Arkansas Real Estate License License Law and Disclosures 5 — Questions and Answers
Question 1: An Arkansas licensee wishes to sell their own personal property. Which of the following is TRUE?
- They need no disclosure since it is their own property
- They must disclose their licensed status in the transaction (Correct answer)
- They must hire another broker to list the property
- Personal transactions are exempt from license law
Correct answer: They must disclose their licensed status in the transaction
Arkansas licensees must disclose their licensed status in writing when buying or selling property for their own account.
Question 2: Which of the following acts requires an Arkansas real estate license?
- Managing your own personal rental properties
- Auctioning foreclosed properties as a licensed auctioneer
- Negotiating a lease on behalf of another person for compensation (Correct answer)
- Selling cemetery lots for a cemetery company
Correct answer: Negotiating a lease on behalf of another person for compensation
Negotiating leases for others for compensation is a licensed real estate activity in Arkansas.
Question 3: A licensee is found guilty of violating Arkansas license law. The Commission can take which of the following actions?
- Impose criminal penalties directly
- Revoke, suspend, or censure the license and/or impose a fine (Correct answer)
- Require the licensee to repay all earned commissions
- File a civil suit against the licensee in circuit court
Correct answer: Revoke, suspend, or censure the license and/or impose a fine
AREC's disciplinary powers include revocation, suspension, censure, probation, and civil fines — it cannot impose criminal penalties or file civil suits.
Question 4: Under Arkansas law, which individual is exempt from needing a real estate license?
- A property manager who collects rent for a fee
- An attorney-in-fact acting under a power of attorney for a single principal (Correct answer)
- A relocation company placing employees in homes
- A licensed mortgage broker referring buyers to listings
Correct answer: An attorney-in-fact acting under a power of attorney for a single principal
An attorney-in-fact acting under a valid power of attorney for a single principal is exempt from real estate licensing requirements.
Question 5: The Arkansas Real Estate Commission is composed of how many members?
- 5 members
- 7 members (Correct answer)
- 9 members
- 11 members
Correct answer: 7 members
The Arkansas Real Estate Commission consists of 7 members appointed by the Governor.
Question 6: A buyer asks an Arkansas seller's agent whether the neighborhood has experienced recent flooding. The agent knows it has but says nothing. This is best classified as:
- Puffery
- Active misrepresentation
- Negligent misrepresentation
- Fraudulent concealment (Correct answer)
Correct answer: Fraudulent concealment
Knowingly withholding material information that was directly asked about constitutes fraudulent concealment under Arkansas law.
Question 7: Under Arkansas license law, continuing education for license renewal must include which mandatory topic?
- Property tax law
- Fair housing (Correct answer)
- Construction methods
- Investment analysis
Correct answer: Fair housing
Arkansas requires licensees to complete fair housing coursework as part of their mandatory continuing education for renewal.
Arkansas Real Estate License License Law and Disclosures 5
An Arkansas licensee wishes to sell their own personal property.
Which of the following is TRUE?