Practice of Real Estate (Pool of Questions) 12 on exam

A licensed real estate broker who engages the services of a licensed salesperson on the basis that the broker can direct what the salesperson can do but not how it is done has A. engaged an independent contractor. B. discriminated illegally. C. practiced steering. D. established an employer-employee relationship.

A. A broker cannot control salespeople's working conditions as in an employer-employee relationship. An agent is not required to follow illegal instruction, such as discrimination.

The denial of a loan by a lender would NOT be a violation of federal fair housing laws if it were based on A. lack of income. B. sex. C. age. D. marital status.

A. Lack of income is an acceptable reason for denying a loan, provided all lawful sources of income are considered. Sex, age and marital status are protected classes under the federal fair housing laws.

Which of the following activities would be legal under the familial status category of the federal fair housing laws? A. Charging higher rents for people with pets B. Charging higher security deposits for families with children C. Segregating families within buildings D. Segregating families in certain buildings

A. Since pets are not a protected class, landlords may charge higher rents for renters with pets.

Most states require real licenses to be conspicuously displayed by the brokerage firm. What else is the broker of a real estate office required to conspicuously display? A. EHO poster B. Listings C. Civil Rights Act of 1866 D. ECOA legislation

A. The Equal Housing Opportunity poster with the logo of an equal sign inside the outline of a house must be displayed where it can be seen by the public.

All of the following statements correctly describe the E-Sing law EXCEPT A. E-Sign is one of two federal laws governing electronic contracting. B. E-Sign allows consumers to provide written consent if they wish to substitute electronic documents for written documents. C. E-Sign makes electronic records relating to the transaction legally enforceable even if a state statute requires that the records be in writing. D. E-Sign requires a detailed disclosure and consent process if the parties wish to substitute electronic signatures for written signatures.

B. E-Sign requires consumers to provide electronic consent if they wish to substitute electronic documents for written documents.

A real estate broker may A. refuse to rent to a qualified minority person. B. solicit listings in a minority neighborhood. C. refuse to negotiate with a minority person. D. change the terms of sale for a minority person.

B. Real estate licensees are allowed to solicitate listings in any neighborhood. Choices A, C, and D are all discriminatory. Discrimination is treating people differently when they are members of a protected class.

All the following statements correctly describe the Federal Telemarketing Law EXCEPT A. People may register with the Federal Trade Commission and are placed on do-not-call lists. B. Real estate licensees are not considered telemarketers under the law C. The law does not apply unless the call is intended to sell real estate, real estate services, or other products or services D. The rules are not intended to interfere with ongoing transactions

B. Real estate licensees are considered telemarketers under the Federal Telemarketing Law.

The federal fair housing laws prohibit which of the following types of private housing? A. A Lutheran organization giving preferences to its members in renting B. A Norwegian advertising his house for "Norwegians only" C. The Elks Club operating a rooming house on a nonprofit basis D. A Masonic Lodge operating a rooming house when the lodgings are not operated commercially

B. Religious organizations and private clubs may discriminate under certain circumstances (as long as they do not discriminate among its membership). An individual homeowner must comply with certain conditions to be exempt from federal fair housing laws.

The Civil Rights Act of 1866 prohibits discrimination in housing on the basis of A. religion. B. race. C. sex. D. handicap.

B. The Civil Rights Act of 1866 makes clear that there is no situation in which racial discrimination may be practiced.

The Federal Fair Housing Act of 1968 was amended in 1988 to prohibit A. blockbusting. B. discrimination against pregnant women. C. redlining. D. steering.

B. The Federal Fair Housing act was amended in 1989 to prohibit discrimination on the basis of familial status, which includes pregnant women. Blockbusting, redlining, and steering, were included in the Federal Fair Housing Act of 1968.

Disclosure of cost in a credit transaction is required by A. RESPA. B. Truth-in-Lending. C. the federal Equal Credit Opportunity Act. D. the 1968 Federal Fair Housing Act.

B. The answer is Truth-in-Lending. RESPA provides consumer protection with regard to closing procedures and costs. The Federal Equal Credit Opportunity Act prohibits credit providers from discriminating against members of certain protected classes. The 1968 Federal Fair Housing Act prohibits discrimination in the sale or rental of housing.

Persuading someone to sell by telling her or him that minorities are moving into the neighborhood is illegal and is called A. redlining. B. blockbusting. C. testing. D. steering.

B. The answer is blockbusting. Redlining is denying loans or insurance to people in selected neighborhoods regardless of their qualifications. Testing is done to enforce the law, and steering restricts freedom of choice.

Converting information on a real estate listing to large-print or audio format would be a response to A. federal fair housing laws. B. the Americans with Disabilities Act. C. Regulation Z. D. RESPA.

B. The answer is the Americans with Disability Act (ADA). The 1968 Federal Fair Housing Act includes handicapped as a protected class, but the specific measures are identified in the ADA. Truth-in-Lending requires disclosure of costs in a credit transaction. RESPA is aimed at protecting consumers from abusive lending practices.

