New Jersey Real Estate Exam #2

78. A competent and disinterested person who is authorized by another person to act in his or her place and sign a contract of sale is called: A. an attorney in fact. B. a substitute grantor. C. a vendor. D. an agent.

A. "Disinterested" means being able to act in an objective manner without any hidden motivation or prospect of gain. For example, a person who made a secret deal to sign a contract contrary to his client's best interests in exchange for an under-the-table payment would not be "Disinterested."

66. The illegal practice of directing minorities to areas populated by the same race or religion is called: A. steering. B. blockbusting. C. redlining. D. panic peddling.

A. "Steering" is driving people towards particular neighborhoods, and is the correct answer to this question. On the other hand, Blockbusting" is the opposite side of the same coin. Synonymous with "panic peddling," it refers to trying to generate panic selling in a neighborhood dominated by one race or ethnic group by representing that another group is about to start moving in.

51. A person agrees to sell a property for $500,000. The buyer gives the seller $150 as valuable consideration for a six-month option. Which of the following statements is true? A. The $150 is valuable consideration if the seller accepted it. B. The buyer must have at least 5% down as valuable consideration. C. The buyer must have at least 20% down. D. The seller cannot accept money for the option.

A. "Valuable consideration" is a necessary component of all contracts. It is the benefit one party receives in exchange for granting benefit to the other. Generally it is money in any amount both parties agree to, though it can take other forms such as personal property, work or refraining from an act.

133. What is the time period for reinstatement of a real estate license if a licensee has allowed it to expire? A. two years from the last expiration date B. one year from the last expiration date C. there is no time limit D. one day less than a full year from the last expiration date

A. A licensee has two years from the last expiration date in which to renew.

144. Which one of the following is NOT exempt from the provisions of the New Jersey real Estate License Act? A. individual who receives compensation for securing potential renters or buyers of real estate B. individual who is employed as a resident property manager C. executor of an estate D. property owner who leases or sells his or her own property

A. A real estate license is required of anyone who receives compensation for finding prospective buyers or tenants.

124. Which one of the following activities DOES NOT require a real estate license? A. managing real estate as resident manager for one owner B. selling real estate C. leasing commercial real estate D. collecting rent for the use of real estate

A. A resident manager is exempt from licensing requirements.

122. In order to act as a real property securities dealer, which of the following conditions must be met? A. must be licensed as a real estate broker B. must be approved by the Securities and Exchange Commission C. must have his or her securities license endorsed by the Securities and Exchange Commission D. there are no special requirements

A. According to New Jersey law, any person who acts as a real property securities dealer must be licensed as a real estate broker.

89. A zoning change has been announced that will result in the loss of value of the property to a property owner. What should a property manager do? A. Advise the owner immediately. B. Terminate the property management agreement. C. Follow the owner's instructions that were previously given. D. Keep his/her mouth shut.

A. Again, the property manager is the owner's "eyes and ears" for protecting the owner's best interests. Anything that can impact the property's value in either a positive or negative way should be communicated immediately.

67. Carl Chauvinist, the owner of an apartment complex, lives in one unit of a triplex and routinely refuses to rent either of the other two units to a female. Can he do this? A. Yes. He may do this if he does not use a broker or discriminate in advertising. B. Yes. He may do this if he doesn't ask the tenant's age. C. No. Carl can never discriminate on sex. D. No. Carl must live in a single-family home to discriminate.

A. Although laws vary by state as to number of units that fall under this type of provision, if a person owns and lives in a unit, he or she is entitled to practice a certain measure of discrimination. The view is that a person's dwelling (which includes units such as duplexes and triplexes) enjoys a degree of "sanctity" and the person may choose whom he or she brings into their "home."

54. The Civil Rights Act of 1866 prohibits discrimination in housing based on which of the following reasons? A. race B. religion C. sex D. marital status

A. Although surprising to many, the original civil rights legislation was passed in 1866--by one vote over the veto of President Andrew Johnson.

96. Which of the following is correct with regard to exclusive right-to-buy contracts in New Jersey? A. The contract must be indicated as such in the buyer agency agreement. B. The contract requires the signature of the principal only. C. An exclusive right-to-buy contract is illegal in New Jersey. D. The contract is the equivalent of a listing agreement.

A. As long as it is clearly identified, buyer in New Jersey may enter into an exclusive right-to-buy agreement.

60. A three-story apartment complex built in 1965 does not meet with the handicapped access provisions for the 1988 Fair Housing Act. The owner must: A. Make the ground floor handicapped accessible. B. Make the 1st and 2nd floors accessible. C. Make the entire building accessible. D. The owner doesn't have to comply since it's less than 4 stories.

A. Because the building was constructed before the 1991 standards went into effect, only the first floor needs to be modified.

105. A broker at Cummings Real Estate Agency accepted a listing for a small office building. One of his salespeople now wishes to purchase the building as an investment property and to do so he must do which of the following? A. Before making an offer, the salesperson must inform the building owner in writing that he is a licensee. B. The salesperson must obtain permission from the NJ Real Estate Commission before making an offer. C. The salesperson must request that a third party purchase the property on his behalf. D. The salesperson must resign as the broker's agent and make an offer after the owner has retained another broker.

A. Before making an offer, the salesperson must inform the owner in writing of the fact he is a licensee. This is the only requirement.

108. Carmen is a real estate licensee who has signed a brokerage agreement with a tenant who is apartment hunting. Carmen does not charge a fee to prospective tenants but she does receive a commission from landlords if the tenant selects their property. Carmen A. Carmen violated the confidentiality duties she owes the tenant. B. Carmen is free to disclose this information to the landlord. C. Because the landlord pays the commission, Carmen owes statutory agency duties only to him. D. Because Carmen is not charging a fee, she has violated agency law in New Jersey.

A. Carmen owes a duty of confidentiality to the tenant who hired her thus this disclosure was a violation of agency law.

56. The federal anti-discriminatory laws apply to which of the following? A. a broker selling a single-family home B. a private club not open to the general public C. office building sales D. the rental of industrial property

A. Civil rights laws apply to owners of residential property, rental units, hotels and virtually any other building offering housing or accommodations to the general public.

93. Janice had listed her property with Chuck but when the agreement expired she changed to a new agency. Now, Chuck has a buyer who is interested in the property. Which of the following statements is correct? A. Chuck cannot disclose any offers received on the property while he was the listing agent. B. Chuck is a dual agent and can represent both. C. Chuck cannot represent the buyer. D. Chuck cannot give the buyer any information about the physical condition of the property.

A. Confidentiality must continue regarding any offers received on this property while Chuck was the listing agent. However, he must disclose anything he knows about the physical condition,. Also, Chuck no longer has an agency relationship with Janice and he is free to represent the new buyer.

106. Within months of buying their home, the Aubles learned that the roof leaked during heavy rains. When the house was listed with the Bankers Agency, the seller told the Bankers broker that the roof leaked, but Bankers claims the Aubles did not ask about the A. The buyer can sue the broker for nondisclosure. B. The buyer cannot sue the broker under the license law C. The buyer can sue the seller under the license law D. The buyer cannot do anything because this fact should have been discovered during home inspection

A. Disclosure IS required by license law, thus the buyer can sue the broker for nondisclosure. The broker is required by law o disclose any fact that would materially affect the buyer's decision to make an offer.

15. The local utility company dug up Frank's garden to install a natural gas line. The company claimed it had a valid easement and proved it through the county records. Frank claimed the easement was not valid because he did not know about it. The easement: A. Was valid even though the owner did not know about it. B. Was an appurtenant easement owned by the utility company. C. Was not valid because it had not been used during the entire time that Frank owned the property. D. Was not valid because Frank was not informed of its existence when he purchased the property.

A. Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks. As such, they Attach" to a deed or lease and remain in effect, until specifically lifted.

33. A homeowner owned a house on a lot. The front ten feet of the lot were taken by eminent domain for a sidewalk. Would the homeowner be entitled to compensation? A. Yes. The land was taken for public use by eminent domain. B. Yes. He must be paid for the use of the sidewalk. C. No. He still had use of the house and lot. D. No. Compensation is not given on land taken for public use.

