Certified Residential Leasing Specialist (CRLS) — Questions and Answers

Question 1: A property has NOI of $90,000 and annual debt service of $72,000. What is its debt service coverage ratio (DSCR)?

0.80
1.50
1.25 (Correct answer)
1.18

Correct answer: 1.25

DSCR = NOI ÷ annual debt service = $90,000 ÷ $72,000 = 1.25.

Question 2: A competitor's tenant calls a leasing agent seeking to break their lease and move into the agent's building. What is the ethical course?

Discuss available units but not induce the tenant to breach an existing lease (Correct answer)
Refuse to speak with the tenant at all
Contact the competitor's manager to badmouth them
Advise the tenant to stop paying rent to the competitor

Correct answer: Discuss available units but not induce the tenant to breach an existing lease

REALTORS® may not induce parties to breach existing contracts, but can respond to inquiries from those parties.

Question 3: What common challenge do professionals face when applying Investment Analysis & ROI principles?

Obtaining permission to use the principles
The principles are too simple to present any challenge
Finding the relevant textbook chapter
Balancing theoretical best practices with practical constraints and real-world conditions (Correct answer)

Correct answer: Balancing theoretical best practices with practical constraints and real-world conditions

Professionals commonly face the challenge of adapting theoretical best practices in Investment Analysis & ROI to the practical constraints and varying conditions encountered in real-world settings.

Question 4: A $30,000 amenity upgrade increases annual net income by $7,500. What is the simple payback period?

5 years
4 years (Correct answer)
3 years
2.5 years

Correct answer: 4 years

Payback = cost ÷ annual benefit = $30,000 ÷ $7,500 = 4 years.

Question 5: In a Section 1031 like-kind exchange, within how many days of selling the relinquished property must the investor identify replacement property?

180 days
45 days (Correct answer)
60 days
30 days

Correct answer: 45 days

Replacement property must be identified within 45 days and the exchange completed within 180 days.

Question 6: Which leasing strategy is most likely to improve the tour-to-lease ratio?

Tailoring the tour to the prospect's stated needs and showing a ready, clean unit (Correct answer)
Skipping the needs assessment to save time
Showing only the most expensive units
Showing every available unit regardless of needs

Correct answer: Tailoring the tour to the prospect's stated needs and showing a ready, clean unit

A customized tour of a market-ready unit that matches stated needs builds desire and trust.

Question 7: A leasing agent shows families with young children only the units next to the playground on the first floor. This practice is best described as:

Reasonable accommodation
Redlining
Steering (Correct answer)
Blockbusting

Correct answer: Steering

Steering directs people toward or away from certain areas or units based on a protected class, such as familial status.

Question 8: What is a standard move-out checklist used for in residential leasing?

To calculate the tenant's prorated final rent
To schedule the next tenant's move-in date
To list items the tenant must purchase before leaving
To systematically document the property's condition at move-out and compare it to move-in records (Correct answer)

Correct answer: To systematically document the property's condition at move-out and compare it to move-in records

A move-out checklist provides an itemized record of the unit's condition at departure, which is compared to the move-in report to identify chargeable damages.

Question 9: What information should always be included in a rental property advertisement?

The landlord's personal life story
Comparisons to neighboring properties
Rent, deposit, amenities, pet policy, and contact info (Correct answer)
Only the monthly rent amount

Correct answer: Rent, deposit, amenities, pet policy, and contact info

A comprehensive rental advertisement attracts qualified tenants by providing all essential information upfront. Including details like rent, deposit, amenities, pet policy, and contact information allows prospective renters to quickly determine if the property meets their needs. This transparency saves time for both landlords and applicants by pre-screening interested parties and setting clear expectations.

Question 10: Which federal law prohibits ALL racial discrimination in property transactions, with no exemptions?

Housing for Older Persons Act of 1995
Civil Rights Act of 1866 (Correct answer)
Fair Housing Act of 1968
Fair Housing Amendments Act of 1988

Correct answer: Civil Rights Act of 1866

The Civil Rights Act of 1866, upheld in Jones v. Alfred H. Mayer Co. (1968), bars race discrimination with no exemptions.

Question 11: What is the main purpose of preparing a "model" or "show" unit?

To store maintenance supplies
To house the leasing office
To meet a legal requirement
To let prospects visualize living in the home and see its potential (Correct answer)

Correct answer: To let prospects visualize living in the home and see its potential

A furnished, well-staged model helps prospects emotionally connect with the space and imagine themselves living there.

Question 12: HUD's 'Keating Memo' guidance generally treats which occupancy standard as reasonable?

Two persons per bedroom, subject to other factors (Correct answer)
Three persons per bedroom
One person per bedroom
No limit at all

Correct answer: Two persons per bedroom, subject to other factors

Two persons per bedroom is a general guideline, adjusted for factors like bedroom size, children's ages, and unit layout.

Question 13: A property receives 120 leads, 48 tours, and 16 leases in a month. What is the lead-to-lease conversion rate?

10%
40%
33.3%
13.3% (Correct answer)

Correct answer: 13.3%

Lead-to-lease conversion is 16 / 120 = 13.3%.

Question 14: Before acquiring a rental property, an investor orders an ASTM E1527 report to support the CERCLA innocent landowner defense. What is this report?

