State Practice Exam Extras
If performed by a landlord, which action would violate the Virginia Landlord and Tenant Act? Select one: A. He disclosed personal information to a broker since you mentioned buying a home soon B. He disclosed personal information to the local law enforcement without your consent C. He disclosed a summary of your rental payments to staff at an apartment complex D. None of the above
A- A landlord cannot release confidential information about tenants without written consent. However, there are certain exceptions to the rule. A landlord may release such information if the information was already public, only a summary of rental payments, related to law enforcement or emergency, for military purpose, for tax purpose, for the U.S. Census, requested by subpoena, or if requested by the landlord's property manager, lender, attorney, collection agency, or subsequent buyer of the property. The correct answer is: He disclosed personal information to a broker since you mentioned buying a home soon
If a licensee has placed her license on inactive status, it means: Select one: A. That she is not affiliated with a brokerage firm or sole proprietor B. That she had no sales or listings during the preceding 12 months C. That she is acting as a referral agent only, and is not active in selling and listing D. That she can engage in acts of brokerage on a selective basis
A- A person who not affiliated with a broker is considered "inactive." You must apply to have your license placed on inactive status if you are not affiliated with a broker. While inactive, you must not do anything that would constitute an act of brokerage. Those who act as "referral" agents must be legally active. The correct answer is: That she is not affiliated with a brokerage firm or sole proprietor
A person applying for a license by reciprocity must: Select one: A. Take and pass the Virginia portion of the licensing examination B. Be 21 years of age C. Be actively licensed for the last 48 months in their home state D. Sign an affidavit that they understand the laws of the state of Virginia
A- All applicants must pass the state portion of the licensing exam before applying for a Virginia reciprocal license. Any other requirements (ex. pre-licensing courses and the national portion of the test) can be waived at the Board's discretion. The correct answer is: Take and pass the Virginia portion of the licensing examination
Which of the following statements must be true about a real estate salesperson's license? Select one: A. It is mailed to the licensee for delivery to the employing broker B. It is prominently displayed in the main office of the salesperson's firm C. It is prominently displayed in the branch office where the salesperson works D. It is kept in the custody of the employing broker
A- All licenses are kept in custody of the principal broker at the main firm location. However, licenses do not need to be displayed in the main office or any branch office where salespersons may be assigned. Virginia only requires that the license be available upon request. The correct answer is: It is kept in the custody of the employing broker
Owner Kelly is leaving the area for a one year period. She asks Salesperson Boren to manage her rental home for $45 per month while she is gone. In this situation, which of the following statements is true? Select one: A. Boren must work through his broker B. Boren must put the $45 in an interest-bearing escrow account C. This is fine because the compensation is less than $1,000 D. This is fine because the time element is not longer than one year
A- Boren is "employed" by her broker and can only receive compensation through her broker for any act of real estate brokerage. Therefore, the arrangements must be made with the broker and Kelly. All brokerage activity must be through the employing broker (since salespersons cannot act alone). The correct answer is: Boren must work through his broker
The Virginia Real Estate Board is empowered to: Select one: A. Levy fines B. Reimburse aggrieved persons C. Adjudicate disputes between licensees D. Enforce the code of ethics
A- Of the choices given, the Virginia Real Estate Board only has the power to fine licensees. They may also suspend, revoke, or fail to renew a license. The Board does not pay aggrieved persons, but they do investigate complaints and can AUTHORIZE payments to be made from the Transaction Recovery Fund. The correct answer is: Levy fines
A salesperson would be subject to disciplinary action by the Real Estate Board for which of the following actions? Select one: A. Paying a finder's fee to an unlicensed person B. Acting for both buyer and seller with their mutual consent C. Refusing to hold an open house, at the request of his broker D. Accepting a referral fee from an out-of-state broker, through his employing broker
A- Of the listed choices, only "paying a finder's fee to an unlicensed person" is a violation of the License Law. Accepting a referral fee through your employing broker is permissible. However, you can never share a commission with an unlicensed individual. The correct answer is: Paying a finder's fee to an unlicensed person
