NY Real Estate Exam Content 2 — Questions and Answers
Question 1: Under New York law, a buyer's agent who also represents the seller in the same transaction must obtain what?
- Verbal consent from both parties
- Written informed consent from both parties (Correct answer)
- Approval from the Department of State
- A dual-agency license endorsement
Correct answer: Written informed consent from both parties
New York requires written informed consent from both the buyer and seller before a licensee may act as a dual agent.
Question 2: Which of the following disclosures is a New York licensee required to give a prospective buyer at the first substantive contact?
- Lead paint disclosure
- Agency disclosure form (Correct answer)
- Property condition disclosure statement
- Environmental hazard pamphlet
Correct answer: Agency disclosure form
NY Real Property Law §443 requires the agency disclosure form to be presented at the first substantive contact with a prospective buyer or seller.
Question 3: A listing agreement in New York that automatically renews itself unless cancelled is called a/an:
- Open listing
- Exclusive right-to-sell listing
- Evergreen clause listing (Correct answer)
- Net listing
Correct answer: Evergreen clause listing
An evergreen clause causes a listing agreement to automatically renew for additional periods unless either party provides timely notice of cancellation.
Question 4: A seller in New York accepts an offer but the buyer fails to close because financing fell through. The seller keeps the earnest money. This deposit is legally known as:
- Liquidated damages (Correct answer)
- Punitive damages
- Consequential damages
- Nominal damages
Correct answer: Liquidated damages
Earnest money retained by the seller upon buyer default is treated as liquidated damages, a pre-agreed remedy set forth in the contract.
Question 5: Under the New York Property Condition Disclosure Act, what is the financial penalty a seller may pay instead of completing the disclosure statement?
- $250
- $500 (Correct answer)
- $1,000
- $2,500
Correct answer: $500
A seller who fails to deliver the required Property Condition Disclosure Statement must give the buyer a $500 credit at closing.
Question 6: A real estate salesperson in New York who negotiates a deal independently, without the knowledge of their sponsoring broker, has violated which duty?
- Duty of loyalty to the client
- Duty to supervise licensees
- Duty to account for funds
- Duty to act within the scope of authority granted by the broker (Correct answer)
Correct answer: Duty to act within the scope of authority granted by the broker
A salesperson must act within the authority granted by the sponsoring broker and cannot conduct real estate activities outside that supervisory relationship.
Question 7: In New York, the transfer of a leasehold interest from the original tenant to a third party for the entire remaining lease term is called a/an:
- Sublease
- Assignment (Correct answer)
- Novation
- Assumption
Correct answer: Assignment
An assignment transfers the tenant's entire remaining interest in the lease to a new party, making the assignee directly responsible to the landlord.
NY Real Estate Exam Content 2
Under New York law, a buyer's agent who also represents the seller in the same transaction must obtain what?