An ADA accessibility audit
A radon mitigation plan
A Phase I Environmental Site Assessment (Correct answer)
A property condition assessment

Correct answer: A Phase I Environmental Site Assessment

A Phase I ESA following ASTM E1527 is used to establish 'all appropriate inquiries' for CERCLA liability protection.

Question 15: How can a landlord raise the rent on a month-to-month tenancy?

By giving proper written notice as required by state law, often at least 30 days (Correct answer)
Immediately, with verbal notice
Only when a fixed-term lease is signed
Only once every five years

Correct answer: By giving proper written notice as required by state law, often at least 30 days

Periodic tenancies allow rent changes after proper advance written notice, and many states set the notice period at 30 days or longer.

Question 16: What is the generally recommended minimum height for a pool barrier fence under widely adopted residential pool safety codes?

72 inches
42 inches
48 inches (Correct answer)
36 inches

Correct answer: 48 inches

Model pool codes call for barriers at least 48 inches high with self-closing, self-latching gates.

Question 17: Which leasing question is permissible to ask ALL applicants?

Have you ever been in a mental health facility?
Do you take any prescription medications?
Do you have any disabilities?
Can you meet the lease requirements, such as paying rent on time? (Correct answer)

Correct answer: Can you meet the lease requirements, such as paying rent on time?

Providers may ask all applicants whether they can meet tenancy requirements but may not ask about the existence, nature, or severity of a disability.

Question 18: When evaluating whether to offer a lease renewal to an existing tenant, which factor is MOST important?

Whether the tenant has ever submitted a maintenance request
The tenant's payment history and compliance with lease terms (Correct answer)
The length of the tenant's current employment
The tenant's willingness to accept a rent increase of any amount

Correct answer: The tenant's payment history and compliance with lease terms

A tenant's history of on-time payments and adherence to lease rules is the strongest predictor of future tenancy quality and the most critical renewal criterion.

Question 19: Under the Code, when a dispute over commission arises between REALTORS® in different firms, what is generally required?

Public posting of the dispute online
Mediation or arbitration through the association (Correct answer)
Immediate filing of a lawsuit
Settlement through the MLS listing agent alone

Correct answer: Mediation or arbitration through the association

Article 17 requires REALTORS® to arbitrate contractual disputes through the association rather than litigate.

Question 20: What should be the first action when a new regulation is enacted that affects your practice?

Delegate review to the newest team member
Wait for enforcement before making changes
Assume existing procedures already comply
Review the regulation, assess its impact, and develop an implementation plan (Correct answer)

Correct answer: Review the regulation, assess its impact, and develop an implementation plan

When new regulations are enacted, professionals should promptly review them, assess their impact on current practices, and develop a structured implementation plan.

Question 21: A tenant asks to strike the 'no pets' clause and the landlord agrees verbally, but the signed lease still contains the clause. What is the best practice for the leasing agent?

Rely on the verbal agreement since both parties consented
Note the change in the agent's personal file only
Prepare a written, signed addendum or amendment modifying the clause (Correct answer)
Cross out the clause without initials after signing

Correct answer: Prepare a written, signed addendum or amendment modifying the clause

Changes to a written lease should be documented in a signed addendum to avoid disputes and parol evidence issues.

Question 22: When must a property manager provide a tenant with written notice before entering the rental unit in most US states?

Only when the tenant requests an inspection
7 days in advance for any entry
No notice is required if the manager has a key
24 to 48 hours in advance, except for emergencies (Correct answer)

Correct answer: 24 to 48 hours in advance, except for emergencies

Most states require 24 to 48 hours written notice before a landlord or manager enters a rental unit, with emergency exceptions.

Question 23: Under the 1988 amendments, which multifamily buildings must meet the FHA's accessible design and construction requirements?

Buildings with 4 or more units ready for first occupancy after March 13, 1991 (Correct answer)
All buildings with 2 or more units built after 1968
Only federally funded buildings with 10 or more units
Any building renovated after 1988

Correct answer: Buildings with 4 or more units ready for first occupancy after March 13, 1991

Covered multifamily dwellings are buildings of four or more units first occupied after March 13, 1991.

Question 24: What is the role of documentation in regulatory compliance?

It is only necessary for international operations
It provides verifiable evidence that standards are being met (Correct answer)
It is optional if verbal confirmation is available
It serves no practical purpose beyond record-keeping

Correct answer: It provides verifiable evidence that standards are being met

Documentation provides verifiable evidence that regulatory requirements are being met and creates an audit trail for compliance verification.

Question 25: What should be the first action when a new regulation is enacted that affects your practice?

Delegate review to the newest team member
Wait for enforcement before making changes
Assume existing procedures already comply
Review the regulation, assess its impact, and develop an implementation plan (Correct answer)

Correct answer: Review the regulation, assess its impact, and develop an implementation plan

When new regulations are enacted, professionals should promptly review them, assess their impact on current practices, and develop a structured implementation plan.

Question 26: Which is an example of a reasonable ACCOMMODATION rather than a reasonable modification?

Lowering kitchen countertops
Assigning a reserved parking space near the unit of a tenant with mobility impairment (Correct answer)
Widening a doorway
Installing a ramp at the entrance

Correct answer: Assigning a reserved parking space near the unit of a tenant with mobility impairment

Accommodations change rules, policies, practices, or services, while modifications are physical changes to the premises.

