License Law 1

Under the NC Mechanic's Lien statute an owner of property must designate a mechanic's lien agent (MLA) under which of the following situations? A) an owner who is making improvements to public buildings B) the improvements are less than $30,000 C) the improvements are to a primary residence D) a new roof is being placed on a vacation rental unit that costs $42,000

A new roof is being placed on a vacation rental unit that costs $42,000 (a mechanic's lien agent is designate by the owner of the property receive notice of the lien. This is not required for improvements to a primary residence or when the improvements are less than $30,000. Because these improvements are not to a primary residence and exceed $30,000 a lien agent must be designated under the statute)

All of the following are requirements of licensure for a NC real estate license, EXCEPT: A) possess a social security number B) be a united state citizen C) file a complete application D) be a resident of NC

Be a resident of NC

How long does a provisional broker have to activate their license front he date of licensure? A) 180 days B) there is no required time period for license activation C) 30 days D) 1 year from the date of licensure

There is no required time period for license activation (there is no required time from for a provisional broker to activate their license. A license may remain on inactive status indefinitely)

How long is an applicant's examination eligibility period to take the NC real estate examination once the commission has approved their application? A) 60 days B) 90 days C) 180 days D) 360 days

180 days

If a licensee does not pay their renewal fee on or before June 30th of the year, what is the time period for the licensee to reinstate their license without the imposition of additional educational requirements? A) 30 days B) 60 days C) 6 months D) one year

6 months

Which of the following do not need a real estate license to sell property? A) a corporation that owns property and issuing an employee to sell the property B) an auction house that deals in the sale of real property C) an attorney who regularly and routinely assists others in the buying and selling of real property D) an unlicensed assistant sitting in an open house

A corporation that owns property and is using an employee to sell the property (a real estate license is never needed when handling your own property. A corporation's W2 salaried employees who are not paid on a commission basis are considered as dealing with the corporation's own property, therefore do not need a license)

All of the following are required in order to obtain a NC real estate license, EXCEPT: A) a high school diploma B) completing an application C) successfully completing a 75 hour course and passing a school final examination D) age of at least 18

A high school diploma

All of the following are true of a project broker within a NC Timeshare, EXCEPT: A) the project booker is designated by the developer or owner of the timeshare B) the project broker must be an actively licensed broker C) a provisional broker may serve as a project broker D) the project broker is responsible for supervision and management of the time share project and all licensees that are associated with the project

A provisional broker may serve as a project broker

All of the following are considered exempt from licensure and considered to be dealing with their own property, EXCEPT: A) the general partners of a partnership B) the managers of an LLC C) the officers, directors, and W2 salaried employees of a corporation D) a sole proprietor and their W2 salaried employees

A sole proprietor and their W2 salaried employees (only the sole proprietor would be exempt. No exemption would apply to the W2 salaried employees of a sole proprietorship, an LLC, or a partnership)

All of the following are true under the NC Condominium Act, EXCEPT: A) the units are usually separately taxed and assessed B) there must be a unit owner's association prior to the transfer of the first unit C) a unit owner is prohibited from ownership of land and must take only title to their individual unit D) if the buyer cancels within the 7 day rescission period all money must be returned promptly with no penalty

A unit owner is prohibited from ownership of land and must take only title to their individual unit (the definition of a condominium is when an individual owns both their unit and shared ownership of the common area)

A non-provisional real estate licensee is on inactive status. They are NOT holding themselves out to be available to help others buy, sell, rent, or auction property. A friend asks for their help in a real estate transaction. Which of the following is TRUE? A) because they did not actively advertise or solicit the business the licensee may assist their friend, but they will have to be paid directly, not through the brokerage firm B) the agent may assist their friend so long as they activate their license before the transaction closes and they are paid C) an agent who's license is inactive may not earn any fees or represent others in a real estate transaction D) because the agent is a full broker they are not required to affiliate with a BIC and therefore the licensee amy represent their firmed and collect a fee

An agent who's license is inactive may not earn any fees or represent others in a real estate transaction (a licensee on inactive status may not earn any fees or be involved in brokerage activities. The commission is concerned with the status of the license at the time the money was earned, not when it was received)

Which of the following must have a NC real estate license? A) a crier of sales B) an investor who is purchasing rental properties and placing them back on the market for sale C) the executor of an estate selling their parent's property and received a fee at the executor D) an auctioneer

