Level 4 Quiz

Mitch, your seller, has asked you about the tax ramifications of selling his townhome. What is your best response?

"You should ask your tax advisor. This is not my area of expertise."

Craig is a tenant with a year-to-year tenancy. How much notice must he give his landlord if he wants to terminate his lease?

30 Days

What is a legal agreement or promise made between two parties?

A covenant

What is a ground lease?

A residential lease or sublease for a specific term that is renewable forever, subject to the payment of ground rent

When should a licensee disclose any known material adverse facts about a property's physical condition to prospective buyers?

After the seller has provided the seller's disclosure but before a sales agreement is made

All commercial leases should contain the conditions under which the lease can be terminated; the names and signatures of all parties; and ______________________________.

Any additional information based on negotiations and specific situations

What items are generally sold with the property?

Any built-in components

Which of the following statements about when you must present the Consent for Dual Agency form to the seller is true?

As part of completing the listing agreement and again if a dual agency situation arises and you need the seller to reaffirm their consent

From an agent's perspective, what is one benefit of a buyer representation agreement?

Defines how and how much you will be paid

A landlord's right to file a petition, asking the district court to seize and sell the tenant's personal property for unpaid rent is known as ________________.

Distraint

Justin decided to build a privacy fence around his yard. He thought the fence was along the property line, but it turns out he built it one foot inside his neighbor's property. What is this an example of?

Encroachment

Which of the following is true about home inspections?

Every dwelling, no matter the age or size, should have a home inspection.

Misaligned doors and windows and cracked sheetrock can be signs of a ________ problem.

Foundation

Fred is buying Gary's property, which is listed with broker Sara. Who are the parties to the listing agreement?

Gary and Sara

In this type of commercial lease, the tenant leases the property where they intend to build a permanent structure.

Ground lease

Jim is a listing agent. What offers must he present to his client, and when?

He must present all offers as soon as practicable.

The use provision describes which of the following?

How the tenant will use the property, including allowable activities

What qualifies for an option period for a valid option contract is true?

If the contract does not state the length of the option period, a court will require the optionor to make the option period for a "reasonable time."

If the listing agent is not aware of a prospective buyer until that buyer presents an offer, when should the listing agent provide a copy of the seller's disclosure/disclaimer statement to the buyer?

Immediately upon receiving the offer

Historically, buyer representation has ___________.

Increased

A home inspection is recommended because _______________.

It gives the buyer a full and accurate picture of the home's condition

Why might an agent want a buyer to sign a buyer representation agreement?

It helps ensure buyer loyalty

In caveat emptor states, whose responsibility is it to obtain seller disclosures and provide them to the buyer?

Licensee representing the buyer

In caveat emptor states, whose responsibility is it to notify the seller of the seller's duty to disclose items that are required to be disclosed?

Licensee representing the seller

Which of the following could be a sign of a plumbing problem?

Low water pressure

Lucia feels it is only fair to any prospective buyers that she reveal any and all defects about the condition of her property. After all, if the roles were reversed and she were the buyer, she would want the seller to be honest with her. Based on this information, which of the following statements is true?

Lucia will complete the disclosure section of the Maryland Residential Property Disclosure and Disclaimer Statement form.

Which of the following requires all licensees to disclose material facts that they know—or should know—to every prospective buyer?

Maryland Broker's Act

Most often, what is the first course of action for disputed home warranty claims?

Mediation

A _____________ is the term used for an estate that conveys possession and control, but not title.

Nonfreehold estate

Which of the following would constitute a violation of Maryland lease laws on a landlord's part?

Not keeping detailed records of rent payments

In an option contract, prior to the optionee exercising the option to buy, which parties are bound to carry out their contractual obligations?

Only the optionor (seller)

In which type of listing agreement will a seller contract with multiple agents but only pay commission to the agent who locates a buyer?

Open listing

A(n) _________________ is an offer to purchase a specific piece of real estate, but without the obligation to buy it.

Option contract

This type of lease is one in which a tenant pays a base rent plus an allocated amount of gross sales above a certain threshold.

Percentage

Which of the following duties is part of the licensee's role in a residential lease transaction for a tenant client?

Represent the client's interest in all negotiations and transactions regarding the lease of the property.

A buyer who doesn't receive the seller's property condition disclosure statement before or upon entering into a sales contract has the unconditional right to _______________________________.

Rescind the sales contract any time before receiving the disclosure or disclaimer

In full seller disclosure states, whose responsibility is it to obtain the seller disclosure form and provide it to the buyer?

Seller

Bonnie always schedules a sit-down meeting with prospective buyers before she begins sending them data on properties. Why might this be?

She needs to define the buyer's needs and wants.

Who is the lessee in a lease agreement?

Tenant

One of the required elements of a valid option contract is ______________________.

The amount of consideration the optionee is paying the optionor

If the seller elects to complete the disclaimer section of the Maryland Residential Property Disclosure and Disclaimer Statement form, who is required to sign and date it?

The buyer and seller only

If the seller elects to complete the disclosure section of the Maryland Residential Property Disclosure and Disclaimer Statement form, who is required to sign and date it?

The buyer and seller only

Which of the following is a benefit of a redeemable ground lease?

The tenant can buy out the lease from the landlord

Why should a buyer ask the type and age of heating and cooling systems?

To get an idea of the potential problems or costs that may arise in older installations

What is the purpose of sharing the history of buyer representation with buyers?

To show the progression toward buyer representation over time

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker. Burt may legally do this as long as he is _____________.

Willing to pay Scott's commission, anyway

Missing, cracked, or displaced roof shingles can indicate ______ damage.

Wind

What is a buyer representation agreement?