A. Governments and municipalities can only seize property (other than in criminal cases) for the public good and through eminent domain, which is a process, not an arbitrary action. Part of that process involves determining fair compensation to the owner.

58. The Federal Fair Housing Act states that a prima facie (at first view) case against a broker for discrimination be established after a complaint has been received because the broker has failed to do which of the following? A. The broker has failed to display a HUD Equal Opportunity poster. B. The broker has failed to join an affirmative marketing program. C. The broker has failed to join the HUD anti-discriminatory task force. D. The broker has failed to attend mandatory classes on fair housing.

A. Included among Fair Housing regulations is the requirement that the HUD Equal Opportunity signage be prominently displayed.

79. An option: A. requires the optionor to complete the transaction. B. gives the optionee an easement on the property. C. does not keep the offer open for a specified time. D. makes the seller liable for a commission.

A. It is up to the optionor (seller)to finish the transaction. The optionee (buyer) does not have to complete (close) on the property, but would lose whatever option monies that have been deposited.

85. A(n) _______ is when an owner takes his property off the market for a definite period of time in exchange for some consideration, but he grants the right to purchase the property within that period for a stated price. A. option B. contract of sale C. right of first refusal D. installment agreement

A. It's important to note that options generally give flexibility to only one side of the transaction. For example, let's say Barney is expecting a big promotion in six months and wants to buy Fred's house for $300,000 if it comes through. In exchange for keeping his home off the market for six months and agreeing to sell it to Barney for $300,000 at Barney's option, Barney gives Fred $3,000. The $3,000 is Fred's to keep no matter what. However, Barney is not obligated to buy Fred's house; it's his choice. Further, if he does get the promotion and wants to exercise his option, Fred must sell Barney his home for $300,000, even if market conditions have now made it worth more.

37. What do liens and easements have in common? A. Both are encumbrances. B. Both must be on public record to be valid. C. Neither can be done without the consent of the owner. D. Both are money claims against the property.

A. Liens are, of course, serious in that they indicate the owner has failed to pay a debt secured directly or indirectly by the property. Easements, on the other hand, are generally a practical necessity for most residential properties.

140. Which of the following must a nonresident license applicant in New Jersey file with the commission? A. irrevocable consent to suit B. authenticated copy of birth certificate C. corpus delicti D. certificate of specific performance

A. One who applies for a nonresident license must file an irrevocable consent to suit.

94. DeeDee is a real estate agent who sold a home to the Stephens. They asked her to help them get their mortgage and she knew of a lender who paid a referral fee to salespeople who referred new clients. What is the appropriate thing for DeeDee to do in this situation? A. DeeDee should not refer the Stephens to this lender. B. If DeeDee discloses the referral fee to the Stephens, it would be acceptable to refer them. C. If DeeDee allows half of the fee to be credited to the Stephens' mortgage, this would be acceptable. D. If the lender offers the best interest rate and terms, it is perfectly acceptable to refer the Stephens for their mortgage.

A. Salespeople can only receive income from the brokers who employ them. It would be unwise to refer clients to this lender.

50. The list of previous owners of conveyance from whom the present real estate owner derives his or her title is known as the: A. chain of title. B. certificate of title. C. title insurance policy. D. abstract of title.

A. The "Chain" links together the successive owners of a property from the most recent to the original recorded title holder. In addition, it notes other relevant information such as mortgages, judgments, liens, death of title holders, inheritors and so forth.

117. Who administers real estate license law in New Jersey? A. New Jersey Real Estate Commission B. New Jersey Association of Realtors C. New Jersey Department of Housing and Urban Development D. New Jersey Department of Banking and Insurance

A. The New Jersey Real Estate Commission administers the real estate license law. HUD is a government agency that supervises housing issues; the NJ Association of Realtors is a trade organization; and the real estate commission is part of the NJ Department of Banking and Insurance.

110. A McCann broker has entered into a listing agreement with a seller. A Taylor broker who has been working with the buyer learns of the property through the MLS. Who would the Taylor broker represent? A. the buyer as an agent B. the seller as a subagent C. the buyer as a subagent D. the seller as an agent

A. The Taylor broker, the second cooperating broker in this case, would represent the buyer as a buyer's agent.

40. A special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed: A. Applies only to a definite limited time. B. Covers the time back to the original title. C. Is implied and is not written in full. D. Protects all subsequent owners of the property.

A. The more common deed in most states is the general warranty, because it establishes the ownership trail and validity of title going back to the original recorded ownership (for example, the purchase of Manhattan Island and all subsequent divisions, subdivisions and resales). Under a special warranty deed, an owner transfers property guaranteeing the quality of title only during the period of his or her ownership, leaving subsequent buyers vulnerable to prior claims.

52. Which of the following activities is a violation of the Federal Fair Housing Act? A. a nonprofit church that denies access to its retirement home to any person because of race B. a nonprofit private club that gives preference in renting units to its members at lower rates C. the owner of a single-family residence selling his/her own home who gives preference to a buyer based on his/her sex D. discrimination in the sale of a warehouse based on the prospective purchaser's gender

A. The private club is exempt because its preferential treatment is based on its membership; the homeowner is exempt, so long as he is selling his home without a broker; the warehouse is exempt because it's not a housing unit.

120. The real estate commission may investigate a licensee for a number of reasons. Which of the following is NOT grounds to undertake an investigation? A. a random selection of licensees B. a motion from members of the commission C. the initiative of the commission D. a written complaint from a dissatisfied citizen

A. There must be a stated valid reason for an investigation by the commission: this can be from an unhappy customer, a fellow member of the commission, or simply launched on the commission's initiative.

30. The system of ownership of real property in the United States is what? A. incorporeal B. allodial C. inchoate D. feudal

B. "Allodial" is the modern form of ownership and is often contrasted with "feudal" in which land is held on the condition of rent or service due the government. For example, a medieval knight held property subject to coming to his baron's service when called. Similarly, the baron's land holdings were conditional on his raising an army and fighting for the king in times of conflict. Failure of any party to "perform as promised" was cause for holdings to be confiscated, often as a preliminary step to more extreme actions.

83. Broker K arrives to present a purchase offer to Mrs. D, an 80 year old invalid who is not always of sound mind, and finds her son and her daughter-in-law present. In the presence of Broker K, both individuals persistently urge D to accept the offer, even A. Broker K should not have brought her such a low offer for her property. B. She was under undue duress from her son and daughter-in-law, and, therefore, the contract is voidable. C. Broker K defrauded her by allowing her son and daughter-in-law to see the purchase offer he brought to her. D. Her consumer protection rights have been usurped by her son and daughter-in-law.

B. "Duress" is the application of coercion or pressure to influence a person to act in a way contrary to his/her best interests. Further, since voluntary participation is a key condition of any contract, Mrs. D could well be successful in such an action. A voidable contract is one that is able to be voided because Mrs. D was under duress or undue influence.

41. Which of the following deeds contains no expressed or implied warranties? A. a bargain and sale deed B. a quitclaim deed C. a warranty deed D. a grant deed

B. A "quit claim" deed means what it implies: The seller gives up any claims he or she may have to the property but makes no warranties whatsoever about the possibility of other claims.

114. When must a broker's agency relationship with a buyer or seller be determined and all agreements executed? A. no later than the closing B. no later than the time a purchase and sale agreement is prepared C. at the time of the first business contract D. at any time after a purchase and sales agreement is executed

B. A broker's relationship with a buyer or seller as agent, non-agent, or disclosed dual agent must be determined and all necessary agreements executed no later than the time a purchase and sale agreement is prepared.

74. The essential elements of a contract include all of the following EXCEPT: A. offer and acceptance. B. notarized signatures. C. competent parties. D. consideration.

B. A contract sets forth the terms and conditions of a real estate transaction, but does not itself transfer ownership. Thus it does not need to be notarized.

