Legal Compliance & Documentation Flashcards
7 cards from real CFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Legal Compliance & Documentation flashcards as text
A field agent discovers that a property owner has constructed an addition without a permit. What is the agent's primary obligation?
Answer: Document the unpermitted structure and note it in the report
Field agents must document unpermitted structures in their report as a material finding without taking enforcement action on behalf of any party.
Which federal law governs the disclosure of lead-based paint in residential properties built before 1978?
Answer: Title X of the Housing and Community Development Act
Title X of the Housing and Community Development Act (1992) requires sellers and landlords to disclose known lead-based paint hazards in pre-1978 housing.
When a field agent signs an inspection report, this signature legally represents:
Answer: Certification that the report accurately reflects the agent's professional observations
The agent's signature certifies that the report reflects their honest, professional observations made during the inspection.
A client asks a field agent to omit a minor defect from the report to avoid delaying closing. The agent should:
Answer: Include it regardless of the client's request
Field agents must include all observed defects in the report regardless of client pressure, as omission could constitute fraud.
What does E&O insurance protect a field agent against?
Answer: Claims arising from professional mistakes or negligent omissions in the agent's work
Errors and Omissions (E&O) insurance covers the agent for professional liability arising from mistakes or omissions in their professional services.
Under RESPA, which of the following is prohibited in a real estate transaction?
Answer: Accepting a kickback or referral fee for settlement services
RESPA Section 8 prohibits kickbacks and unearned fees in connection with federally related mortgage loan settlement services.
A field agent observes suspected mold growth. Without proper mold certification, the agent should:
Answer: Note the visible condition and recommend evaluation by a qualified mold specialist
Agents without mold certification must limit reporting to observable conditions and refer further assessment to a certified specialist.