An auctioneer

The NC Homestead Exemption would be of importance and have the greatest impact on: A) a borrower who is in default on their property and facing foreclosure B) an individual who filed bankruptcy due to excessive medical bills and judgments liens C) an investor who must engage in the short sale of an investment property D) a married couple who is selling their primary residence to a buyer

An individual who filed bankruptcy due to excessive medical bills and judgment liens (the NC homestead exemption act applies to personal residence and provides protection against judgment creditors)

An applicant will forfeit both their examination and license application fees and their license will b canceled for all of the following, EXCEPT: A) failure to take the examination within the 180 day period B) failure to appear for an examination appointment as scheduled C) attempting to reschedule an examination appointment D) appearing more than 15 minutes late for a scheduled examination appointment

Attempting to reschedule an examination appointment (applicants are not permitted to reschedule a second time)

All of the following could result in disciplinary action by the NCREC for unworthiness or incompetence, EXCEPT: A) making any willful or negligent misrepresentation B) pursuing a course of making false promises C) accepting commissions or valuable consideration as a provisional broker from any person other than your BIC D) attempting to take all of the post licensing courses in a single year

Attempting to take all of the post licensing courses in a single year

Henry is the manager and own of his own LLC. He has a full time salaried staff person, Sheila, that he employs to work for his LLC. Henry's company is buying homes, renovating them, and putting them back on the market. He has Sheila show the properties to prospective buyers. Who is in violation of NC Licensing Law? A) only Henry B) only Sheila C) both Henry and Sheila D) Neither Henry or Sheila

Both Henry and Sheila (In an LLC only the managers are considered to be deal with their own property. Henry could be involved himself without creating violation. However, Sheila cannot be involved without a license and it is a violation of licensing law both to pay and receive compensation for such unlicensed activity)

All of the following are correct statements about the compositions of the NCREC, EXCEPT: A) there are 9 appointed members of the NCREC B) the chairman of the commission is elected by the commission members C) commission members serve 5 year terms D) there are at least 3 licensees and at least 2 laypeople serving on the commission

Commission members serve 5 year terms (members of the NCREC serve for 3 years and may be reappointed at the end of their term)

An unlicensed assistant may do all of the following activities, EXCEPT: A) enter listings into the MLS B) exhibit for rent and provide tenants with information about the lease agreement C) exhibit homes that are for sale and show the buyer around the home D) fill in preprinted lease agreements and collect nonie from prospective tenants, as along s the employee does not negotiate rents

Exhibit homes that are for sale and show the buyer around the home (unlicensed property management assistants are permitted to show rental properties to prospective tenants, however, we do not allow unlicensed assistants to show homes or conduct open houses in residential sales)

It is correct to say that the NCREC may not fine a real estate licensee. However, the NCREC may do which of the following? A) order licensees to pay clients for damages caused and arbitrate disputes over fees B) fine a timeshare developer up to $500 per violation of the Timeshare Act C) revoke a broker's license if the broker fails to take the required number of continuing education hours per year D) dictate the amount of commission brokers may charge their clients and resolve commission disputes between agents

Fine a timeshare developer up to $500 per violation of the Timeshare Act

In the vent that a licensee's annual renewal fee is returned unpaid, the NCREC may take all of the following actions, EXCEPT: A) deny licensure renewal B) suspend the agent's license C) revoke the agent's license D) fine the agent

Fine the agent (if the fee is returned unpaid or the check is returned or insufficient funds the license would be expired because it was not properly renewed. The Commission could sos take any of the actions listed in the other answers)

In regard to real estate fees and commission between brokerages and clients what is the role of the NCREC: A) only sets maximum limits on the fees and commissions B) has no role in fees or commissions C) only becomes involved when a complaint is filed D) regulates the commissions exchanged between brokers, but not those exchanged with clients

Has no role in fees or commissions

All of the following are true when a real estate license is inactive due to a CE deficiency, EXCEPT: A) the licensee must complete all CE for the current year and make up the past deficiency up to a maximum of 16 hours B) the licensee must file an activation form once all CE is current C) the licensee may not earn any commissions or referral fees while inactive D) if the inactivity is for longer than 5 years the license will be considered expired

