned fees.
8. B — A salesperson may be licensed under only one broker; working for another is unlicensed activity.
9. C — A broker may keep a limited amount of personal funds in a trust account solely to cover bank service charges. Anything beyond that is commingling.
10. B — Revocation is not always permanent. Reinstatement may be sought after the period the Commissioner sets, with the burden on the applicant.
11. B — In-person delivery gives three days; delivery by mail gives five.
12. A — Compensation for acts requiring a licence is prohibited, and a bare introduction can shade into licensed activity depending on what the person did.
13. C — A pending order prohibiting occupancy for contamination must be given to a prospective buyer, who may cancel if it is not.
14. C — Renewal requires 45 clock hours of approved continuing education within the renewal period.
15. A — California protects source of income, so refusing an applicant because assistance forms part of their income is unlawful discrimination.
16. D — Sellers in state responsibility areas must disclose defensible space compliance and provide documentation of it.
17. A — The manager must proceed through proper notice and legal process; self-help evictions and lockouts are unlawful.
18. C — All compensation flows through the employing broker, who pays each salesperson per their employment agreements.
19. C — Refusing to lend in a geographic area irrespective of the applicant's own qualifications is redlining.
20. C — California prohibits collecting compensation in advance for residential loan modification or forbearance services.
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