Question 27: Why are regular property inspections important?

To rearrange tenant's furniture
To identify maintenance needs and prevent larger issues (Correct answer)
To take inventory of tenant's possessions
To catch lease violations early

Correct answer: To identify maintenance needs and prevent larger issues

Regular property inspections are crucial for proactively identifying maintenance needs and addressing minor issues before they escalate into larger, more costly problems. They help preserve the property's value, ensure tenant safety, and prevent expensive emergency repairs. Inspections also allow landlords to confirm lease compliance and maintain the property's overall condition.

Question 28: The 2015 Supreme Court case Texas Department of Housing and Community Affairs v. Inclusive Communities Project confirmed what?

Source of income is a federally protected class
Testers lack standing to sue
Disparate impact claims are allowed under the Fair Housing Act (Correct answer)
Private clubs must comply with all FHA provisions

Correct answer: Disparate impact claims are allowed under the Fair Housing Act

The Court held that FHA claims can be based on discriminatory effects without proof of intent.

Question 29: Why do leasing professionals often check references with an applicant's previous landlord in addition to the current landlord?

Previous landlord references replace the need for a credit report
Current landlords cannot disclose payment history
The current landlord may give a favorable reference just to get rid of a problem tenant (Correct answer)
Previous landlords are legally required to answer while current landlords are not

Correct answer: The current landlord may give a favorable reference just to get rid of a problem tenant

A current landlord may have a motive to give a glowing reference to a problem tenant, so a prior landlord's reference is often more objective.

Question 30: Under the RRP Rule, which party must be EPA-certified to perform renovations disturbing lead paint in pre-1978 rentals for compensation?

Only the city building inspector
Only the tenant
No certification is required for landlord-owned properties
The renovation firm, with work directed by a certified renovator (Correct answer)

Correct answer: The renovation firm, with work directed by a certified renovator

Firms must be EPA-certified and use certified renovators, including property management firms doing in-house maintenance.

Question 31: What is a key component of a community's emergency preparedness plan?

Keeping exit doors locked from the inside at night
Storing paint and fuel in stairwells
Posted evacuation routes and clearly marked, unobstructed exits (Correct answer)
Disabling alarms during resident events

Correct answer: Posted evacuation routes and clearly marked, unobstructed exits

Clearly marked, unobstructed exits and posted evacuation routes are essential for resident safety and fire code compliance.

Question 32: A community advertises as 55+ housing under HOPA. What occupancy threshold must it meet?

At least 80% of occupied units have at least one person 55 or older (Correct answer)
100% of units occupied by at least one person 55 or older
At least 50% of residents are 55 or older
All residents must be 62 or older

Correct answer: At least 80% of occupied units have at least one person 55 or older

HOPA 55+ housing requires at least 80% of occupied units to have one resident aged 55 or older, plus published policies and age verification.

Question 33: Which action by a property manager would constitute 'self-help eviction,' which is illegal in all US states?

Requesting a writ of possession from the court
Changing the locks or removing belongings to force a tenant out without a court order (Correct answer)
Filing an unlawful detainer lawsuit after proper notice
Serving a 3-day pay-or-quit notice

Correct answer: Changing the locks or removing belongings to force a tenant out without a court order

Self-help eviction bypasses the court process and is illegal; landlords must use the formal eviction process to remove a tenant.

Question 34: What must a landlord provide to a tenant when imposing an early termination fee under a lease?

A court order authorizing the fee
Clear written disclosure of the fee amount and conditions in the lease agreement (Correct answer)
Verbal notice at least 24 hours before termination
Only a receipt after the fee is collected

Correct answer: Clear written disclosure of the fee amount and conditions in the lease agreement

Early termination fees must be clearly disclosed in writing within the lease so tenants understand the financial consequences before signing.

Question 35: A landlord changes the locks and removes a tenant's belongings without a court order after the tenant falls behind on rent. This is called:

A writ of restitution
A self-help eviction, which is illegal in most states (Correct answer)
Abandonment recovery
A lawful summary possession

Correct answer: A self-help eviction, which is illegal in most states

Most states ban self-help evictions such as lockouts and utility shutoffs, and require landlords to use the court process.

Question 36: How often should compliance procedures be reviewed and updated?

Only when an audit is scheduled
Once at initial certification and never again
Every ten years regardless of changes
Regularly, and whenever regulations change or new risks are identified (Correct answer)

Correct answer: Regularly, and whenever regulations change or new risks are identified

Compliance procedures should be reviewed regularly and updated whenever regulations change, new risks emerge, or organizational changes occur.

Question 37: If a landlord wrongfully withholds a security deposit in violation of state law, what remedy may a tenant seek?

Only the return of the original deposit amount
A rent reduction for the following month
Up to two to three times the deposit amount as a penalty, plus attorney fees (Correct answer)
Filing a complaint with the local zoning board

Correct answer: Up to two to three times the deposit amount as a penalty, plus attorney fees

Many states impose statutory penalties of two to three times the wrongfully withheld amount to deter bad-faith withholding by landlords.

Question 38: Under a typical property management agreement, who is responsible for paying property taxes?