If the inactivity is for longer than 5 years the license will be considered expired

All of the following require the refilling of an applicant's application for a NC real estate license, EXCEPT: A) if the applicant delays taking the examination until after 180 expiration of their examination eligibility period B) if the license was expired for a period of more than 6 months C) if the license was surrendered or revoke for any period of time D) if the license was inactive for more than 2 years

If the license was inactive for more than 2 years (a licensee may remain inactive indefinitely. There is never a requirement to refile an application for a licensee to move from inactive to active status, regardless of the time period of inactivity)

If an active provisional broker pays their renewal fee before their second renewal, but does not take their 8 hours of continuing education before their second renewal, what is their license status on July 1st? A) active B) inactive C) expired D) suspended

Inactive

If a provisional broker does not complete the three 30 hours broker post licensing course within 3 years, what is their license after the 3-year period? A) active B) expired C) cancelled D) inactive

Inactive (failure to complete any required education will result in an inactive license. An expired license occurs when licensee fails to file their renewal or pay the license renewal fee)

A NC provisional broker's real estate license is initially issued on what type of status? A) active B) inactive C) probationary D) expired

Inactive (the initial license is issued on inactive status. in order to activate the license a provisional broker must affiliate with a BIC and the proper license activation form must be filed with the NCREC)

A provisional broker obtains their NC real estate license on April 15th and joins a real estate firm to remain active, the broker must pay the renewal fee to the NCREC on or before: A) June 30 of the current year B) June 30 of the following year C) June 10 of the current year D) December 31 of the current year

June 30 of the current year (although provisional brokers are not required to complete any CE until the 2nd renewal of their license, they still renew their license on June 30th)

In a NC condominium project, only certain owners have reserved parking spaces and garages. Under the NC Condominium Act, these areas would be known as: A) shared special assessments B) limited condo areas C) areas owned by the condominium owners associated D) exclusive rights areas

Limited condo areas (condo owners won an interest in their unit and shared ownership of the common areas. There can be certain areas only available twosome specified residents. These are called limited condo areas)

A corporation selling its own properties through the actions of its own salaried W2 employees A) is not required to have a firm license, but may not use its own employees B) can use its own unlicensed employees, but must have a firm license C) needs neither a firm license nor do its employees need to be licensed D) need not have a license, but must affiliate with a NC BIC

Needs neither a firm license nor do its employees need to be licensed (a corporation is exempt from licensure when dealing with its own property and using its own W2 salaried employees)

So long as it is part of his or her duties, is it legal for an unlicensed assistant to solicit listings for the broker? A) yes, if it is part of a written job description B) no, soliciting listings is the exclusive responsibility of the BIC C) yes, because he or she is being paid a salary not a commission D) no, active participation in soliciting real estate business requires a real estate license

No, active participation in soliciting real estate business requires a real estate license

Which of the following in INCORRECT about the post licensing requirement of a provisional broker? A) the due date of the post licensing education is the anniversary date of licensure B) post licensing consists of three 30 hour courses which may be taken in any order and must be completed within 3 years of the date of licensure C) post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th D) if a provisional broker does not complete post likening by the deadlines their license will become inactive

Post licensing courses end on June 10th and must be completed for the provisional broker to renew their license on June 30th

A provisional broker is subject to two separate education requirements. They must complete post licensing education of 90 hours within 3 years from the date of licensure. When must a provisional broker complete their first 8 hour CE requirement? A) within 1 year of the date of licensure B) at the conclusion of their post licensing education C) at the time of the first renewal of their license D) prior to the 2nd renewal of their real estate license

Prior to the 2nd renewal of their real estate license

Sherry is a provisional broker who works for a residential sales BIC and firm in NC. Sherry has a couples of clients who want her to manage their rental properties. What are Sherry's options? A) Sherry can manage the properties on her own outside of her existing firm B) with the permission of the BIC Sherry can also affiliate with another firm that engages in property management C) Sherry can manage the rental properties only if she obtains a power of attorney from the owners D) Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC

Sherry can refer the clients to a property management firm and earn a referral fee that is paid to her through her BIC