A legal document that formalizes the working relationship between the agent and buyer client

Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who is the best person to help Cynthia prepare a lease option?

A real estate attorney

Roy purchased a newly constructed home with a warranty that covers major structural defects for 10 years and systems (HVAC, electrical, plumbing) for three years. After being in the home a few months, Roy notices the following defects and submits them all. Which one is likely NOT going to be covered by the warranty?

A tear in the carpet

Owners should complete the disclosure section of the Maryland Residential Property Disclosure and Disclaimer Statement only if they choose to disclose defects or other information about the property's condition they ________________.

Actually know

Armand and Cécile have recently purchased property from Egbert. An option contract for the land was sold with the property. A few days after buying the land, Armand and Cécile receive a call from Juliette, the optionee on the option contract. Juliette wants to exercise her option and purchase the property. Which one of the following statements about this situation is true?

Armand and Cécile are bound to the terms of the option contract and must sell the property to Juliette.

Why should buyers ask sellers of older homes whether they've replaced the wiring system?

Because out-of-date electrical wiring can cause a wide a variety of problems

Why would a buyer want to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value.

Which of the following statements is true about buyers and the Maryland Residential Property Disclosure and Disclaimer Statement?

Buyers can rescind a contract on the basis of having received an incomplete disclosure from the seller.

The right to determine how the property is used, and who may enter the property is known as _____________.

Control

Which of the following could be an indication of a foundation problem?

Crack in a basement wall

Emerald wants to sell his property "as is" and not have to make any representations or warranties about the condition of the property. Based on this information, which of the following statements is true?

Emerald must complete the disclaimer section of the Maryland Residential Property Disclosure and Disclaimer Statement form.

Emil is a listing agent who has a prospective buyer who is not represented by another licensee. In addition to providing the buyer with a copy of the seller's disclosure/disclaimer statement to sign and date, what other duties does Emil have to the buyer?

Emil must ensure that the buyer understands their rights and obligations with regard to the disclosure/disclaimer statement.

In which type of listing agreement does a seller contract with one listing agent but reserve the right to locate the buyer, and only pay the listing agent if an agent locates the buyer?

Exclusive Agency

Kirby has a listing agreement with Bob. If Kirby or another agent locates the buyer, Kirby gets his listing commission. However, if Bob locates the buyer, Kirby does not earn a commission. What type of listing agreement do they have?

Exclusive agency

Charlie and her girlfriend, Frankie, are buying a house together. Having found the perfect home, they made an offer without first having seen the seller's property disclosure statement. The statement arrived two days after they entered into the contract with the seller. How many days do Charlie and her girlfriend have to rescind their offer if they find something in the disclosure that makes them uncertain about the property?

Five days

Basement wall cracks and leaks can be indicators of __________ problems.

Foundation

In a ground lease situation, what does the ground tenant own?

Improvements (including buildings)

What is a major reason a buyer should sign a buyer representation agreement?

It assures the buyer of representation.

Which of the following statements about the Maryland Property Condition Disclosure Law is true?

It requires all sellers of single-family residential real properties to provide buyers with a written property condition disclosure or disclaimer statement.

The tenant is the ______ in a lease agreement.

Lessee

What does "caveat emptor" mean?

Let the buyer beware

Which of the following requires that real estate licensees make reasonable efforts to discover all material facts about each property they list?

Maryland Real Estate Commission's Code of Ethics

Which of the following is an example of an encroachment?

Michael installed a basketball hoop next to his driveway, six inches outside his property.

Which one of the following responsibilities requires the licensee to secure a profitable deal for the landlord that is also affordable for the commercial tenant?

Negotiate leases

This type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately.

Net

When is the seller required to provide the buyer with the Maryland Residential Property Disclosure and Disclaimer Statement?

On or before the buyer signs the purchase offer

When a buyer finances a newly built home with an FHA loan, the FHA requires the builder to ________.

Purchase a third-party home warranty to protect the buyer

Which of these types of tenants most often uses a percentage lease?

Retail

In caveat emptor states, whose responsibility is it to disclose any items required by law and respond honestly to any questions about the property's condition?

Seller

If a landlord has decided to keep a security deposit to cover damages or unpaid rent, what must the landlord do?

Send the tenant a written notice with 45 days of the tenant's termination notice that the security deposit will be withheld.

How does the term "break-even point" relate to percentage leases?

The landlord does not charge a percentage of sales until the tenant's sales exceed a break-even point.

Which of the following should all commercial leases contain?

The lease agreement start and end dates

Which statement should licensee Shannon disclose to prospective buyers about the property's condition? Assume Shannon has actual knowledge of all of these.

The presence of a leaky toilet in the upstairs bathroom

In addition to the address of the property, the lease agreement start and end dates, and the monthly rent and deposit amounts, which of the following should all commercial leases contain?

The purpose for which the space is being rented

In commercial lease agreements, the tenant pays the owner in exchange for ______________________________.

The right to operate their business on the property

By signing and dating MAR's "Notice to Buyer and Seller of Buyer's Rights and Seller's Obligations under Maryland's Single Family Residential Property Condition Disclosure Law" form, the buyer and seller are acknowledging that not only have they received the notice, but also that _______________________________________.

Their agents have informed them of their rights and obligations under Section 10-702 of the Maryland Code.

Why are galvanized pipes a problem in older homes?

They can rust and cause leaks and low water pressure.

What is the purpose of a listing agreement?

To spell out the agreement between the listing broker and the seller

Janyce, a real estate licensee, has found a way to work with prospective buyers without ever leaving her desk. She just sets them up with automated email messages for listings that meet their criteria, and answers any questions they have when they call. Is Janyce doing anything wrong?

Yes, because she should meet them before working for them.