The property owner (Correct answer)
The tenants collectively
The local municipality bills tenants directly
The property manager

Correct answer: The property owner

Property taxes are the financial obligation of the property owner, though the manager may arrange payment from the owner's operating account.

Question 39: Which source of income protection applies under the federal Fair Housing Act?

Housing Choice Voucher holders are a federally protected class
All public assistance recipients are federally protected
Social Security income recipients are federally protected
Source of income is not a federally protected class, though many states and cities protect it (Correct answer)

Correct answer: Source of income is not a federally protected class, though many states and cities protect it

Federal law does not list source of income, but many state and local laws prohibit refusing voucher holders.

Question 40: Applying written screening criteria identically to every applicant primarily protects a leasing office against which claim?

Constructive eviction
Breach of quiet enjoyment
Disparate treatment discrimination (Correct answer)
Retaliatory eviction

Correct answer: Disparate treatment discrimination

Consistent, documented criteria show that every applicant was treated the same, which defends against disparate treatment claims.

Question 41: Which federal law requires landlords to disclose lead-based paint hazards before a tenant signs a lease on a pre-1978 property?

The Real Estate Settlement Procedures Act (RESPA)
The Fair Housing Act
The Americans with Disabilities Act (ADA)
The Residential Lead-Based Paint Hazard Reduction Act (Title X) (Correct answer)

Correct answer: The Residential Lead-Based Paint Hazard Reduction Act (Title X)

Title X requires landlords of pre-1978 housing to disclose known lead-based paint hazards and provide the EPA pamphlet before leasing.

Question 42: What is the most effective way to showcase a rental property's features in online listings?

Using professional photos & virtual tours (Correct answer)
Using technical architectural terms only
Posting low-resolution phone pictures at night
Writing long paragraphs about the neighborhood history

Correct answer: Using professional photos & virtual tours

In online rental listings, high-quality visual content is paramount for attracting prospective tenants. Professional photos and virtual tours effectively showcase a property's features, layout, and condition, allowing potential renters to experience the space remotely. This significantly increases interest and helps properties stand out, leading to faster occupancy.

Question 43: What is the difference between a lease assignment and a sublease?

Only assignments require landlord approval under the law
In an assignment the original tenant transfers all rights to a new tenant; in a sublease the original tenant retains responsibility (Correct answer)
Assignment and sublease are legally identical terms
In a sublease the landlord replaces the original tenant; in an assignment the tenant keeps their rights

Correct answer: In an assignment the original tenant transfers all rights to a new tenant; in a sublease the original tenant retains responsibility

An assignment transfers the tenant's entire interest to a new party, while a sublease creates a new tenancy beneath the original lease, keeping the original tenant liable.

Question 44: Which amendment added familial status and disability (handicap) as protected classes under the federal Fair Housing Act?

Housing and Community Development Act of 1974
Americans with Disabilities Act of 1990
Fair Housing Amendments Act of 1988 (Correct answer)
Rehabilitation Act of 1973

Correct answer: Fair Housing Amendments Act of 1988

The 1988 amendments added familial status and handicap and gave HUD stronger enforcement powers.

Question 45: A borrower pays 2 discount points on a $300,000 loan. How much do the points cost?

$6,000 (Correct answer)
$600
$2,000
$60,000

Correct answer: $6,000

One point equals 1% of the loan amount, so 2 points = $6,000.

Question 46: What is a 'cure or quit' notice?

A notice from the landlord to terminate the tenancy without cause
A request for the tenant to pay overdue utility bills
A notice giving the tenant a chance to fix a lease violation or vacate the property (Correct answer)
A court order requiring immediate eviction

Correct answer: A notice giving the tenant a chance to fix a lease violation or vacate the property

A cure or quit notice gives the tenant a specified timeframe to correct a lease violation (such as unauthorized pets) or face eviction proceedings.

Question 47: What is the maximum security deposit most US states allow for an unfurnished residential unit?

One to two months' rent, depending on state law (Correct answer)
Any amount negotiated between landlord and tenant
No limit; it is entirely at the landlord's discretion
Six months' rent

Correct answer: One to two months' rent, depending on state law

Most states cap security deposits at one to two months' rent for unfurnished units, though exact limits vary by jurisdiction.

Question 48: What does a 'holdover tenancy' occur when?

A tenant vacates before the lease term ends
A tenant remains in the property after the lease expires without signing a renewal (Correct answer)
A landlord holds the tenant's deposit beyond the legal return deadline
A landlord refuses to renew a lease after it expires

Correct answer: A tenant remains in the property after the lease expires without signing a renewal

A holdover tenancy arises when a tenant stays past the lease expiration without a new agreement, often converting to a month-to-month tenancy at the landlord's discretion.

Question 49: Which federal law requires landlords to disclose lead-based paint hazards in properties built before 1978?

Housing and Urban Development Act
Fair Credit Reporting Act
Americans with Disabilities Act
Residential Lead-Based Paint Hazard Reduction Act (Correct answer)

Correct answer: Residential Lead-Based Paint Hazard Reduction Act

The Residential Lead-Based Paint Hazard Reduction Act, also known as Title X, is a federal law specifically designed to protect families from exposure to lead from paint, dust, and soil. It mandates that landlords and sellers of properties built before 1978 disclose any known lead-based paint hazards to prospective tenants or buyers and provide an EPA-approved lead hazard information pamphlet. This ensures informed decision-making regarding potential health risks.