Jack is a licensed real estate professional in Illinois. He has been a broker for many years, but is not licensed in NC. Jack has a friend who wants to purchase a home in Charlotte, NC. In regard to the representation of this buyer all of the following are TRUE, EXCEPT: A) Jack may refer the buyer to a licensed NC broker and receive a referral fee even though he is not licensed B) Jack may meet with the buyer in Illinois and explain the purchase process and answer questions about the NC transaction C) so long as Jack affiliates with a NC broker he may accompany the buyer to NC and assist in showing the buyer property D) the NC real estate commission does not have jurisdiction over Jack unless Jack conducts illegal brokerage activities in NC

So long as Jack affiliates with a NC broker he may accompany the buyer to NC and assist in showing the buyer property (an out of state licensee cannot set foot in NC and participate in the real estate transaction without having a NC real estate license)

An individual licensed in another state may receive a waiver of the NC education requirements to complete the 75 hour Broker Pre-license course if they meet which of the following criteria: A) they must have been licensed in another state for a minimum of 10 years B) they must have taken another state's course within the last 5 years C) successful completion of another state's pre license course of at least 75 hours within the last 3 years D) be a resident of NC

Successful completion of another state's pre license course of at least 75 hours within the last 3 years

Al of the following would constitute an illegal action by an inactive licensee who is not affiliated with a firm, EXCEPT: A) tellings members of a networking club that they are a broker and offering members of the club their services B) handing out business cards at a social gathering C) telling a new acquaintance that they are a broker, but they are on inactive status D) hosting an open house for another agent

Telling a new acquaintance that they are a broker, but they are on inactive status (a licensee who is inactive may not advertise, solicit business, or engage in brokerage activities)

A provisional real estate broker must remove the provisional status of their license by taking 90 hours of post licensing courses. The 90 hour courses are divided into three 30 hour course. A provisional broker must take at least on of these 30 hour courses by which date? A) the annual renewal date of their real estate license B) the anniversary date of their real estate license C) the end of the first calendar year their license was obtained D) the second renewal of their real estate license

The anniversary date of their real estate license (post licensing deadlines have nothing to do with the month of June. The June deadlines are for CE courses. Post licensing due dates are the anniversary that the license was issued)

All of the following are TRUE if a time share is not properly registered in NC and public offering statement is not provided to a buyer prior to contract under the NC Timeshare Act, EXCEPT: A) it is a felony to not register the unites B) the purchaser may be entitled to a penalty of 10% of their purchase price of $3,000 whichever is greater C) the purchaser has a 5 day rescission period to cancel their purchase without penalty D) the buyer and the developer may agree to waive both the 5 day cancellation period and the provided of a public offering statement

The buyer and the developer may agree to waive both the 5 day cancellation period and the providing of a public offering statement

All of the following are TRUE about the character issues of an applicant of a NC real estate license, EXCEPT: A) an applicant must possess honesty, integrity, and good moral character B) a mandatory criminal background check is required C) the commission makes a character determination before an applicant is permitted to take the NC licensing examination D) an applicant has 60 days to request a hearing if the commission determines that they do no possess satisfactory character

The commission makes a character determination before an applicant is permitted to take the Nc licensing examination

When a corporation is involved in the sale or leasing of property that is owned by the corporation, who is exempt from the requirement to possess a real estate license? A) only the officers of the corporation B) only the directors of the corporation C) only the officers and directors of the corporation D) the corporation's officers, directors, and all W2 salaried employees are exempt from licensure

The corporation officers, directors, and all W2 salaried employees are exempt from licensure

General Statute 93A-2 states, in part, that a real estate broker is any person who, for compensation or valuable consideration or the promise thereof, lists or offers to list property. All of the following would constitute valuable consideration, EXCEPT: A) a listing agent is promised a weekend rip to Myrtle Beach if the agent puts the home under contract before the end of the year B) the owner of the a jewelry store gives his buyer's agent a diamond bracelet as a way of saying thank you for the agent's hard work C) a butcher offers a year's supply of top sirloin to this agent if they can purchase an investment property for 50% off the asking price D) the neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you

The neighbor brings fresh tomatoes from their garden and bakes their agent a fresh apple pie as a way of saying thank you (brokerage activities are defined as acting on behalf of another for compensation)

An unlicensed individual who transacts real estate for another or participates in the sale, lease, or exchange of another for compensation is subject to which of the following penalties? A) they are guilty of a felony B) they are guilty of a misdemeanor C) they are subject to a find of up to $10,000 D) they are subject to civil sanctions and a civil lawsuit

They are guilty of a felony

Which of the following statements is true about timeshares? A) they do not have to be registered with the NCREC B) they may be transferred prior to registering with the NCREC C) they must be registered with the NCREC prior to sale D) the timeshare broker amy be fined by the NCREC

They must be registered with the NCREC prior to sale (timeshares must be registered and approved by the NCREC. They cannot be transferred or sold without that registration)

All of the following statements are correct regarding the NCREC, EXCEPT: A) they shall be entitled to the services of the Attorney General of NC B) they shall not makes rules or regulations regulating commissions, salaries, or fees to be charged by licensees C) they shall makes rules to allow a licensee to pay a travel agent who doe snot have a real estate license a referral fee D) they shall have the power to make reasonable bylaws, rules, and regulations that are inconsistent with the provisions of the general statutes

They shall have the power to make reasonable bylaws, rules, and regulations that are inconsistent with the provisions of the general statutes

With regard to timeshares, all of the following are true, EXCEPT: A) a timeshare developer and broker must maintain records of sales, rentals, or exchange transactions for a minimum of three years B) all monies received by a timeshare developer or broker must be deposited within three banking days of receipt and remain in the trust account for ten days from the date of sale or until cancellation by the purchaser, whichever occurs first C) timeshares are not considered real estate and no license is required to sell timeshares in NC D) any refunds due to a cancellation of a timeshare purchase will be refunded within 30 days following the date of execution of the contract

Timeshares are not considered real estate and no license is required to sell timeshares in NC

All of the following are powers of the NCREC, EXCEPT: A) to conduct announced or unannounced audits of licensees B) to subpoena the books, records, and bank statements and accounts of a licensee C) to seek injunctive orders in court D) to order licensees to make restitution to clients and levy fines

To order licensees to make restitution to clients and levy fines

In NC under the Residential Property Disclosure Act, sellers of 1-4 unit residential properties must complete a MOG (mineral, oil, and gas disclosure). The purposes of this law include all of the following, EXCEPT: A) to require sellers to disclose to buyers if mineral, oil, and gas rights have been severed from the property B) to require sellers to disclose to buyers if miners,oil, and gas rights have been leased separately C) to prevent sellers from severing mineral, oil, and gas rights from a property D) to inform buyers if the seller does not intend to transfer mineral, oil, and gas rights

To prevent sellers from severing mineral, oil, and gas rights from a property (mineral, oil, and gas rights to real setae can always be sold separately from a real estate transfer. The requirement is one of disclosure and does not prevent the seller from severing such rights)

What is the first point at which a provisional broker may begin practicing real estate in NC? A) when the NCREC receives notification of the provisional broker's activation with a BIC B) upon successful completion of all course work and required examinations C) upon completion of all educational requirements D) upon formal notification from the NCREC that the candidate has successfully passed the real estate examination and has been issued a license number

When the NCREC receives notification of the provisional broker's activation with a BIC (once an applicant has passed the NC licensing examination, they are licensed, but their license is inactive until they affiliate with a brokerage. Provisional brokers are always inactive when they are not affiliated)

Judy is an unlicensed individual. Her parents are selling their own home as For Sale by Owner without the representation of a real estate licensee. While her parents are on vacation, Judy shows the home to some interested potential buyers and has long conversations with them about the conditions under which they may purchase her parents home. Judy's parents do not pay her in cash, but instead offer to send her on an upcoming vacation. Is Judy in violation of NC Licensing Law? A) no because the him wis her parent's own property and it is therefore exempt from the licensure requirement B) no because Judy did not receive any cash payment for her activity C) yes, Judy is engaged in the business of real estate without a license D) Yes because Judy is legally required to obtain a owed of attorney from her parents in this instance

Yes, Judy is engaged in business of real estate without a license (she is receiving compensation or valuable consideration and is assisting another on a property she does not own)

Can a real estate license renew an inactive license? A) yes, but they must pay a penalty for being inactive B) yes, because that will prevent the license from being expired C) no, a licensee cannot renew an inactive license because inactive means they have no completed the required education D) no, a licensee cannot renew an inactive license without refiling a license application

Yes, because that will prevent the license from being expired