Lisa is a licensed salesperson that is selling her own townhouse. She advertises her townhouse as a FSBO as follows: "Beautiful 3 bedroom townhouse. Excellent assumption. Single females only. Call 123-4567 for details. Owner is licensed." Which of the following statements is not true? Select one: A. Lisa, acting as the owner of the property, is exempt from Virginia Fair Housing Laws B. Lisa has disclosed her license status as required by Board regulations C. Fair housing laws do not apply to marital status D. This ad violates fair housing laws on the basis of sexual discrimination
A- Read the question carefully. The only statement that is not true is that Lisa is exempt. Lisa must still follow the Fair Housing Law (private individual owners are only exempt from the non-racial aspects). Further, Lisa does not meet the private owner exemption since she used discriminatory advertising. The correct answer is: Lisa, acting as the owner of the property, is exempt from Virginia Fair Housing Laws
A broker accepts a listing from a seller. In the agreement, the seller stipulates that the broker shall list the property on two different MLS directories. The broker only lists the property on one, but receives three offers within the first week. Under these circumstances, which of the following statements is correct? Select one: A. The broker has violated his fiduciary responsibility B. The broker is committed to finding a ready, willing, and able buyer and has complied with the agency agreement C. The broker has exercised appropriate discretion D. The broker, by agreement with the MLS, may not advertise listings in more than one MLS directory
A- Remember, you have an agency duty to follow all lawful instructions of the client. The correct answer is: The broker has violated his fiduciary responsibility
When a broker renews his license, which of the following items must accompany that renewal application? Select one: A. The renewal fee B. The renewal fee, plus $20 payment for the Transaction Recovery Fund C. The renewal fee, plus proof of membership in the Association of Realtors D. The renewal fee, plus proof of Errors and Omissions Insurance
A- The $20 fee for the Transaction Recovery Fund is only paid when a person first applies for their license. However, an additional assessment could be imposed if the fund drops below $400,000. To renew one's license, a person must complete all required education, fill out the renewal application, and send the renewal fee to the Board. The correct answer is: The renewal fee
The Board takes disciplinary action against a licensed salesperson. Which circumstance might also put the employing broker at risk of disciplinary action? Select one: A. If the broker knew or should have known of the agent's actions B. If the agent's actions were outside the authority granted by the employing broker C. Only if the salesperson is an employee of the broker, not an independent contractor D. The broker is automatically responsible for all actions of any person affiliated with the firm
A- The Board could discipline the principle broker or supervising broker if it can establish that the broker knew or should have known about the agent's actions. The correct answer is: If the broker knew or should have known of the agent's actions
Every resident broker licensed in Virginia MUST: Select one: A. Maintain an office in Virginia B. Maintain an escrow account in Virginia C. Employ at least one salesperson or associate broker that is also a resident of Virginia D. All of the above
A- This is a question where the word "MUST" (an absolute term) may cause problems. Brokers are only required to have an escrow account if they hold escrow funds on behalf of another. There is no requirement in the law regarding the number of employees. However, the law does state that EVERY resident broker is required to maintain an office in the State. Note that the broker may display signage at his office, but it is NOT required. The correct answer is: Maintain an office in Virginia
A real estate license could be suspended without investigation if the licensee: Select one: A. Engages in acts of brokerage while on inactive status B. Violates the Virginia Real Property Act C. Does not pay the Transaction Recovery Fund assessment D. All of the above
C- The only instance where your license can be suspended or revoked without a hearing is in relation to the Transaction Recovery Fund. Specifically, a license will be suspended if you fail to pay your assessment, and it will be revoked if you cause payment from the Fund. The correct answer is: Does not pay the Transaction Recovery Fund assessment
A salesperson who receives an earnest money deposit is NOT required to place the money in an escrow account: Select one: A. With the knowledge and consent of the parties B. With the permission of his or her broker C. With the written agreement of both parties D. Until 10 days prior to settlement
C- We have no way of knowing why the parties would agree to not use an escrow account. However, if all parties agree in writing, then it is OK. The correct answer is: With the written agreement of both parties
Broker Takahashi wants to open her own partnership. Her long-time friend, Sayumi, is not licensed as a real estate agent. However, she agrees to provide most of the start-up money in exchange for a share of the anticipated profits. Sayumi is therefore designated as a senior partner of the brokerage firm. Which of the following statements is correct? Select one: A. Sayumi cannot engage in acts of brokerage B. The partnership must have a separate license issued by the board C. Sayumi can be a senior partner, but she cannot be the principal broker D. All of the above
D- A person doesn't need a license to have ownership interest in a brokerage firm. However, all partners that engage in acts of real estate must be licensed. Since Sayumi does not have a real estate license, she can neither engage in acts of brokerage nor be the principal broker for the partnership. The correct answer is: All of the above
According to the Virginia Landlord-Tenant Act, security deposits: Select one: A. Are 100% refundable to the tenant B. Must earn interest to the benefit of the tenant C. Cannot exceed the equivalent of one month's rent D. Must placed in an escrow account
D- According to the VA Landlord-Tenant Act, landlords are no longer required to collect interest on security deposits to the benefit of the tenant. However, security deposits must be deposited into an escrow account. The correct answer is: Must placed in an escrow account
Which of the following persons is NOT exempt from the licensure requirements? Select one: A. A trustee who is required to sell a house at foreclosure B. An administrator who is required to sell a house in order to liquidate an estate C. A sheriff ordered by the court to sell a house at foreclosure D. An attorney-at-law who is regularly engaged as a real estate broker
D- An attorney is only exempt from licensing if required to perform an act of real estate IN THE NORMAL PRACTICE OF HIS OR HER PROFESSION. However, an attorney that is regularly engaged in the practice of real estate is not exempt. Therefore, the attorney who is regularly engaged as a real estate broker must have a real estate license. The correct answer is: An attorney-at-law who is regularly engaged as a real estate broker
A broker receives an earnest money deposit from the buyer on Thursday. When is the latest day he can deposit into his escrow account without violating VREB rules? Select one: A. Within 2 banking days B. Within 3 banking days C. Within 4 banking days D. Within 5 banking days
D- Brokers must deposit any earnest money, down payments, rental payments, security deposits, and advances before the end of 5th banking day. The correct answer is: Within 5 banking days
Which funds would NOT need to be held in an escrow account? Select one: A. Money received as a security deposit for rental housing B. An earnest money deposit, if closing is scheduled in less than 15 days C. An earnest money deposit of less than $500 D. A commission received from an out-of-state broker
D- Earned commissions need not be placed in escrow. The correct answer is: A commission received from an out-of-state broker
The Virginia Fair Housing Act prohibits discrimination on the basis of: Select one: A. Marital status B. Sexual preference C. Source of income D. Familial status
D- Familial status is a protected class under Virginia AND federal fair housing laws. This protection means that you cannot discriminate against someone because they are pregnant or have children under the age of 18. The correct answer is: Familial status
It is necessary to take and pass an examination in order to become licensed in Virginia. Which of the following persons could become licensed without taking an examination? Select one: A. An attorney who is licensed to practice law in Virginia B. A person who will only work as a referral agent C. A person who is currently licensed in another jurisdiction D. None of the above
D- In order to work as a real estate agent in Virginia, an individual must take and pass the license exam. Applicants through reciprocity may not have to take the full exam (state and national sections), but they MUST take and pass the state portion in order to apply for a VA reciprocal license. The correct answer is: None of the above
Licensees with an inactive license must: Select one: A. Apply for active status within 3 years B. Do nothing, as the license automatically renews every 2 years C. Retake their pre-license education and pass a licensing exam D. Either A or C
D- Licensees with inactive licenses must apply for active status within three (3) years or re-qualify (retake their pre-license education and exam). As always, the license activation is subject to the Board's discretion. Also remember that inactive licensees cannot engage in ANY acts that require a real estate license. The correct answer is: Either A or C
If a purchaser of a Virginia time-share estate rescinds the contract, the developer is required to refund any monies advanced by the purchaser within: Select one: A. 7 days B. 10 days C. 30 days D. 45 days
D- Note that the purchaser must receive a full refund (without penalty) within 45 days of the rescission request. The correct answer is: 45 days
The Real Estate Board consists of: Select one: A. 6 brokers, 2 salespersons, and 1 attorney B. 7 licensees (with at least 3 years experience) and 2 consumers C. 6 licensees and 1 consumer D. 7 licensees (with at least 5 years experience) and 2 consumers
D- The Board consists of 7 licensees (broker or salespersons) with at least 5 years experience, AND 2 consumers (citizens). The correct answer is: 7 licensees (with at least 5 years experience) and 2 consumers
A contract cannot be consummated due to a disagreement between buyer and seller. The broker still has the earnest money deposit in his escrow account. The seller demands that the deposit be given to him, but the buyer demands that the deposit be returned to her. What can the broker legally do? Select one: A. Immediately return the funds to the buyer B. Immediately give the funds to the seller C. Retain the funds as his commission D. Hold the funds until ordered by the court to disburse
D- The License Law and Regulations advise that if the sale is not consummated, the deposit should be disbursed as agreed upon by the parties (in the sales contract or otherwise). However, there is no agreement in this situation and no indication of the contract terms. Therefore, the only solutions are to let the courts hold the funds until the dispute is settled (interpleader), or to hold the money until a court orders the disposition of the funds. The correct answer is: Hold the funds until ordered by the court to disburse
The Virginia Property Disclosure Act applies to all of the following transactions, except: Select one: A. Property sales B. Property options C. Installment sales D. New home construction
D- The VA Property Disclosure Act does not apply to new home construction (a first sale), but it does apply to the other items specified. The correct answer is: New home construction
Which of the following persons could file a claim for payment from the Transaction Recovery Fund? Select one: A. A licensed salesperson, to recover money that his broker owes B. A lender, to recover losses sustained due to a real estate agent's misrepresentation C. A tenant, seeking to recover a security deposit from his landlord D. All of the above
D- This is a trick question. All the listed persons COULD FILE a claim, but none would be able to collect. When a claim is filed, the first step is to determine whether the claimant is eligible to receive payment from the Fund. Remember that consumers are the only ones eligible to collect under the Act, and only if they have been injured by a real estate licensee. The correct answer is: All of the above
A real estate broker pays $50 to an insurance broker for every referral that goes to closing. The insurance broker pays $50 to the real estate broker for every referral that buys insurance. This arrangement between the two is: Select one: A. Legal, as long as the fees paid are less than $100 B. Legal, if disclosed in writing to all parties C. Legal, if the insurance broker holds a salesperson's license D. Illegal
D- You may not pay referral fees or finder's fees to unlicensed persons. The referral fee would be permissible if the insurance broker were also licensed as a REAL ESTATE broker (a salesperson license is insufficient). The correct answer is: Illegal
If the named licensee is involved in multiple transaction violations, what is the maximum that a person may collect from the Transaction Recovery Fund? Select one: A. $10,000 B. $20,000 C. $100,000 D. None of the above
B- A single person can collect a maximum of $20,000 from the Fund, whether it is for a single transaction or multiple transactions. The correct answer is: $20,000
When a claim is paid from the Transaction Recovery fund, which of the following statements is true? Select one: A. The licensee named in the claim must post a bond in order to continue practicing real estate B. The claimant assigns his rights to the Board, to the extent of the amount of money paid by the Fund C. All claims submitted in relation to a licensee's misconduct in a single transaction may not exceed $20,000 D. All of the above
B- Once a claim is paid, the claimant subrogates his rights to the Board in order to allow for collection from the licensee. You may file a claim for as much as you want, but $20,000 is the most one person can collect. If multiple parties file against a licensee in a single transaction, their collective claims may not exceed $50,000. The correct answer is: The claimant assigns his rights to the Board, to the extent of the amount of money paid by the Fund
An initial time share purchaser has the right to rescind a contract without penalty. This right: Select one: A. Must be voided by the seller (developer) B. May be extended upon receipt of a revised POS C. Must be exercised within 3 days D. Must be exercised within 45 days
B- The initial purchaser of a time-share has a 7-day right of rescission after signing the contract. However, if there is a material change to the public offering statement (POS), this rescission period starts again from the date that the revised POS is received. The correct answer is: May be extended upon receipt of a revised POS
With the permission of his broker, a salesperson is representing a buyer. The salesperson goes to a showing for a listed property and properly advises the listing broker that he is representing the buyer. This situation: Select one: A. Would create a dual agency, which is illegal B. Is legal because proper disclosure has been made C. Allows the salesperson to collect full commissions from both buyer and seller D. Is legal, but violates the REALTOR Code of Ethics
B- The question tells us that the listing broker was advised of the buyer/broker arrangement, therefore this is legal. The correct answer is: Is legal because proper disclosure has been made
A prospective buyer enters a broker's office and is escorted into the conference room. After the broker has financially qualified the buyer, they begin to review available properties that meet the buyer's wants, needs, and financial limitations. When is the broker required to disclose the agency relationship? Select one: A. When determining the financial qualifications of the buyer B. When the buyer expresses an interest in a particular piece of property C. When the buyer has identified a property that is acceptable D. Before the broker and buyer begin to discuss any specific property
B- The regulation states that disclosure is required before you have "substantive" discussions about a specific property. If the buyer is expressing interest in a specific conversation, the conversation will soon progress into providing specific real estate assistance. The correct answer is: When the buyer expresses an interest in a particular piece of property
An award from the Transaction Recovery Fund will result in: Select one: A. Automatic suspension of the real estate license B. Automatic revocation of the real estate license C. A fine not to exceed $50,000 D. A fine not to exceed $20,000, and up to 6 months in prison
B- Upon payment of a claim, the Real Estate Board REVOKES the license of the person named in the complaint. The Board may impose a maximum fine of $2,500 per violation (ex. improper or dishonest conduct), but it cannot order a prison sentence. The correct answer is: Automatic revocation of the real estate license
Mitch, the principal broker at ZYX Firm, has reasonable suspicion that one of his associate brokers is stealing escrow funds. As a principal broker, Mitch must report this violation within how many business days? Select one: A. 5 B. 4 C. 3 D. 2
C- All licensees must report known escrow violations. Principal brokers must report escrow violations to the Board within three (3) business days of forming a reasonable belief that any violation occurred. The correct answer is: 3
After the death or disability of the only broker in a real estate firm, how long does a Board-approved person have to conclude the business? Select one: A. 120 B. 150 C. 180 D. 210
C- If a firm's principal broker dies or becomes incapacitated, the Board may approve an unlicensed person to conclude the firm's business (limited to 180 days). The correct answer is: 180
If a broker holds an earnest money deposit in an interest-bearing escrow account, what is the disposition of any earned interest? Select one: A. It is, by regulation, credited to the buyer B. It is always credited to the seller at closing C. The broker may keep the interest D. Escrow accounts cannot, by regulation, earn interest
C- Interest earned from escrow account deposits can be kept by the broker, as long as there is written disclosure and agreement by all parties. The correct answer is: The broker may keep the interest
Which of the following conditions is most likely to be a latent defect? Select one: A. The paint is peeling on the exterior of the house B. The house has a leaking basement C. The house's floor boards are rotting D. The driveway concrete is cracked
C- Latent defects are defects that are not readily apparent. Cracked concrete, leaking basements, and peeling paint are readily apparent defects. Usually, they are not considered as latent because they are not hidden. The correct answer is: The house's floor boards are rotting
Marty Fields just found out that he passed the Virginia real estate sales exam! What must Marty do before he can start selling real estate? Select one: A. Complete the mandatory post-license education requirement B. Apply for a temporary license until he affiliates with a broker C. Affiliate with a broker and submit an application for licensure D. Both A and C
C- Marty must submit an application, pay the associated fees, and affiliate with a broker. The salesperson license can then be activated and Marty will have permission to sell (no need to apply for a temporary license). New salespersons must complete PLE within the initial year of licensure, but they are able to sell before that deadline if they possess an active license. The correct answer is: Affiliate with a broker and submit an application for licensure
Hearings before the Virginia Real Estate Board must be held in accordance with the: Select one: A. Virginia Association of Realtors Regulations B. Uniform Commercial Code (UCC) C. Administrative Process Act D. Supreme Court Judicial Procedures Act
C- Note that the License Law gives the Real Estate Board authority to conduct hearings in accordance with the Administrative Process Act. The correct answer is: Administrative Process Act
The real estate license of any person or firm may be revoked by which of the following entities? Select one: A. Attorney General of the Commonwealth of Virginia B. Virginia Association of Realtors C. Virginia Real Estate Board D. Both A and C
C- Only the Board can revoke real estate licenses. If court action was brought against a licensee, the Attorney General may request that the Board revoke the real estate license. However, only the Board may actually perform such an action. The correct answer is: Virginia Real Estate Board