Question 50: What is the consequence of non-compliance with mandatory regulations?

Automatic extension of compliance deadline
Reduced insurance premiums
Penalties including fines, license revocation, and potential legal action (Correct answer)
A verbal warning with no further consequences

Correct answer: Penalties including fines, license revocation, and potential legal action

Non-compliance with mandatory regulations can result in serious consequences including financial penalties, loss of licensure, and legal proceedings.

Question 51: When does a lease automatically convert to a month-to-month tenancy in most US states?

When both parties continue performing under the lease terms after the fixed term expires without signing a renewal (Correct answer)
When the landlord stops collecting rent
When a property is sold to a new owner
When the tenant submits a written request for month-to-month status

Correct answer: When both parties continue performing under the lease terms after the fixed term expires without signing a renewal

If both the landlord and tenant continue the rental relationship after a fixed lease expires without a new agreement, most states treat it as a month-to-month tenancy.

Question 52: Under the Fair Housing Act, which statement about a resident who is a current illegal drug user is correct?

They are not protected as disabled because of current illegal drug use (Correct answer)
They are protected as a person with a disability
They are protected if the drug is legal in their state
They are protected only if they are in treatment

Correct answer: They are not protected as disabled because of current illegal drug use

The FHA excludes current illegal use of controlled substances from its definition of handicap, but people in recovery may be protected.

Question 53: Rising mortgage interest rates typically have what effect on the residential rental market?

Rental demand increases as fewer renters can afford to buy (Correct answer)
There is no effect on rental demand
Vacancy rates rise sharply
Rental demand decreases because landlords raise rents

Correct answer: Rental demand increases as fewer renters can afford to buy

Higher rates reduce homebuying affordability, keeping more households in rentals.

Question 54: Which type of maintenance is performed on a set schedule to prevent equipment failure, such as changing HVAC filters quarterly?

Cosmetic maintenance
Deferred maintenance
Corrective maintenance
Preventive maintenance (Correct answer)

Correct answer: Preventive maintenance

Preventive maintenance is scheduled upkeep designed to avoid breakdowns and extend equipment life.

Question 55: Which statement about the implied warranty of habitability is most accurate?

It requires landlords to keep units fit to live in, and most states do not let tenants waive it (Correct answer)
Tenants can waive it in a lease addendum
It applies only when the lease lists specific repairs
It applies only to buildings with 10 or more units

Correct answer: It requires landlords to keep units fit to live in, and most states do not let tenants waive it

Most jurisdictions recognize a nonwaivable implied warranty that rental units will meet basic health and safety standards.

Question 56: The internal rate of return (IRR) is best defined as the discount rate at which:

NOI equals operating expenses
Net present value of all cash flows equals zero (Correct answer)
Cash flow equals debt service
The property's value doubles

Correct answer: Net present value of all cash flows equals zero

IRR is the rate that makes the present value of inflows equal to the initial investment.

Question 57: The 10-day opportunity to conduct a lead-based paint inspection applies to which transaction?

Residential sales of target housing (Correct answer)
Only public housing leases
Both leases and sales of target housing
Residential leases over 100 days

Correct answer: Residential sales of target housing

The 10-day inspection opportunity is a purchaser's right in sales and does not apply to lessees.

Question 58: An owner lives in one unit of a fourplex and rents the other three without a broker. Under the federal Fair Housing Act, which exemption may apply?

The single-family home exemption
The 'Mrs. Murphy' owner-occupied exemption (Correct answer)
The private club exemption
The housing for older persons exemption

Correct answer: The 'Mrs. Murphy' owner-occupied exemption

Owner-occupied buildings with four or fewer units can be exempt from most FHA provisions, but not from the ban on discriminatory advertising.

Question 59: Which clause in a lease agreement allows the landlord to increase rent during the lease term tied to an index?

Subordination clause
Hold-harmless clause
Right of first refusal clause
Escalation clause (Correct answer)

Correct answer: Escalation clause

An escalation clause permits periodic rent increases based on a benchmark such as the Consumer Price Index (CPI) during the lease term.

Question 60: An applicant is denied an apartment based partly on a consumer credit report. What must the landlord provide under the FCRA?

A copy of the landlord's internal scoring sheet
A refund of all application fees
An adverse action notice with the reporting agency's contact information (Correct answer)
A second application at no cost

Correct answer: An adverse action notice with the reporting agency's contact information

The FCRA requires an adverse action notice that identifies the consumer reporting agency and explains the applicant's rights.

Question 61: Under the NAR Code of Ethics, how often must REALTOR® members complete required Code of Ethics training?

Every year
Once every three-year cycle (Correct answer)
Once every two years
Only upon initial membership

Correct answer: Once every three-year cycle

NAR currently requires Code of Ethics training once per three-year cycle (the cycle running Jan 1, 2025–Dec 31, 2027).

Question 62: A tenant sues over a knowing failure to disclose lead hazards. What civil damages may a court award under federal law?

No damages, only an injunction
Up to three times actual damages (Correct answer)
A fixed $500 penalty
Return of one month's rent only

Correct answer: Up to three times actual damages

Knowing violations can result in liability for treble damages to the injured tenant.

Question 63: Which approach to compliance is considered most effective?

Focusing compliance efforts only on areas that have been cited previously
A proactive approach that integrates compliance into daily operations (Correct answer)
A reactive approach that addresses issues only after violations
Hiring a consultant once a year for a brief review

Correct answer: A proactive approach that integrates compliance into daily operations

A proactive compliance approach that integrates regulatory requirements into daily operations is most effective at preventing violations and maintaining standards.

Question 64: A leasing agent uses a stock photo of a renovated kitchen when the actual unit has an older kitchen. Which article is implicated?

Article 12 – true picture in advertising (Correct answer)
Article 7 – compensation from more than one party
Article 17 – arbitration
Article 9 – written agreements

Correct answer: Article 12 – true picture in advertising

Article 12 requires REALTORS® to present a true picture in advertising and representations.

Question 65: Where must security deposits be held in many US states?

In the landlord's general operating account
In a safe at the rental property
In a separate interest-bearing escrow account (Correct answer)
In the property manager's personal savings account

Correct answer: In a separate interest-bearing escrow account

Many states require security deposits to be held in a dedicated escrow account, separate from operating funds, to protect tenants' money.

Question 66: A property manager wants to increase the likelihood of on-time rent payments. Which strategy is most effective?

Extending the grace period to 30 days
Waiving late fees for all tenants
Offering an online payment portal with automatic reminders (Correct answer)
Requiring cash-only payments delivered in person

Correct answer: Offering an online payment portal with automatic reminders

Online payment portals with automated reminders reduce friction and consistently improve on-time payment rates.

Question 67: Under the federal Fair Housing Act, which of the following is NOT a protected class?

Familial status
National origin
Disability
Source of income (Correct answer)

Correct answer: Source of income

Source of income is protected only under some state and local laws, not under the federal Fair Housing Act.

Question 68: Which ad wording is most likely to violate the Fair Housing Act?

Walking distance to shopping
Perfect for mature adults, no children (Correct answer)
Master bedroom with walk-in closet
Wheelchair-accessible units available

Correct answer: Perfect for mature adults, no children

Stating 'no children' shows a preference based on familial status, while HUD guidance accepts terms like 'master bedroom' and 'walking distance.'

Question 69: What is an estoppel certificate in residential leasing?

A notice of rent increase issued by the landlord
A form used to terminate a lease early
A signed document in which a tenant certifies the lease terms and current status as accurate (Correct answer)
A disclosure required during a property sale

Correct answer: A signed document in which a tenant certifies the lease terms and current status as accurate

An estoppel certificate is a tenant's written confirmation of lease terms, rent amount, and any disputes, often required by lenders or buyers during property transactions.

Question 70: Which rental unit is exempt from the federal Lead-Based Paint Disclosure Rule even though it was built in 1965?

A two-bedroom apartment rented month-to-month
A single-family home leased with an option to buy
A zero-bedroom studio apartment (Correct answer)
A townhouse leased for 12 months to a family with no children

Correct answer: A zero-bedroom studio apartment

Zero-bedroom units such as studios, efficiencies, and dorm rooms are exempt from the federal lead disclosure requirements.

Question 71: Maintenance staff use cleaning chemicals and pool chemicals daily. Which OSHA standard requires Safety Data Sheets and employee training on these products?

Lockout/Tagout Standard
Hazard Communication Standard (Correct answer)
Fall Protection Standard
Bloodborne Pathogens Standard

Correct answer: Hazard Communication Standard

OSHA's Hazard Communication Standard requires labeling, Safety Data Sheets, and training for hazardous chemicals in the workplace.

Question 72: What is a lease addendum?

A written modification or addition to an existing lease agreement (Correct answer)
A court order requiring a tenant to vacate the premises
A document voiding the original lease entirely
A landlord's notice of intent to sell the property

Correct answer: A written modification or addition to an existing lease agreement

A lease addendum is an attached document that modifies, adds to, or clarifies specific terms of the original lease without replacing it.

Question 73: A landlord declines to renew the lease of a tenant who recently filed a fair housing complaint with HUD. Which FHA section is most likely violated?

Section 818, interference, coercion, or retaliation (Correct answer)
Section 807, exemptions
Section 804(c), discriminatory advertising
Section 805, lending discrimination

Correct answer: Section 818, interference, coercion, or retaliation

Section 818 prohibits coercing, intimidating, threatening, or retaliating against anyone exercising fair housing rights.

Question 74: A tenant with a disability needs a live-in aide. The lease limits occupancy to people on the lease. What is the proper response?

Deny the request because the aide is not on the lease
Allow the aide as a reasonable accommodation, subject to reasonable screening (Correct answer)
Require the tenant to move to a larger unit at a higher rent
Require the aide to pay a separate full rent

Correct answer: Allow the aide as a reasonable accommodation, subject to reasonable screening

Permitting a live-in aide is a common reasonable accommodation, and the provider may apply standard screening criteria to the aide.

Question 75: A fourplex sells for $480,000 and collects $60,000 in gross annual rent. What is its gross rent multiplier (GRM)?

12.5
6
8 (Correct answer)
10

Correct answer: 8

GRM = price ÷ gross annual rent = $480,000 ÷ $60,000 = 8.