Which of the following rental practices would be legal under federal fair housing laws? A. A property manager discloses to the landlord that a prospective tenant is a minority B. A property manager charges a mother and her six-year old son a higher security deposit than another woman with no children C. A rental agent refuses to rent an apartment to a person who is a convicted drug dealer. D. A property manager refuses to rent to a blind man because he has a seeing-eye dog and the property does not allow dogs.

C. Convicted drug dealers are never protected under federal fair housing laws.

All of the following are considered a protected class under the Federal Equal Credit Opportunity EXCEPT A. Marital status. B. Age. C. Sexual orientation. D. Dependency on public assistance.

C. Sexual orientation is a protected class in a number of states; however, it is not protected under federal fair housing or lending laws.

According to the Federal Equal Credit Opportunity Act, a rejected credit applicant must be informed, in writing, of the reason for credit denial within A. 3 days. B. 10 days. C. 30 days. D. 90 days.

C. The Federal Equal Credit Opportunity Act requires that all rejected credit applicants be informed within 30 days of the reasons for credit denial. The act also states that a borrower is entitled to a copy of the appraisal report, paid for by the borrowers.

The Federal Telemarketing Law allows follow-up calls to previous customers or clients to be made within A. 6 months of the previous sale involving the agent. B. 12 months of the previous sale involving the agent. C. 18 months of the previous sale involving the agent. D. 24 months of the previous sale involving the agent.

C. The Federal Telemarketing Law allows real estate professionals to make follow-up calls to previous customers or clients within 18 months of the previous sale involving the agent.

The Americans with Disabilities act (ADA) requires all of the following alterations to be made to public facilities and services EXCEPT A. attaching grab bars to a restroom stall B. providing automatic entry doors C. providing an automatic sprinkler system D. converting real estate listing information to large print or audio format.

C. The fire codes would require the providing of an automatic sprinkler system, not the ADA.

A broker was listing a seller's home for sale when the seller stated that he would be unwilling to sell to an Asian. The broker should A. list the property, because the seller has the right to choose who will buy his house. B. list the property, but be sure to discreetly urge any Asian buyer to live in a different neighborhood. C. list the property, but avoid getting involved in any negotiations between an Asian buyer and the owner. D. not accept the listing.

D. A real estate licensee cannot be involved with sellers or buyers who wish to violate the federal fair housing laws. The Federal Fair Housing Act of 1968 prohibits discrimination on the basis of race or national origin.

Which of the following categories is NOT protected against discrimination under the federal fair housing laws? A. Religion B. Familial status C. Disabled status D. Lawful source of income

D. Religion, familial status, and disabled status are all protected classes under the federal fair housing laws. Lawful source of income is a protected class in some states, but is covered under the Federal Equal Credit Opportunity Act.

The federal fair housing laws prohibit discrimination on the basis of A. sexual orientation. B. political beliefs. C. marital status. D. sex.

D. The answer is sex. In 1974 gender was added to the protected classes. Some states and local governments prohibit discrimination on the basis of sexual orientation, political beliefs, and marital status, but this is not under the federal fair housing law.

The practice of channeling potential buyers of one race into one area and potential buyers of another race into another area is known as A. canvassing. B. blockbusting. C. redlining. D. steering.

D. The answer is steering. Canvassing involves personal solicitation of opinions or sentiments, which is generally legal. Blockbusting is 'panic selling' and redlining is an illegal lender or insurance practice.

Which of the following laws provides comprehensive guidance for making public facilities accessible? A. RESPA B. Truth-in-lending C. Federal fair housing laws D. Americans with Disabilities Act (ADA)

D. The answer is the Americans with Disability Act (ADA). Regulation Z is the Truth-in- Lending Law. Ginnie Mae functions in the secondary market. Federal fair housing law does not deal with accessibility to public facilities.

Which of the following is exempted from the federal fair housing laws? A. Rental of rooms in an owner-occupied five-family dwelling B. Rental of an owner-occupied five-family dwelling C. Rental of a single-family home when a broker is used D. Lodgings of a private club when the lodgings are not operated commercially

D. The exemption applies to up to four units of owner-occupied property; and, when a broker is used, the federal fair housing laws are in effect.

Which of the following is a legitimate landlord action under fair housing familial status? A. Charging a higher security deposit for families with children B. Segregating families within a building C. Segregating families into certain buildings D. Limiting occupancy based on zoning requirements

D. The landlord is allowed to limit the number of people in a unit based on square footage.

A landlord allowed a tenant, confined to a wheelchair, to make several minor physical changes to an apartment. These changes are called A. disability accommodations. B. familial accommodations. C. trade fixture modifications. D. reasonable accommodations or modifications.

D. Under federal law, the tenant is allowed (at the tenant's expense) to make reasonable modifications to the property. A security deposit may be kept, to allow for returning the property to original pre-modification condition ((in case the tenant does not remove the modification and return the property to pre-modification condition).