PSI Licensing Laws and Regulations 2 — Questions and Answers
Question 1: A real estate licensee moves to a new address. Under most state licensing laws, within how many days must the licensee notify the state licensing board?
- 30 days (Correct answer)
- 60 days
- 90 days
- 10 days
Correct answer: 30 days
Most states require licensees to notify the licensing board of an address change within 30 days.
Question 2: Which of the following acts would most likely result in license revocation rather than suspension?
- Failing to disclose a material defect knowingly (Correct answer)
- Missing a continuing education deadline
- Failing to update a business address
- Advertising without the broker's name
Correct answer: Failing to disclose a material defect knowingly
Knowingly concealing a material defect is fraud, which typically warrants revocation rather than a lesser penalty.
Question 3: A salesperson who has passed the licensing exam but has not yet affiliated with a broker may:
- Not practice real estate in any capacity (Correct answer)
- Show properties on behalf of a friend who is licensed
- Accept referral fees from other licensees
- Represent buyers in transactions under supervision
Correct answer: Not practice real estate in any capacity
A salesperson's license is not activated until they are affiliated with a sponsoring broker, prohibiting any real estate practice.
Question 4: Which of the following best describes 'reciprocity' in real estate licensing?
- An agreement allowing licensees from one state to obtain licensure in another without full re-examination (Correct answer)
- A requirement that brokers share commissions equally
- A rule that both parties in a transaction use the same agency
- A policy requiring continuing education in multiple states
Correct answer: An agreement allowing licensees from one state to obtain licensure in another without full re-examination
Reciprocity allows out-of-state licensees to gain licensure in a new state, often waiving some or all examination requirements.
Question 5: A real estate licensee is convicted of a felony. The licensing board is most likely to:
- Revoke or suspend the license based on the nature of the crime (Correct answer)
- Automatically revoke the license for any felony conviction
- Take no action unless the crime is related to real estate
- Require only additional continuing education as a remedy
Correct answer: Revoke or suspend the license based on the nature of the crime
Most boards evaluate felony convictions on a case-by-case basis, with revocation or suspension depending on the nature and severity of the crime.
Question 6: Under the license law, an unlicensed assistant may legally:
- Schedule appointments and perform clerical tasks (Correct answer)
- Host open houses and answer questions about property features
- Negotiate commission rates with clients
- Prepare and present offers to purchase
Correct answer: Schedule appointments and perform clerical tasks
Unlicensed assistants may perform administrative and clerical tasks but may not engage in activities requiring a license.
Question 7: A broker's license is automatically revoked in most states if the broker:
- Fails to maintain errors and omissions insurance as required by state law
- Has no active salesperson affiliated with them for six months
- Does not renew within the grace period after expiration (Correct answer)
- Closes their principal office without notifying the board
Correct answer: Does not renew within the grace period after expiration
Operating on an expired license after the grace period has elapsed typically results in automatic revocation in most states.
PSI Licensing Laws and Regulations 2
A real estate licensee moves to a new address.
Under most state licensing laws, within how many days must the licensee notify the state licensing board?