CRECI Real Estate Law and Ethics 3

Question 1

In a triple net (NNN) lease, which costs does the tenant typically pay in addition to base rent?

Accepted Answer

Property taxes, insurance, and maintenance

Answer

In a triple net lease, the tenant pays base rent plus the three 'nets': property taxes, building insurance, and maintenance/operating expenses.

Question 2

Which doctrine allows a court to reform or cancel a contract when one party takes grossly unfair advantage of another's lack of sophistication or bargaining power?

Accepted Answer

Unconscionability

Answer

The unconscionability doctrine allows courts to void or modify contracts that are oppressively one-sided, particularly when there is unequal bargaining power.

Question 3

A commercial broker is offered a gift by a developer in exchange for steering clients to that developer's listings. Accepting this gift would most likely violate:

Accepted Answer

The broker's fiduciary duty of loyalty to clients

Answer

Accepting undisclosed gifts in exchange for steering clients violates the broker's fiduciary duty of loyalty, which requires acting in the client's best interest above all others.

Question 4

What is the primary purpose of a 'lis pendens' notice filed against a commercial property?

Accepted Answer

To provide public notice that litigation affecting the property is pending

Answer

A lis pendens is a recorded notice warning prospective buyers and lenders that a lawsuit is pending that could affect the property's title or ownership.

Question 5

Under RESPA (Real Estate Settlement Procedures Act), which of the following is prohibited?

Accepted Answer

Paying kickbacks for referrals of settlement service business

Answer

RESPA prohibits kickbacks and unearned fees paid in connection with federally related mortgage loans, as these inflate costs for consumers.

(CRECI) Commercial Real Estate Certification Institute Practice Test

(CRECI) Commercial Real Estate Certification Institute Practice Test

CRECI Real Estate Law and Ethics 3