Practice Questions Flashcards

A real estate broker receives a security deposit from a tenant. Where must these funds be held?

Answer: A separate escrow or trust account

Security deposits and client funds must be kept in a separate trust or escrow account to prevent commingling with the broker's own funds.

Under the Fair Housing Act, which of the following is NOT a protected class at the federal level?

Answer: Source of income

Source of income is not a federally protected class under the Fair Housing Act, though some states and localities have added it.

A licensee acting as a dual agent must:

Answer: Obtain informed written consent from both buyer and seller

Dual agency requires informed written consent from both parties because the agent cannot fully advocate for either side.

What is the primary purpose of a title search?

Answer: To uncover liens, encumbrances, or defects in the chain of title

A title search examines public records to identify any outstanding claims, liens, or ownership gaps that could affect the buyer's ownership.

An easement appurtenant benefits:

Answer: The adjoining dominant estate

An easement appurtenant is attached to and runs with the dominant estate, benefiting the land rather than a specific person.

A property with a legal nonconforming use may continue operating because:

Answer: The use existed before the current zoning ordinance was enacted

A grandfathered nonconforming use is one that lawfully existed prior to the adoption of a zoning ordinance that would otherwise prohibit it.

Which formula correctly calculates the capitalization rate (cap rate) for an income-producing property?

Answer: NOI ÷ Purchase Price

The cap rate equals Net Operating Income divided by the property's value or purchase price, expressed as a percentage.