Real Estate Sales Exam Fair Housing and Disclosures 4 — Questions and Answers
Question 1: A landlord requires all tenants to speak English fluently as a condition of tenancy. This policy most likely violates the Fair Housing Act's prohibition on discrimination based on:
- Color
- Familial status
- National origin (Correct answer)
- Religion
Correct answer: National origin
Language requirements that disproportionately affect certain national origin groups can constitute illegal discrimination under the Fair Housing Act.
Question 2: Under the Lead-Based Paint Disclosure rule, sellers of homes built before 1978 must:
- Remove all lead paint before listing
- Provide buyers with a disclosure form and EPA pamphlet and allow 10 days for inspection (Correct answer)
- Warrant that the home is lead-free
- Disclose only if lead paint is visible
Correct answer: Provide buyers with a disclosure form and EPA pamphlet and allow 10 days for inspection
Federal law requires sellers of pre-1978 homes to disclose known lead hazards, provide an EPA pamphlet, and give buyers a 10-day inspection period.
Question 3: Which agency primarily enforces the federal Fair Housing Act?
- Federal Trade Commission (FTC)
- Consumer Financial Protection Bureau (CFPB)
- Department of Housing and Urban Development (HUD) (Correct answer)
- Department of Justice (DOJ) exclusively
Correct answer: Department of Housing and Urban Development (HUD)
HUD is the primary federal agency responsible for enforcing the Fair Housing Act, though the DOJ can also bring cases.
Question 4: A seller instructs an agent not to disclose that the home's furnace is at end of life and needs replacement. The agent should:
- Follow the seller's instructions to protect the client relationship
- Disclose the defect to buyers because it is a material fact (Correct answer)
- Only disclose if a buyer specifically asks about the furnace
- Disclose only after an offer is accepted
Correct answer: Disclose the defect to buyers because it is a material fact
Agents have a duty to disclose known material defects to buyers regardless of seller instructions to conceal them.
Question 5: Redlining refers to the practice of:
- Marking boundaries on maps to exclude racial minorities from obtaining mortgages in certain areas (Correct answer)
- Directing minority buyers to specific neighborhoods
- Charging higher prices to minority buyers
- Refusing to rent to families with children
Correct answer: Marking boundaries on maps to exclude racial minorities from obtaining mortgages in certain areas
Redlining is the illegal practice of refusing loans or insurance to people in certain areas, often based on the racial composition of those neighborhoods.
Question 6: A buyer's agent discovers that the listing agent failed to disclose a known roof defect. The buyer's agent should:
- Ignore it since it was the listing agent's responsibility
- Inform the buyer of the known defect immediately (Correct answer)
- Only mention it if the buyer asks about the roof
- Report the defect to the listing agent and trust them to handle it
Correct answer: Inform the buyer of the known defect immediately
Buyer's agents have a fiduciary duty to inform their clients of all known material facts, even if the listing agent failed to disclose them.
Question 7: The Integrated Disclosure rule (TRID) replaced which two forms?
- The HUD-1 and Good Faith Estimate (GFE) (Correct answer)
- The appraisal report and inspection report
- The purchase agreement and closing statement
- The mortgage note and deed of trust
Correct answer: The HUD-1 and Good Faith Estimate (GFE)
TRID replaced the HUD-1 Settlement Statement and Good Faith Estimate with the Closing Disclosure and Loan Estimate forms.
Real Estate Sales Exam Fair Housing and Disclosures 4
A landlord requires all tenants to speak English fluently as a condition of tenancy.
This policy most likely violates the Fair Housing Act's prohibition on discrimination based on: