General Practice Flashcards

Under the Alquist-Priolo Special Studies Act, a subdivider is required to disclose to potential purchasers:

Answer: earthquake fault lines

The Alquist-Priolo Special Studies Act (now Earthquake Fault Zoning Act) is a California state law specifically designed to prevent construction of buildings for human occupancy across active earthquake faults. It mandates that subdividers disclose to potential purchasers if a property is located within an earthquake fault zone. This disclosure focuses on the proximity to active fault lines, not general environmental or flood issues.

Under no circumstances may a real estate broker misrepresent a material fact to a buyer. If they do, the broker faces:

Answer: Any of the above.

A real estate broker who intentionally misrepresents a material fact to a buyer can face severe repercussions from multiple authorities. They may be subject to disciplinary action by the California Bureau of Real Estate (CalBRE), including license suspension or revocation. Additionally, they can face civil lawsuits from the aggrieved buyer for damages and, in egregious cases, criminal charges for fraud.

It is least likely to be a violation of the Real Estate Law for a broker to pay a portion of the commission to a(n):

Answer: buyer or seller in the transaction.

Paying a portion of a commission to an unlicensed person who is not a principal in the transaction is generally a violation of real estate law. However, a broker can legally pay a portion of their commission directly to the buyer or seller in the transaction, often as a rebate or credit, provided it is fully disclosed to all parties. This practice is typically seen as a reduction in the overall transaction cost for the principal.

A Natural Hazard Disclosure Statement (NHD) needs to be given to a buyer when a natural hazard exists. Which of the following does not trigger delivery of an NHD?

Answer: A property that contains lead-based paint.

The Natural Hazard Disclosure Statement (NHD) is specifically required for properties located in designated natural hazard zones, such as earthquake fault zones, seismic hazard zones, flood hazard areas, and very high fire hazard severity zones. Lead-based paint, while a serious environmental hazard requiring its own federal disclosure, is not considered a 'natural hazard' under the NHD requirements.

Earthquake fault zones need to be disclosed to prospective buyers of certain properties in California. Typically, earthquake fault zones are:

Answer: 0.25 miles wide.

Under California's Alquist-Priolo Earthquake Fault Zoning Act, regulatory zones are established along active faults to mitigate earthquake hazards. These zones are typically 1/4 mile (0.25 miles) wide, extending 1/8 mile on either side of the identified fault trace. This specific width determines which properties require special disclosure and geological investigation before development.

A verbal agreement to sell real estate is enforceable when:

Answer: the buyer makes a down payment, takes possession and improves the property

While real estate contracts generally must be in writing under the Statute of Frauds, an exception exists through the doctrine of part performance. A verbal agreement to sell real estate can become enforceable if the buyer takes significant actions like making a down payment, taking possession of the property, and making substantial improvements. These actions demonstrate a clear intent and reliance on the agreement.

Discriminatory acts in the sale or rental of residential housing accommodations based on sex, religion or national origin of the prospective tenant or buyer are:

Answer: Any of the above

Discriminatory acts in housing based on protected characteristics like sex, religion, or national origin are explicitly prohibited by federal and state fair housing laws, such as the Civil Rights Act of 1968 and California's Fair Employment and Housing Act. Such actions are therefore illegal, unenforceable in court, and fundamentally contrary to public policy, which aims to ensure equal housing opportunities for all.

Which of the following state agencies is empowered to prevent acts of discrimination in housing accommodations in California due to race, color, sex, national origin or ancestry

Answer: the Department of Fair Employment and Housing.

In California, the Department of Fair Employment and Housing (DFEH), now known as the Civil Rights Department (CRD), is the state agency responsible for enforcing civil rights laws, including those related to housing discrimination. It investigates complaints of discrimination based on protected characteristics like race, color, sex, national origin, or ancestry, and works to prevent unlawful discriminatory practices.

A Latino real estate agent working in a Hispanic neighborhood informed current owners they should move out because another ethnic group is moving into the area. This conduct is an example of all of the following, except:

Answer: a legal practice, but unethical.

The described conduct, where an agent induces owners to sell by creating fear about a new ethnic group moving into the area, is a classic example of 'blockbusting' or 'panic selling.' This practice is explicitly illegal under federal and state fair housing laws because it exploits racial fears for financial gain. Therefore, it is an illegal practice, not merely unethical but legal.

An agreement between two parties in which one party is granted the right to offer, sell, or distribute goods or services under a marketing plan described by the other party is commonly known as:

Answer: a franchise agreement.

A franchise agreement is a contractual arrangement where a franchisor grants a franchisee the right to use its trademark, business model, and proprietary knowledge to offer goods or services. The franchisee operates under the franchisor's established marketing plan and system, typically in exchange for fees and royalties. This definition precisely matches the description provided.

A broker chooses to employ their salespeople as independent contractors rather than employees. By doing so, the broker will save out of pocket expenses relating to:

Answer: social security

When a broker classifies their salespeople as independent contractors instead of employees, they avoid paying certain employer-related expenses. This includes the employer's share of Social Security (FICA) and Medicare taxes, as well as unemployment insurance and workers' compensation. Independent contractors are responsible for their own self-employment taxes and benefits, leading to cost savings for the broker.

When inspecting a residence in a hillside subdivision, the salesperson observes cracks in the foundation and notices the doors and windows do not close properly. As a matter of best practice, the salesperson references their observations in the Transfer Disclosure Statement (TDS) and recommends that which of the following be ordered?

Answer: A soil engineer’s inspection.

Cracks in the foundation and misaligned doors/windows, particularly in a hillside subdivision, are significant indicators of potential structural instability or soil settlement issues. A soil engineer's inspection is specifically designed to assess the underlying soil conditions, identify potential geological hazards, and evaluate the structural integrity of the property. This specialized inspection is crucial for addressing such serious concerns.

The maximum security deposit for a furnished apartment is:

Answer: three months’ rent

In California, state law limits the amount a landlord can charge for a security deposit. For an unfurnished residential property, the maximum security deposit is two months' rent. However, for a furnished residential property, the maximum allowed security deposit is three months' rent, accounting for the additional value and potential wear and tear on the furnishings.

An investor made a $40,000 down payment on a $400,000 condominium. One year later, the property increased 10% in value. This resulted in a $40,000 or 100% gain on the $40,000 equity. This is an example of:

Answer: leverage.

Leverage in real estate refers to the use of borrowed capital (like a mortgage) to finance an investment, thereby amplifying the potential return on the investor's initial equity. In this example, a relatively small down payment controlled a much larger asset. The property's appreciation resulted in a significantly higher percentage gain on the investor's equity than on the total property value, demonstrating the power of leverage.

. The purpose of a(n)________ , like an easement and a lease, is to grant the right to use property owned by another person.

Answer: license

A license is a personal, revocable, and non-assignable privilege to do a particular act on another's land without possessing any estate or interest in the land itself. Like an easement or a lease, it grants permission to use someone else's property. However, a license is generally more temporary and less formal than an easement and does not convey an ownership interest like a lease.

Roy, an inactive real estate salesperson, offers to assist Mel lease or purchase federal land for a fee.

Answer: Roy must be a broker to perform these duties and collect a fee

In California, anyone who, for compensation, assists another in the lease or purchase of real property, including federal land, must hold an active real estate broker's license. An inactive real estate salesperson cannot legally perform licensed activities, and a salesperson must always operate under the supervision of an employing broker. Therefore, Roy needs an active broker's license to perform these duties for a fee.

After an applicant passes the real estate licensing exam, they need to apply for a license within:

Answer: one year of the examination.

In California, after successfully passing the real estate licensing exam, an applicant has a specific timeframe to submit their license application. The application, along with all required fees and documentation, must be submitted to the California Bureau of Real Estate (CalBRE) within one year from the date the examination was passed. Failure to meet this deadline will require the applicant to retake and pass the exam again.

Which of the following is an example of “puffing”:

Answer: exaggerating certain features or benefits of a property.

Puffing refers to extravagant claims or opinions made by a real estate agent that are not intended to be taken as factual representations. It involves exaggerating the positive features or benefits of a property, such as describing a small yard as 'spacious' or a view as 'breathtaking.' While generally permissible if clearly an opinion, it can become problematic if it crosses into factual misrepresentation.

It is appropriate for real property managers to be compensated in all of the following ways, except:

Answer: receiving kickbacks from contractors and suppliers.

Property managers can legitimately be compensated through various methods, such as commissions for new tenants, a percentage of gross rents, or additional fees for supervising renovations. However, receiving undisclosed kickbacks or secret profits from contractors, suppliers, or other third parties is unethical and illegal. Such actions constitute a conflict of interest and a breach of fiduciary duty to the property owner.

Who is authorized to manage property for the general public?

Answer: A licensed real estate broker.

In California, managing property for others for compensation, which includes activities like collecting rents, negotiating leases, and overseeing maintenance, falls under the definition of real estate activity. Therefore, anyone performing these services for the general public must hold a valid and active real estate broker's license. A salesperson can manage property, but only under the direct supervision of their employing broker.