39. The primary purpose of a deed is to: A. Prove ownership. B. Transfer title rights. C. Give constructive notice. D. Prevent adverse possession.

B. A deed is the instrument by which ownership of a property is transferred from one person to another, while a title is evidence of that ownership.

9. A person who has complete control over a parcel of real estate is said to own a: A. leasehold estate. B. fee simple estate. C. life estate. D. defeasible fee estate.

B. All the other options have conditions attached. A leasehold estate is, as the name implies, leased property. Similarly, a life estate gives a person ownership or control of a property only for the duration of his or her natural life. Defeasible estates" give a person or entity control over a property only so long as certain conditions are met or avoided. For example, a community might be deeded a property on the condition that it be used only for building a school, or land willed to a child on the condition it never be used for commercial development. If the community tries to use the property for a recreation complex or the heir tries to sell to a retail developer, control would automatically revert to another party and the deed would become void.

145. If Stephanie wishes to sell her own house does she need a real estate license? A. she may obtain a temporary license to do this B. she does not need a license C. if she is an attorney she will not need a license D. she must have a license issued by the real estate commission

B. An owner selling her own property is exempt from real estate licensing requirements

57. A tenant complained to HUD about his landlord's discriminatory practices in his/her building. A week later the landlord gave the tenant an eviction notice. Under which of the following situations would the Federal Fair Housing Act be violated? A. when the tenant is two months behind in his/her rent B. when the landlord evicts the tenant for reporting him to HUD C. when the tenant has damaged the premises D. when the tenant is conducting an illegal use on the premises

B. Anti-discrimination laws do not apply to situations that are in violation of generally accepted policies such as paying rent on time, maintaining the premises and abiding by use agreements.

149. A person must be licensed as a real estate broker or salesperson for which of the following activities? A. constructing houses B. engaging in real estate business C. selling his or her house D. buying a house for his or her personal use

B. Anyone engaging in the real estate business in New Jersey must first obtain a real estate license.

49. When the preliminary title report reveals the existence of an easement on the property, it indicates that the easement is a(n): A. lien. B. encumbrance. C. encroachment. D. tenement.

B. Anything that limits a person's use of a property is an encumbrance. Easements limit use in that they generally prohibit any kind of permanent structure on the area in question. For example, if a homeowner wanted to build a swimming pool in an area of his back yard and the local sewer company had an easement for pipes running under that area, he would have to find another location for his pool, even if it was not as desirable.

19. Ginny owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective purchaser? A. an easement in gross B. an appurtenant easement C. an easement by necessity D. a license

B. Appurtenant easements afford the most protection since they are generally a permanent feature of the property. Thus, in the case of sale, the lake access passes to any new owners. By contrast, an "easement in gross" is between two individuals, which would severely limit the attractiveness and value of the property if the original owner wished to sell.

84. The law that requires real estate contracts to be in writing to be enforceable is the: A. law of descent and distribution. B. statute of frauds. C. parole evidence rule. D. statute of limitations.

B. Contrary to popular belief, the statute of frauds is not about specific actions defined as fraud, but the requirement in every state that certain documents be in writing, especially those pertaining to real estate. It's called the statute of frauds because it was first enacted in England in 1677 to prevent fraudulent claims of title.

76. The amount of earnest money deposit is determined by: A. the real estate licensing statutes. B. an agreement between the parties. C. the broker's office policy on such matters. D. the acceptable minimum of 5 percent of the purchase price.

B. Earnest money is a demonstration of sincerity on the part of the purchaser and provides preliminary evidence that he or she is financially capable of completing the transaction. While it should be substantial enough to meet these two criteria, there is no set or customary amount or percentage.

11. The purchase of a ticket for a professional sporting event gives the bearer what? A. an easement right to park his car B. a license to enter and claim a seat for the duration of the game C. an easement in gross interest in the professional sporting team D. a license to sell food and beverages at the sporting event

B. Easements grant access, not use. Commercial licenses, such as those required to sell beverages, souvenirs or services, cover extended periods. Although tickets to sporting events, concerts, shows and the like are technically licenses, they differ from most in their degree of restriction. For example, a concert ticket does not give the bearer the right to sit anywhere he or she chooses or wander backstage to meet the performers.

18. Quintin owned two acres of land. He sold one acre to Frank and reserved for himself an appurtenant easement over Frank's land for ingress and egress. Frank's land: A. Is the dominant tenement. B. Is the servient tenement. C. Can be cleared of the easement when Quintin sells the withheld acre to a third party. D. Is subject to an easement in gross.

B. Frank's land interest is the one burdened by the easement; therefore it is the servient property.

38. The title to real estate passes when a valid deed is: A. signed and recorded. B. delivered and accepted. C. filed and microfilmed. D. executed and mailed.

B. Fundamentally, real estate transactions only involve two parties--the buyer and the seller. All that's necessary to create a legal sale is for one party to make an offer the other accepts. Recording, escrow, real estate licensees, mortgage companies and the like facilitate and support the transaction process but are not requirements of a legal sale.

104. Kristin is the agent for a family estate that includes one condominium property with a history of violent crime. In addition, the resident of the unit died from AIDS. New Jersey law requires which disclosure responsibilities of Kristin, as the agent for the property? A. She must disclose both the crime and the AIDS death. B. She is not required by law to disclose either the crime or the AIDS death. C. She is prohibited by aw from disclosing either event. D. She does not have to disclose the crime, but she must disclose the AIDS-related death.

B. In New Jersey, an agent is not required to disclose either. Discussion of the AIDS-related death is prohibited by federal fair housing laws, and New Jersey state law does not cover stigmatized properties.

138. Jen is a broker's unlicensed assistant who worked long extra hours to help her broker close a difficult sale. Among other tasks, she made phone calls to the client, encouraging him to accept the seller's counteroffer. The broker wishes to pay Jen a percent A. the broker may not pay a cash commission to the assistant but may give a gift of personal property B. the broker and the assistant are in violation of rules and no commission may be paid C. the broker may compensate the assistant under these circumstances D. the broker may pay a commission to the assistant only if the assistant is an independent contractor

B. In New Jersey, unlicensed assistants may not perform the services described and both the broker and the assistant have acted in violation of the rules.

73. A void contract is one that is: A. not in writing. B. not legally enforceable. C. rescindable by agreement. D. voidable by only one of the parties.

B. In order to be enforceable, real estate contracts must meet the legal requirements for contracts in general. For example, a contract signed by a minor or a "seller" who doesn't own the property in question was never legal to begin with and is thus "void."

130. A real estate license is required for which of the following individuals to transact business? A. resident manager of apartment building whose job includes leasing units to tenants B. person who negotiates the sales of businesses, including their stock equipment and buildings, for an established fee C. person who has his parents' written authority to negotiate the sale of the family home D. person who owns, manages, and rents the units in a four family flat

B. In order to sell the buildings, a real estate license is required. A license would not be needed for the personal property, i.e. the stock equipment.

90. A broker and seller terminate the listing contract. An offer is received in the mail by the broker after the termination of the listing contract. The offer is for full price and includes all of the terms and conditions of the seller. Why is this NOT a valid contract? A. There is no consideration involved. B. No acceptance has been given. C. No earnest money has been enclosed. D. There is no current listing agreement.

B. It has not been presented to or accepted by the owner. Remember, contracts aren't valid until both parties agree. However, even though the listing agreement has expired, the offer should be presented. If it's accepted and the transaction closes, the broker will generally be entitled to his or her full commission.

136. An unlicensed real estate assistant may perform a number of duties in New Jersey. Which of the following is NOT permitted for an assistant? A. prepare and distribute promotional materials B. explain simple contracts to prospective buyers C. assemble legal documents necessary for closing D. calculate commissions

B. It is not permissible for a real estate assistant to explain even simple contract documents to prospective buyers. All other activities listed may be performed under the direction of a licensee.

129. John has started taking real estate prelicensing classes and agrees to help his neighbor sell her house for 3% commission. The house is sold and closing takes place one day before John receives his salesperson's license. To his surprise, the neighbor refuses to pay him a commission. Can John sue his neighbor for the commission? A. Yes, New Jersey law permits enforcement of an oral agreement in these circumstances B. No, New Jersey law prohibits lawsuits to collect commissions unless the injured party is a licensed broker whose license was in effect at the time the agreement was made C. Yes, because John was formally enrolled in real estate education, the agreement is seen as professional and binding D. No, a real estate salesperson in New Jersey must have a permanent office where his license is in full force and displayed

B. John cannot sue because his license was not active when the agreement was made.

20. Sam and Nancy bought a store building and took title as joint tenants. Nancy died testate. Sam now owns the store: A. as a joint tenant with rights of survivorship. B. in severalty. C. as a tenant in common with Nancy's heirs. D. in trust.

B. Joint tenancy means that two parties have an undivided interest in a particular property and, upon the death of one party, full ownership automatically goes to the survivor. Despite the way it sounds, "in severalty" means as sole owner.

134. When are licenses renewed in New Jersey? A. annually, in the month issued B. every other year, on June 30 C. annually, on June 30 D. every two years on June 30

B. Licenses expire biennially, every other year, on June 30.

132. When does a real estate license expire in New Jersey? A. January 1 every year B. June 30 every other year C. March 31 every year D. January 31 of every other year

B. Licenses expire on June 30 of every other year.

127. Which of the following is NOT a requirement for obtaining a broker's license in New Jersey? A. being of good moral character B. two years experience as an active licensed salesperson C. being 18 years old D. completion of 150 hours of approved real estate courses

B. Licensing law requires a minimum of three years as a salesperson to become a broker.

64. The buyer of an apartment complex is told that the refrigerator in one of the apartments goes with the sale. After taking title, he discovered that the refrigerator belonged to the tenant. Which is true about this situation? A. Since the refrigerator was in the apartment, it automatically belongs to the new owner. B. The refrigerator is the personal property of the tenant. The seller had no right to offer it to the buyer. C. The refrigerator was plugged into the wall and that makes it real property. D. The tenant will have to get permission from the new owner to remove the refrigerator.

B. Plugging in an appliance does not constitute installation. Thus it is personal property that belongs to the tenant.

35. The recording of a deed: A. Is all that is required to transfer the title to real estate. B. Gives constructive notice of the ownership of real property. C. Insures the interest in a parcel of real estate. D. Warrants the title to real property.

B. Recording a deed does not convey, insure or warrant ownership. However, it does protect the owner's interest in a property by serving notice that the recorded owner is the only recognized holder of title. This places a larger burden of proof and process on someone trying to assert a prior ownership interest and/or claiming a deedholder's title is clouded.

143. Brentwood Apartments has a resident property manager who is responsible for negotiating leases for the apartment complex. Which of the following is true concerning the resident manager? A. he must have a salesperson's license B. he is exempt from the licensing requirements C. he is violating the license law D. he must have a broker's supervision

B. Resident managers in New Jersey are exempt from real estate licensing requirements.

21. When real estate under an estate for years is sold, what happens to the lease? A. It expires with the conveyance. B. It binds the new owner. C. It is subject to termination with proper notice. D. It is valid but unenforceable.

B. Tenancy for years is the common form of rental agreements and binds all future owners for the term of the lease.

116. Which of the following is required by the Consumer Protection Law? A. seller disclose any and all facts that might affect a sale B. broker disclose any and all facts that might affect a sale even if the buyer does not ask C. broker disclose any and all facts that the seller has disclosed D. broker keep confidential all information from the seller

B. The Consumer Protection Law requires that a broker disclose any material information that may affect a sale, regardless of whether the buyer asks for it.

118. How are the members of the New Jersey Real Estate Commission selected? A. by real estate licensees B. by the Governor or New Jersey C. by public election D. by members of the state association for realtors

B. The Governor makes the appointments to the Real Estate Commission which are then ratified by the Senate.

101. Leo is interested in seeing a house that is listed with Andrews Realty. He does not want to enter into an agency relationship. A salesperson from Trulaske Realty can show Leo the house if which of the following is met? A. If Andrews Realty obtains Trulaske's consent to subagency, and Leo is given an agency disclosure notice stating that Andrews represents the seller. B. If Andrews obtains the seller's written consent to subagency, and Leo is given an agency disclosure notice stating that Trulaske represents the seller. C. If Leo verbally agrees to buyer agency, either realty firm may show the listing. D. This cannot occur within the guidelines of New Jersey law.

B. The Trulaske agent can show the listing IF the seller gives permission for subagency.

98. The New Jersey Real Estate Commission rules on listing agreements include all of the following provisions except which one of the following? A. A listing agreement must be in writing and signed by bother broker and seller. B. A report of the property's condition by a qualified expert must accompany the listing agreement prior to signature. C. The seller must receive a copy of the listing agreement after it is signed. D. A listing agreement must include the broker's fee

B. The listing agreement does have to state the brokerage fee, be in writing, and be signed by broker and seller. The seller must receive a true copy of the agreement after signing it. But, the listing agreement does not have to include a qualified expert's report of the property's condition.

29. Which of the following liens does not need to be recorded to be valid? A. materialman's lien B. real estate tax lien C. judgment lien D. mechanic's lien

B. The requirement for individuals to record liens is due in part to the necessity of correctly identifying the complainant. For example, not just "Jones Contracting," but the specific Jones Contracting that performed the work and is owed the money. Because they bear the authority of government and are easily identified, liens by taxing authorities do not need to be recorded.

147. With regard to the annual CE requirement in New Jersey, which of the following is a correct statement? A. The CE requirement can be met by retaking and passing the licensing exam. B. There is not a CE requirement in New Jersey. C. The requirement can be met by taking a 6-hour course on property management. D. The requirement can be met by taking 12-hour course on property management.

B. There are no continuing education requirements for real estate salespersons in New Jersey

2. The right to control one's property includes all of the following EXCEPT: A. the right to invite people on the property for a political fund-raiser. B. the right to exclude the utilities meter reader. C. the right to erect "no trespassing" signs. D. the right to enjoy pride of ownership.

B. This right to enter and work on a property is granted to utility companies (water, sewer, gas and electric) as well as telephone and cable companies. Essentially, if a company provides a service and owns the equipment (e.g., phone and cable lines), they are usually granted an easement.

36. Which of the following provides a buyer with the best assurance of clear, marketable title? A. certificate of title B. title insurance C. abstract of title D. general warranty deed

B. Title insurance provides the best assurance of marketable title.

14. The rights of the owner of property located along the banks of a river are called: A. littoral rights. B. prior appropriation rights. C. riparian rights. D. hereditament.

C. "Littoral" and "prior appropriation" are different kinds of water rights: in the first case, navigation rights to an ocean or other large body of water; in the second, the right to use a water source for irrigation. A hereditament is any inheritable property.

82. A buyer makes an earnest money deposit of $1,500 on a $15,000 property and then withdraws her offer before the seller can accept it. The broker is responsible for disposing of the earnest money by: A. turning it over to the seller. B. deducting the commission and giving the balance to the seller. C. returning it to the buyer. D. depositing it in his or her trust account.

C. A contract only exists when it is both offered by the buyer and accepted by the seller. Since the second part of this requirement was never fulfilled, the buyer is entitled to have his earnest money returned.

46. Which of the following would be used to clear a defect from the title records? A. a lis pendens B. an estoppel certificate C. a suit to quiet title D. a writ of attachment

C. A owner might bring a "quiet title" action to correct a minor mistake in the property description or to remove an easement that's been unused for years. Additionally, they are used when a third party tries to asset some right to the property through a dubious claim. The suit "quiets the mouth" of that person and establishes a clear title.

123. Which of the following criteria must be met in order for a partnership, association, or corporation to be granted a license? A. all papers must be filed with the secretary of state B. the brokerage business has paid a fee to the guaranty fund C. one of its officers must hold a broker's license D. all active participants in the brokerage must have brokerage licenses

C. A partnership, association, or corporation in New Jersey may be granted a license only if one of its officers holds a broker's license.

148. Which of the following statements is true regarding all real estate licenses in New Jersey? A. they are granted in perpetuity B. they expire every year on April 30 C. they expire every two years on June 30 D. they do not require renewal unless previously revoked

C. All real estate licenses in New Jersey expire biennially on June 30.

27. What is a Schedule of Exceptions on a title policy? A. encumbrances B. tax liens C. list of things not insured in the policy D. defects

C. Almost no title insurance policy protects against all conceivable events. As the name suggests, the Schedule of Exceptions is a specific list of items not covered and can include things such as unrecorded mechanic's liens, assessments, water rights and mining claims.

17. Your neighbors use your driveway to reach their garage on their property. Your attorney explains that the ownership of the neighbors' real estate includes an easement appurtenant giving them the driveway right. Your property is the: A. leasehold interest. B. dominant tenement. C. servient tenement. D. license property.

C. An "easement appurtenant" allows the holder of one property to benefit from another's. In this case, your property is "servient" because it is the one burdened by the easement while your neighbor's is Dominant" since it is the one that benefits.

48. A written summary of the history of all conveyances and legal proceedings affecting a specific parcel of real estate is called a(n): A. affidavit of title. B. certificate of title. C. abstract of title. D. title insurance policy.

C. An Abstract of title" is a written summary that traces every change of ownership and claim against a property (such as mortgages, liens, and easements). In So me cases, the abstract goes back to the last change of title, in others to the first recorded owner. It is part of the title report required by virtually all lenders.

146. In New Jersey, which of the following prerequisites is necessary in order to obtain a real estate salesperson's license? A. U.S. citizenship B. a 2-year associates degree or certificate in real estate from an accredited school C. successful completion of 75 hours in general principles of real estate D. successful completion of 12 credit hours of real estate law, investments, finance, and appraisal

C. An applicant for a real estate license must successfully complete 75 classroom, correspondence, or distance learning hours in general principles of real estate.

128. Rich completed his real estate education requirement successfully on September 1, 2003. What is the latest date he may apply for a salesperson's license exam? A. 31-May-04 B. 1-Sep-04 C. 31-Aug-04 D. 31-Dec-04

C. An applicant has until the last day of one year from the date that education requirements were completed, which in this case is August 31, 2004.

34. The covenant in a deed which states that the grantor is the owner and has the right to convey the title is called: A. covenant of further assurance. B. covenant of warranty forever. C. covenant of seisin. D. covenant against encumbrances.

C. Another outgrowth of the feudal system, "seisen" derives from the French meaning to "sit upon or own" and gives owners the right to sell or transfer property at will.

87. To assign a contract for the sale of real estate means to: A. Record the contract with the county recorder's office. B. Permit another broker to act as agent for the principal. C. Transfer one's rights under the contract. D. Allow the seller and the buyer to exchange positions.

C. Assigning a contract means to transfer it to another.

125. Who among the following are exempt from real estate licensing requirements even when engaged in real estate activities? A. appraisers B. associations, partnerships, and corporations C. attorneys D. real properties securities dealers

C. Attorneys at law are exempt from real estate licensing requirements.

81. H agrees to purchase V's real estate for $230,000 and deposits $6,900 earnest money with Broker L. However, V is unable to clear the title to the property, and H demands the return of his earnest money as provided in the purchase contract. Broker L should A. Deduct his commission and return the balance to H. B. Deduct his commission and give the balance to V. C. Return the entire amount to H. D. Give the entire amount to V to dispose of as he decides.

C. Brokers and salespeople only earn their commission when a transaction closes. Since the transaction was never completed, no commission is owed. Additionally, H is entitled to have all his earnest money returned since it was the seller, not he, who defaulted on the contract.

150. In New Jersey, which one of the following would NOT constitute grounds for revocation of a broker's license? A. felony conviction B. depositing escrow money into a personal account C. agreeing with a seller to accept a listing for higher than normal commission D. advertising falsely that one is a member of the New Jersey Association of Realtors

C. Commission rates are negotiable between the seller and the broker, thus this would NOT be grounds for revoking a broker's license. All others are reasons to revoke a license.

109. A real estate broker is representing a seller and knows that the property has a crack in the foundation and that the previous owner committed suicide in the house. Which of the following must the broker disclose? A. both facts B. the suicide C. the cracked foundation only D. neither fact must be disclosed

C. Disclosing the suicide could constitute a breach of duty to the client, but the broker must disclose the cracked foundation.

12. If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, what happens? A. The easement becomes dormant. B. The easement is unaffected. C. The easement is terminated. D. The properties retain their former status.

C. Dominant" and "servient" tenements involve two adjacent properties in which an easement is involved. For example, let's say Bridle Creek Farms and Barnstable Farms are separate parcels divided by a country lane that provides access to the county road system. The lane is owned by Bridle Creek, but the deeds of both properties stipulate that Barnstable Farms shall have unrestricted access for the purpose of accessing county roads. That access is an easement. Thus, if the owner of Barnstable Farms buys Bridle Creek Farms, the need for the easement disappears.

59. A broker is discussing a new listing with a prospective Mexican American buyer. The buyer wants to inspect the property immediately, but the owner of said property has instructed the broker, in writing, not to show the house during the owner's three-week A. Show the property to avoid a violation of the Federal Fair Housing Act. B. Request the Real Estate Commission arbitrate the problem. C. Inform the buyer of the seller's instructions. D. Notify the nearest HUD office.

C. Following an owner's lawful instructions is not only allowable, but a responsibility of the licensee. However, if the owner instructed the broker to tell minority buyers that he was out of town when he was not in order to avoid selling to a minority, the broker would be in violation of the law if he acted as the owner requested.

72. A salesperson is involved in a transaction where an individual wishes a six-month lease with an option to buy. What is true about this situation? A. The individual must go to an attorney since it is too complicated a transaction for a salesperson. B. This transaction is too complicated for a salesperson. Only a person with a broker's license should handle this transaction. C. A salesperson could use two standard forms, fill in the blanks and request that his or her broker review the forms before signing. D. The salesperson should write the purchase offer. A lease for 6 months does not need to be in writing.

C. Generally speaking, salespeople may complete standard forms so long as they are reviewed by and with the approval of their broker.

55. An agent working as a subagent of the seller would suggest that the buyer hire an inspector from an outside service in all of the following cases EXCEPT: A. when they smell gas in the basement. B. when there is a slow drain in the toilet. C. when a hinge is off the door. D. when there is sawdust in the kitchen cabinets.

C. Home inspectors are hired to find significant and often hidden property defects, such as signs of a leaking roof, termites, foundation cracking and so forth. Hinges and other "wear and tear" items are obvious and not among the reasons for hiring an inspector.

68. An aggrieved party with a Fair Housing violation claim has how long to file a complaint with the Department of Housing and Urban Development? A. 1 month B. 1 week C. 1 year D. 7 years

C. If the complaint is not filed within one year, a person may still file a civil suit in a Federal Court.

131. Which of the following is true for an applicant for a real estate license in New Jersey? A. must have completed at least one year of college B. must show proof of passing the license exam in preceding six months C. must not have been convicted of a felony within previous five years D. must be at least 21 years old

C. In New Jersey, an applicant must not have been convicted of a felony within five years before applying for a license and must be 18 years of age. College is not required and license exam scores are valid for one year.

102. Which of the following statements is true when a New Jersey broker asks the seller to complete a property condition disclosure? A. In NJ, standard disclosures cover a range of structural conditions only. B. The agent should not give any advice to the seller regarding which conditions to disclose. C. The disclosures are optional and the seller may refuse to make any. D. New Jersey statute includes property condition disclosure and the seller must comply.

C. In New Jersey, disclosures are optional and are not required by statute. It is advisable, however, and may protect buyer and seller from liability.

121. Which of the following requires a real estate license in New Jersey? A. licensed attorney acting under power of attorney to convey real estate B. partnership selling in a building owned by the partners C. person who employs fewer than 3 apartment leasing agents D. resident manager working for an owner if the manager's primary residence is the apartment building being managed

C. In New Jersey, one who employs apartment leasing agents is required to have a real estate license.

113. Is it acceptable in New Jersey for a broker to make a blanket offer of subagency at the time a property is listed in the MLS? A. Yes because a subagency relationship may be created by such an offer in an MLS or through a specific agreement between parties B. No, because subagency is illegal in New Jersey C. No, because subagency relationships in New Jersey may be created only by specific agreement between the parties D. Yes, because New jersey law permits the creation of subagency relationships through multiple listing services

C. In New Jersey, subagency relationships may only be created by specific agreements between parties so a blanket offer with a MLS listing is unacceptable.

62. Under an Exclusive Right to Sell Listing agreement, if the seller produces a ready, willing and able buyer he: A. will not have to pay a commission since he produced the buyer. B. will only have to pay the broker half the commission since he produced the buyer. C. owes the listing broker a full commission. D. will not be able to turn the buyer over to the listing agent since the agent has the exclusive right to sell the property.

C. In contrast to exclusive agency, the exclusive right to sell entitles the broker to his or her commission regardless of who actually sells the property.

95. Dan is house shopping and contacts a real estate office. He tells the agent, John, that he is interested in the area but is not ready to sign any agreements just yet. John can be helpful and accommodating with many actions except which one of the following. A. John can provide information on mortgage interest rates and terms. B. John can explain to Dan about buyer agency seller agency, and dual agency. C. John can prequalify Dan for a mortgage. D. John can provide information on properties for sale in the area.

C. John cannot obtain confidential information about Dan without first entering into a buyer agency relationship. Thus, John may NOT prequalify Dan for a mortgage.

112. A seller and a buyer have signed dual agency consent agreements with the Carson Realty Company. A salesperson at Carson who has been working with the buyer may do which of the following?. A. disclose to the seller the buyer's financial qualifications B. disclose to the buyer the seller will accept less than the listing price C. provide comparable market data to the seller after providing it to the buyer on request D. disclose to the seller that the buyer will pay than the asking price

C. Legally, the salesperson may provide comparable market information to the seller after the buyer requests and receives such data.

65. The illegal process of a banker refusing to approve loans for a neighborhood based on the racial composition of the area is: A. blockbusting. B. steering. C. redlining. D. panic peddling.

C. Loans may only be approved or denied on the basis of whether a specific individual and property meet established standards. Thus lenders are well within their rights to deny a loan to a particular person because he or she lacks sufficient income or has poor credit. Additionally, a loan for a partially completed home or one that doesn't meet code can also be denied. However, "macro" issues such as race or neighborhood cannot be considered.

42. When the grantor does not wish to convey certain property rights, he or she: A. must note the exceptions in a separate document. B. may not do so, since the deed conveys the entire premises. C. may note the exceptions in the deed of conveyance. D. must convey the entire premises and have the grantee reconvey the rights to be retained by the grantor.

C. Most commonly known as "restrictive covenants," such deed restrictions are often used to maintain the consistency of a neighborhood by, for example, stipulating that only traditional home styles of a particular size and painted in traditional colors may be constructed and occupied within the subdivision. These are encumbrances on the property since they limit current and future owners in how they use the property.

32. Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt? A. real estate tax lien B. mechanic's lien C. judgment lien D. assessment lien

C. Most liens are against a specific property, such as a primary residence. Thus, a contractor seeking payment for a new deck cannot have a homeowner's car attached in settlement. A judgment lien, however, is a decision directed by the courts and can apply to whatever assets it deems appropriate.

99. In New Jersey, what three types of agency are recognized? A. seller's, buyer's, and full fiduciary B. seller's, buyer's, and undisclosed dual C. seller's, buyer's, and disclosed dual D. seller's, subagency, and disclosed dual

C. New Jersey recognizes seller's agency, buyer's agency and dual agency agreements that have been disclosed and agreed to in writing by the parties.

139. Which of the following must be done if a person obtains a reciprocal real estate license in New Jersey? A. must be licensed under a resident New Jersey broker or establish a principal place of residence in New Jersey B. must maintain at least a branch office in New Jersey C. must file an irrevocable consent agreement with the New Jersey Real Estate Commission D. must take all education course requirements in New Jersey

C. One must file an irrevocable consent agreement with the New Jersey Real Estate Commission in order to obtain a reciprocal real estate license.

43. A partition suit is used for which of the following? A. determination of party fences B. to allow construction of party walls C. to force a division of property without all the owners' consents D. to change a tenancy by entireties to some other form of ownership

C. Partition suits are typically pursued when a co-owner of a property wants to sell his or her share and the other owners are opposed. Since it is a legal action involving the courts, it is an expense with often unsatisfactory results.

47. A bill of sale is used to transfer the ownership of what? A. real property B. fixtures C. personal property D. appurtenances

C. Personal property differs from "real property" in a number of respects, most importantly its portability. Cars, furniture, clothing, paintings, jewelry, appliances and just about any other non-food item one buys are examples of personal property.

77. If the buyer defaulted some time ago on a written contract to purchase a seller's real estate, the seller can still sue for damages, if he is not prohibited from doing so by the: A. statute of frauds. B. law of agency. C. statute of limitations. D. broker-attorney accord.

C. Statutes of limitations exist to keep the legal system from getting bogged down in old disputes and allow for evidence and recollections to remain reasonably fresh. Civil limitations typically range from one to six years, though in some cases up to twenty-five years.

63. Which of the following would not terminate an agency relationship? A. abandonment by the agent B. revocation by the principal C. submission by the agent of two offers at the same time D. fulfillment of the agency purpose

C. Submitting offers doesn't end the relationship--only the owner's acceptance of one and ultimately closing on the transaction.

71. A mobility impaired person was renting a unit in an apartment complex. Half the units had been assigned parking spaces near the door; the other half had not. The owner: A. may charge extra money to the handicapped person for providing the parking space near the door. B. must take a vote of all tenants to see if they want to allow the handicapped person a parking space. C. must give a parking space near the door to the handicapped person, if one is available and a need is demonstrated. D. must allow the handicapped person to live there for a month and if a space becomes available during that time, give the parking space to the handicapped person.

C. The "equal access" aspects of fair housing legislation do not necessarily mean equal treatment. "Reasonable accommodation" must also be made to meet the needs of handicapped people, including exceptions to standard policies such as convenient parking and guide dogs.

107. When must an agency disclosure statement be given to prospective purchasers/tenants by a real estate licensee? A. before any offer to purchase is prepared or presented B. at the closing table C. at the first face-to-face meeting of the licensee and prospective purchasers/tenants D. when the purchasers are ready to make an offer in writing

C. The agency disclosure statement must be given by the real estate licensee to prospective buyers at the first face-to-face meeting before they are shown any property.

141. Members of the New Jersey Real Estate Commission are selected by which of the following means? A. appointed by the commissioner of banking and insurance B. elected by statewide election C. appointed by the governor D. elected by licensees

C. The governor selects the members of the Real Estate Commission.

10. A portion of Wendell's building was inadvertently built on Ginny's land. This is called an: A. accretion. B. avulsion. C. encroachment. D. easement.

C. The principal attributes of an encroachment are: 1) It is accidental and 2) it involves only part of a structure. Typically, the issue would be resolved by selling Wendell an easement or a lease or, if practical, actually moving the structure.

88. The property manager suspects that the tenants in a property are engaging in illegal drug trafficking. What should the property manager do? A. Cancel the property management agreement. B. Observe the property for 30 days and then tell the owner. C. Notify the owner immediately of the suspicious activity. D. Don't worry. It's the owner's problem.

C. The property manager is the owner's agent, but not his "proxy." That is, he must inform the owner but not act on his behalf without authorization. For example, while calling the police to investigate might be appropriate, if the manager's suspicions were groundless and he called the authorities without authorization, the tenants might be able to sue the owner.

119. Which of the following is within the authority of the real estate commission? A. enact the laws that govern real estate licensees B. administer the real estate examinations C. make and enforce the rules by which all real estate licensees must abide D. all of the above

C. The real estate commission is authorized to write rules and regulations that have the force of law.

91. When a seller has a change of heart AFTER accepting an offer, which of the following applies to the seller's broker? A. The broker has no right to a commission because the transaction was never completed. B. The broker can sue the seller. C. The broker IS entitled to collect a commission. D. The broker may retain the deposit as a commission.

C. The seller had accepted the offer, thus the broker had earned a commission. However, the broker may not take his commission from the deposit, which must be returned to the buyer.

5. The word "improvement" would refer to all of the following EXCEPT: A. streets. B. a sanitary sewer system. C. trade fixtures. D. the foundation.

C. The term "trade fixture" refers to an item installed by a tenant in a rented commercial property that he or she removes at the end of the occupancy. More on this topic follows.

7. Certain items on the premises that are installed by the tenant and are related to the tenant's business are called: A. fixtures. B. emblements. C. trade fixtures. D. easements.

C. The term is usually applied to a commercial tenant and refers to items installed in connection with his or her business, such as stoves and refrigerators in a restaurant or display cases in a retail shop.

135. For renewal of a real estate license, which of the following is a mandatory requirement? A. three 12-hour classes in listing buying, and ethics B. 18 hours of home study C. there are no mandatory requirements D. 8 hours of legal update and 4 hours of ethics

C. There are no mandatory education requirements to renew a salesperson's license in New Jersey.

26. To create a joint tenancy relationship in the ownership of real estate, there must be unities of: A. grantees, ownership, claim of right, and possession. B. title, interest, encumbrance, and survivorship. C. possession, time, interest, and title. D. ownership, possession, heirs, and title.

C. This essentially means that all parties to the agreement share equally in all aspects of the property, including the length of time it's been held. That means if one party sells or transfers interest in a joint tenancy relationship, his or her place is taken by another in the same capacity.

80. When a prospective buyer makes a written purchase offer that the seller accepts, then the: A. Buyer may take possession of the real estate. B. Seller grants the buyer ownership rights. C. Buyer receives legal title to the property. D. Buyer receives equitable title to the property.

D. "Equitable title" means that the prospective buyer has obtained the right to acquire ownership of a property currently owned and occupied by another.

31. A mechanic's lien would be properly classified as a(n): A. equitable lien. B. voluntary lien. C. general lien. D. statutory lien.

D. A "statutory lien" is one that arises out of specific law (otherwise known as statutes). By contrast, an "equitable lien" has its roots in common law or custom. A "voluntary lien" is one entered with the property owner's knowledge and consent, such as a mortgage. A "general lien" grants a creditor the right to file a claim against all of a debtor's assets, not just a particular property.

28. When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n): A. deficiency judgment. B. lis pendens. C. estoppel certificate. D. mechanic's lien.

D. A mechanic's lien is the first, and usually most cost-effective, step for a person providing labor and/or materials to a homeowner to recover monies owed—in large part because of the pressure it puts on the homeowner to settle quickly and without costly court involvement.

13. Homeowner Ginny acquired the ownership of land that was deposited by a river running through her property by: A. reliction. B. succession. C. avulsion. D. accretion.

D. Accretion means the addition to a parcel of land by sand or soil deposits due to the action of a river or other body of water over time. Avulsion refers to the loss of land as a result of its being washed away by sudden or unexpected action of nature, such as a flash flood that re-routes a river.

1. Many states determine the order of water rights according to which users of the water hold a recorded beneficial use permit. This allocation of water rights is determined by: A. accretion. B. riparian theory. C. littoral theory. D. the doctrine of prior appropriation.

D. All terms relate to water rights, with "riparian" -- the right to use water adjacent to one's property -- being the most common in sections of the U.S. where water is abundant. However, in states where water is scarcer, a form of "prior appropriation" applies. Also known as "first in time is first in right," it grants water rights to divert a specific amount of water from a specific source to irrigate a specific piece of property. Those rights are then assigned a priority based on when the right was first used or applied for. In periods of peak demand, they give those whose claim is the oldest the right to get their water first.

126. Which of the following statements is true with regard to applications for a real estate license? A. applications must be made by May 31 of each year B. a photo must be included C. must be notarized D. must be submitted to the real estate commission within one year of successful completion of a prelicense course

D. Applications for a license in New Jersey must be submitted to the Real Estate Commission within one year of the date when a candidate successfully completed the prelicense course.

44. The condemnation of private property for public use is exercised under which government right? A. taxation B. escheat C. manifest destiny D. eminent domain

D. As noted previously, eminent domain actions are generally reserved for "public good" projects such as highway expansion. However, there have been recent instances of municipalities using this power to condemn well-kept neighborhoods of middle-class housing to make way for high-end properties that will provide a higher tax base.

24. Jim, Manny and Harry are joint tenants owning a parcel of land. Harry conveys his interest to his long-time friend Wendell. After the conveyance, Jim and Manny: A. become tenants in common. B. continue to be joint tenants with Harry. C. become joint tenants with Wendell. D. remain joint tenants owning a two-thirds interest.

D. Because joint tenancy must be declared, Jim and Manny remain joint tenants with a two-thirds interest while Wendell, because of his passive acquisition of his share of the property, becomes a tenant in common with Jim and Manny. The difference between the two forms is that Jim and Manny's share retains the right of survivorship provisions but Wendell's does not.

92. Both a buyer and a seller have agreements with the same real estate agency. Can the buyer make an offer on the seller's property? A. Yes, if both the buyer and seller have written agency agreements. B. No, because the agency cannot act as dual agent. C. Yes, if the seller has agreed to pay the commission. D. Yes, if both the buyer and the seller give their consent to dual agency.

D. Both parties must agree to dual agency. Then the brokerage can represent both seller and buyer.

100. Which of the following best describes a dual agency situation in which a broker may collect a commission from both the seller and the buyer? A. The buyer and the seller are family members. B. The buyer and the seller are represented by attorneys. C. The broker had the listing from the seller and represented the buyer as well. D. Both buyer and seller gave their informed consent to the compensation arrangements.

D. Both parties must give informed consent to dual compensation. Dual agency does not require that seller and buyer be represented by attorneys.

97. A buyer-brokerage contract in New Jersey is best described by which one of the following? A. These contracts are illegal in New Jersey. B. These contracts are not regulated under the NJ license laws. C. Buyer-brokerage contracts in NJ require specific forms. D. Buyer-brokerage contracts in NJ must be in writing to be enforceable.

D. Buyer-brokerage contracts are considered employment contracts and must be in writing to be enforceable.

8. Personal property includes all of the following EXCEPT: A. chattels. B. fructus industriales. C. emblements. D. fixtures.

D. Chattel" is a legal term that means personal property. Emblements and fructus industriales refer to profit from crops that are grown as a result of a person's labor, such as corn, as opposed to those that occur naturally, such as grass or minerals. By the custom of English common law, they are considered personal property. By contrast, a fixture is considered attached to a property and thus part of the structure.

70. All of the following are duties of the property manager EXCEPT: A. reporting to the owner all notices of building violations. B. providing upkeep and maintenance on the property. C. maintaining financial records and accounts. D. securing tenants of a particular ethnic origin in accordance with the owner's wishes.

D. Except in certain circumstances regarding the rental of space within one's personal residence or unit, owners, landlords and their agents are not permitted to discriminate against people based on race, gender, creed, handicap and other personal characteristics.

53. A Savings & Loan institution would be violating the Federal Fair Housing Act by denying a loan to Mr. and Mrs. Happy Borrower for which of the following reasons? A. low earnings B. too old C. too many loans D. minority background

D. Fair Housing and other anti-discrimination legislation doesn't force lenders or others to abandon sound business practices (such as denying loans to unqualified borrowers), merely to be fair and equally accessible to all people.