Question 76: An investor puts $150,000 cash into a property that produces $12,000 in annual pre-tax cash flow. What is the cash-on-cash return?

10.0%
8.0% (Correct answer)
6.0%
12.5%

Correct answer: 8.0%

Cash-on-cash = annual pre-tax cash flow ÷ cash invested = $12,000 ÷ $150,000 = 8%.

Question 77: What is the consequence of non-compliance with mandatory regulations?

Automatic extension of compliance deadline
A verbal warning with no further consequences
Reduced insurance premiums
Penalties including fines, license revocation, and potential legal action (Correct answer)

Correct answer: Penalties including fines, license revocation, and potential legal action

Non-compliance with mandatory regulations can result in serious consequences including financial penalties, loss of licensure, and legal proceedings.

Question 78: Which leasing strategy is most effective at reducing turnover costs?

Requiring month-to-month leases for all residents
Raising renewal rents to the maximum allowed
A proactive renewal program starting 90-120 days before lease expiration (Correct answer)
Waiting for residents to request renewal

Correct answer: A proactive renewal program starting 90-120 days before lease expiration

Contacting residents well before expiration gives time to address concerns and secure renewals, which cost far less than turnover.

Question 79: Within how many days must a landlord typically return a security deposit after a tenant vacates?

60 to 90 days
14 to 30 days, depending on state law (Correct answer)
Immediately upon move-out
6 months

Correct answer: 14 to 30 days, depending on state law

Most states require landlords to return security deposits within 14 to 30 days of move-out, along with an itemized deduction statement if applicable.

Question 80: Which federal law protects survivors of domestic violence from being evicted from HUD-covered housing because of the abuse committed against them?

The Equal Credit Opportunity Act
The Violence Against Women Act (VAWA) (Correct answer)
The Fair Debt Collection Practices Act
The Housing for Older Persons Act

Correct answer: The Violence Against Women Act (VAWA)

VAWA bars covered housing providers from denying or ending assistance or tenancy because a person is a victim of domestic violence, dating violence, sexual assault, or stalking.

Question 81: An AI chatbot on a leasing website answers prospect questions after hours. Which response would create the greatest fair housing risk?

Sharing published rental rates
Scheduling a tour
Providing the community's pet policy
Steering families with children toward a particular building (Correct answer)

Correct answer: Steering families with children toward a particular building

Steering based on familial status violates the Fair Housing Act regardless of whether a human or an automated tool does it.

Question 82: Under the SCRA, when does a lease with monthly rent payments end after proper termination notice is delivered?

Immediately upon delivery
30 days after the next rent due date (Correct answer)
60 days after notice
At the end of the current lease term

Correct answer: 30 days after the next rent due date

For monthly rent leases, termination is effective 30 days after the first date rent is next due after notice.

Question 83: Which fire extinguisher type is most appropriate for general use in apartment common areas?

Class A water only
Multipurpose ABC dry chemical (Correct answer)
Class K wet chemical
Class D dry powder

Correct answer: Multipurpose ABC dry chemical

ABC extinguishers handle ordinary combustibles, flammable liquids, and electrical fires.

Question 84: When conducting a market survey, which property is the most appropriate comparable?

A similar-age, similar-class community in the same submarket (Correct answer)
A commercial office building next door
A single-family home for sale nearby
A luxury high-rise in another city

Correct answer: A similar-age, similar-class community in the same submarket

Valid comps share location, age, class, and unit mix so rent comparisons are meaningful.

Question 85: A market survey shows competitors offering larger concessions while your occupancy is 97% and climbing. What is the most appropriate strategy?

Match competitor concessions immediately
Hold or modestly increase rents while monitoring traffic (Correct answer)
Cut rents across all unit types
Stop all advertising

Correct answer: Hold or modestly increase rents while monitoring traffic

High and rising occupancy indicates strong demand, so matching concessions would needlessly sacrifice revenue.

Question 86: Which of the following is a legally permissible deduction from a tenant's security deposit?

Cleaning a unit left in the same condition as move-in
Repairing damage beyond normal wear and tear (Correct answer)
Repainting walls that have minor scuff marks
Replacing carpet that is 15 years old and fully depreciated

Correct answer: Repairing damage beyond normal wear and tear

Landlords may deduct for damage beyond normal wear and tear, such as large holes in walls or stained carpets caused by tenant negligence.

Question 87: Which document must a landlord provide within 30 days of collecting a security deposit?

A personal thank-you note
Written receipt and deposit disclosure (Correct answer)
List of previous tenants
Copy of the landlord's insurance policy

Correct answer: Written receipt and deposit disclosure

Many states require landlords to provide a written receipt for a security deposit and a disclosure statement within a specific timeframe, often 30 days, after receiving the funds. This disclosure typically includes information about where the deposit is being held (e.g., in an escrow account), the tenant's rights regarding the deposit, and the conditions for its return. This ensures transparency and protects both parties.

Question 88: A landlord advertises a unit as 'perfect for a single professional.' What is the main fair housing risk?

It violates the Americans with Disabilities Act
There is no risk because no protected class is named
It breaks truth-in-advertising rules
It may show a preference based on familial status (Correct answer)

Correct answer: It may show a preference based on familial status

Words that suggest a preference against families with children can violate the FHA's advertising rules on familial status.

Question 89: A tenant provides a 30-day notice to vacate but the lease requires 60 days. What can the landlord do?

Sue the tenant for the full remaining lease term
Hold the tenant responsible for rent through the required 60-day notice period (Correct answer)
Accept the 30-day notice and waive the difference
Immediately release the tenant from all lease obligations

Correct answer: Hold the tenant responsible for rent through the required 60-day notice period

The landlord can hold the tenant to the lease's notice requirement and collect rent for the full notice period specified in the agreement.

Question 90: What is the recommended approach to staying current in Investment Analysis & ROI?

Waiting for regulatory changes to force updates
Regular professional development, industry publications, and peer collaboration (Correct answer)
Relying solely on past experience
Reviewing initial training materials once per year

Correct answer: Regular professional development, industry publications, and peer collaboration

Staying current in Investment Analysis & ROI requires ongoing professional development, reading industry publications, and collaborating with peers to share knowledge and best practices.

Question 91: What is 'normal wear and tear' in the context of a residential lease?

Stains and holes that require professional repair
Any damage caused by the tenant regardless of severity
Damage resulting from a tenant's pets or children
Gradual deterioration from ordinary use, such as minor scuffs and faded paint (Correct answer)

Correct answer: Gradual deterioration from ordinary use, such as minor scuffs and faded paint

Normal wear and tear refers to expected, minor deterioration from everyday living that a landlord cannot charge to the tenant.

Question 92: A leasing agent finishes a tour and the prospect seems interested but undecided. What is the best next step?

Offer an unauthorized concession
Tell the prospect units are unlimited
Let the prospect leave without further discussion
Ask for the application or a commitment, such as a holding deposit (Correct answer)

Correct answer: Ask for the application or a commitment, such as a holding deposit

Closing means directly asking for the commitment while interest is high, within approved policy.

Question 93: What information must an itemized security deposit deduction statement include?

The tenant's credit score and payment history
Only the total amount withheld without detail
A specific description of each deduction, the cost, and receipts or invoices where applicable (Correct answer)
The landlord's estimate of the property's future market value

Correct answer: A specific description of each deduction, the cost, and receipts or invoices where applicable

Most states require landlords to provide detailed itemization with descriptions, costs, and supporting documentation for each deduction from the security deposit.

Question 94: Where should carbon monoxide alarms be placed in a unit with fuel-burning appliances?

Only in the garage
Inside the furnace closet only
Outside each sleeping area and on every level (Correct answer)
Only in the kitchen near the stove

Correct answer: Outside each sleeping area and on every level

CO alarms belong outside each sleeping area and on every level so occupants are alerted while asleep.

Question 95: How often does NFPA recommend testing residential smoke alarms?

Annually
Every six months
Monthly (Correct answer)
Weekly

Correct answer: Monthly

NFPA recommends testing smoke alarms at least once a month.

Question 96: In rental property analysis, 'equity build-up' from financing primarily refers to:

Rent collected in advance
Interest paid on the mortgage
Security deposits held in trust
The portion of loan payments that reduces principal (Correct answer)

Correct answer: The portion of loan payments that reduces principal

Each amortizing payment reduces principal, increasing the owner's equity.

Question 97: Which security measure best protects a leasing office's online portal from stolen-password attacks?

A larger monitor for staff
Multi-factor authentication (Correct answer)
Longer office hours
Daily printing of rent rolls

Correct answer: Multi-factor authentication

MFA requires a second verification factor, so a stolen password alone cannot grant access.

Question 98: A resident reports a musty odor and a water stain from a slow leak under the sink. What is the most important first step in mold prevention?

Paint over the stain with mold-resistant paint
Order air sampling before any repair
Apply bleach and leave the area damp to soak
Fix the leak and dry wet materials within 24-48 hours (Correct answer)

Correct answer: Fix the leak and dry wet materials within 24-48 hours

Mold control depends on eliminating the moisture source and drying materials within 24-48 hours.

Question 99: Which statement about VAWA protections is correct?

They apply only to male victims
They apply to covered federally assisted housing programs (Correct answer)
They apply only to public housing in large cities
They apply to all private market rentals nationwide

Correct answer: They apply to covered federally assisted housing programs

VAWA housing protections apply to covered federal housing programs such as public housing and Housing Choice Vouchers.

Question 100: Which item should be included in a property's emergency preparedness plan?

Advertising budgets
Rent concession schedules
Resident birthday lists
Evacuation routes, emergency contacts, and utility shutoff locations (Correct answer)

Correct answer: Evacuation routes, emergency contacts, and utility shutoff locations

Emergency plans should provide evacuation routes, contacts, and shutoff locations to respond quickly to disasters.

Question 101: A duplex has NOI of $36,000 and a monthly mortgage payment of $2,400. What is its annual cash flow before taxes?

$28,800
$7,200 (Correct answer)
$12,000
$33,600

Correct answer: $7,200

Annual debt service is $28,800, so cash flow = $36,000 − $28,800 = $7,200.

Certified Residential Leasing Specialist (CRLS)

The CRLS certifies proficiency in residential leasing operations, fair housing compliance, lease administration, property management, and investment fundamentals for leasing professionals.

100

Questions

120 min

Time Limit

70%

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