45. When a claim is settled by a title insurance company, the company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is known as what? A. caveat emptor B. surety bonding C. subordination D. subrogation

D. For example, let's say Amanda Livingstone buys a property and the seller provides a general warranty deed stipulating clear title. However, that turns out not to be the case and a third party provides a valid claim to a share of the property. Since Amada took out title insurance, the title insurance company negotiates and pays a settlement with the claimant on Amanda's behalf. Amanda's right to sue the seller then transfers to the title insurance company, which will take action to recover the amount they paid on Amanda's behalf.

16. Jim and Sandy are next-door neighbors. Sandy tells Jim that he can store his camper in her yard for a few weeks until she needs the space. Sandy did not charge Jim rent for the use of her yard. Sandy has given Jim a(n) what? A. easement appurtenant B. easement by necessity C. estate in land D. license

D. Granting the use of property for a defined period for a specific purpose is almost always a form of licensing. Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks.

25. In a gift of a parcel of real estate, one of the two owners was given an undivided 60 percent interest and the other received an undivided 40 percent interest. The two owners hold their interests as what? A. cooperative owners B. joint tenants C. community property owners D. tenants in common

D. In order to create joint tenancy, some form of relationship must exist between the parties involved, whether business, spousal or other. Because their interests were acquired as a gift, the parties in this instance become tenants in common, with all the ownership benefits of joint tenancy, but not the survivorship rights.

137. With regard to licensing and duties of personal real estate assistants, which of the statements is correct? A. they must be licensed B. they may host open houses and home show booths C. they must be unlicensed D. they may insert facts and details into form contracts under the supervision of the employing broker

D. Insertion of factual information into a contract is considered secretarial work which may be performed under the supervision of the broker and licensee

23. Tom leases store space to Kim for a restaurant, and Kim installs her ovens, booths, counters, and other equipment. When do these items become real property? A. when they are installed B. when Kim defaults on her rental payments C. when the lease takes effect D. when the lease expires, if the items are not taken by the tenant

D. Kim is free to move these fixtures at the end of her lease. However, if she chooses to leave them behind, they are considered a permanent part of the structure (just like a dining room chandelier in a home) and revert to Tom.

103. Lynn represents the Brawleys who are selling their property. Which of the following actions must Lynn take when prospective buyers ask to see the property? A. inform them, either orally or in writing, that she represents the seller B. inform them that they must complete a buyer representation agreement C. she may show them the property without any required disclosures or agreements D. inform them in writing that she represents the seller's interests

D. Lynn must disclose in writing that she represents the seller. The disclosure is necessary so that the buyer understands he or she is not being represented by the seller's agent.

75. If, upon the receipt of an offer to purchase his property under certain conditions, the seller makes a counteroffer, the prospective buyer is: A. bound by his original offer. B. bound to accept the counteroffer. C. bound by whichever offer is lower. D. relieved of his original offer.

D. Offers are "one-time-only" events that must be accepted or rejected. Once the seller made a counter-proposal, he rejected the buyer's offer and no contract exists. The buyer is under no obligation to continue and is entitled to have any earnest money that accompanied the offer returned immediately.

61. What type of a listing agreement allows the owner to appoint an exclusive agent to sell his property, but retains the right to sell the property himself? A. open B. exclusive right to sell C. multiple listing D. exclusive agency

D. Open listings mean that if the owner or any other broker or salesperson produces the buyer, the broker will lose his or her commission. Exclusive Right to Sell gives the broker his or her commission regardless of who actually sells the property, even if it is the owner. Exclusive Agency allows the seller to appoint an exclusive agent, but retain the right to sell the property himself.

6. All of the following are physical characteristics of land EXCEPT: A. indestructibility. B. uniqueness. C. immobility. D. scarcity.

D. Scarcity is a fundamental economic concept that holds that the rarer and more desirable something is, the more valuable it will be. For example, professional athletes are highly paid because only the smallest percentage of people have the ability to perform at that level. Land is "scarce" because there is a finite amount available and, as Will Rogers once said, "They ain't making any more of it."

69. Jim Jones, the landlord, rents a property to Tom Smith, a handicapped person. Mr. Smith, with Mr. Jones' permission, modifies the house to suit his needs. When the lease expires, which of the following requirements would not have to be met by Mr. Smith? A. Mr. Smith must remove the "grab rails" in the bathroom that were installed for his use. B. Mr. Smith must raise the kitchen cabinets that were lowered for his use. C. Mr. Smith must repair the walls where the "grab rails" in the bathroom were removed. D. Mr. Smith must restore the wide doorways that were installed for him, to the original size.

D. Since the width of the door will not in any way be detrimental to future tenants, there is not a requirement for the original width of the doors to be replaced by the handicapped tenant. All of the other issues must be restored to original status.

3. Which of the following types of ownership CANNOT be created by operation of law, but must be created by the parties' expressed intent? A. community property B. tenancy in common C. condominium ownership D. tenancy by the entireties

D. Tenancy by the entireties is a form of ownership that husbands and wives can choose or create by deciding to do so and declaring it as such in contracts and deeds. Tenancy in common is put in motion by state law. Community Property is a law of ownership that exists in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and some other states. Tenancy by the Entireties is an estate that is recognized in some states between husband and wife, who have equal right of possession and enjoyment during their joint lives and with the right of survivorship--that is when one dies, the property goes to the surviving tenant. (In many states, if couples do not specify "Joint Tenancy," this form of ownership will be automatically assumed.) Tenancy in Common is a type of joint ownership by parties NOT married, that allows a person to sell his share or leave it in a will without the consent of the other owners. If a person dies without a will, his share goes to his heirs, not to the other owners.

111. To whom must agency disclosure be given when a broker represents a seller of property? A. the seller, at the time the listing agreement is signed B. the seller, at their first face to face meeting C. the purchaser, before the purchase contract is signed D. the purchaser, at their first face to face meeting

D. The agency disclosure must be made at the beginning of the first personal meeting with the purchaser so that the buyer is aware of the agency representation options.

4. Which of the following is/are considered to be personal property? A. wood-burning fireplace B. furnace C. bathtubs D. patio furniture

D. The concept of personal property typically comes into play at the time of sale. Things that are part of the house--bathroom fixtures, fireplaces, carpeting and such-- go with the sale. (Unless specifically excluded, as can happen in the case of a dining room chandelier or one or two other objects with which the owners have an emotional attachment.) Furniture, rugs, lamps and other portable items that are not "nailed down" constitute personal property and are not included in the sale.

142. Of the following statements concerning the New Jersey Real Estate Commission, which one is NOT CORRECT? A. Required examinations for all license applicants are administered by a testing company B. An executive director is employed to operate the commission's activities C. All real estate licensees must abide by the rules that are made and enforced by the Commission D. members of the commission are selected by the state association of Realtors

D. The state association of Realtors does not select the members of the commission. All other statements are true.

115. Anne is a broker whose buyer client wants to purchase one of her listings. Which of the following is correct? A. If Anne can utilize another salesperson, there is no problem. B. Anne should not have shown the buyer the listing C. Anne should refer the buyer to another broker to close the sale D. The seller and the buyer must be informed of the situation and agree to Anne representing both of them

D. This is acceptable if both the buyer and the seller are informed of the situation and both agree to the dual representation.

22. Evan lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, Evan owns stock in the corporation and has a lease on his apartment. This type of owner A. condominium. B. planned unit development. C. time-share. D. cooperative.

D. This is the distinguishing characteristic that differentiates cooperative from condominium ownership. Although often confused, a condominium owner holds title to his individual unit. A co-op owner, on the other hand, is technically a renter. It's his stock in the corporation holding title to the property that gives him the right to lease the unit as well as sell that right to another.

86. A breach of contract is a refusal or a failure to comply with the terms of the contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT: A. Sue the seller for specific performance. B. Rescind the contract and recover the earnest money. C. Sue the seller for damages. D. Sue the broker for non-performance.

D. While brokers and salespeople are responsible for bringing people together, they cannot be expected to know every detail of their circumstances or intent. Thus, if a buyer cannot get clear title or a seller is unexpectedly transferred, it is not the broker's fault the transaction failed and he or she bears no responsibility or liability.