Florida Real Estate Sales Associate License, Practice Exams

A commercial tenancy at will runs from year to year. How much notice ends it?

1. Not less than 60 days before the end of an annual period
2. Not less than 45 days before the end of an annual period
3. Not less than 6 months before the end of an annual period
4. Not less than 3 months before the end of an annual period ✓

Why: Section 83.03(1) requires, WHERE THE TENANCY IS FROM YEAR TO YEAR, BY GIVING NOT LESS THAN 3 MONTHS' NOTICE PRIOR TO THE END OF ANY ANNUAL PERIOD; a quarter-to-quarter tenancy needs 45 days. The residential year-to-year figure in 83.57 is 60 days.

Which characteristic of real estate subjects a parcel to the influence of its surroundings?

1. Transferability
2. Fixity of location ✓
3. Principle of change
4. Conformity

Why: Reference Book chapter 27 defines fixity of location as the physical characteristic of real estate that subjects it to the influence of its surroundings. Because land cannot be moved, what happens around it affects its value.

A seller set a decorative fountain into the patio in poured cement. The purchase contract says nothing about it. How is the fountain most likely treated?

1. As the seller's personal property
2. As a fixture that passes to the buyer ✓
3. As property the seller may keep by bill of sale
4. As an appurtenance of the neighbor's lot

Why: Reference Book chapter 4 says the degree of permanence of the annexation is significant, and an item attached by cement and plaster is likely to be a fixture. Buyers may assume that what is attached to the land passes with it, so a seller who wants to keep such an item must except it in the contract.

A deed purports to create an estate tail. What does Florida law make of it?

1. A fee simple absolute in the first taker.
2. A valid estate tail, passing only to lineal heirs.
3. Life estate, remainder to lineal descendants. ✓
4. A void grant, so the land reverts to the grantor.

Why: Section 689.14 provides that NO PROPERTY, REAL OR PERSONAL, SHALL BE ENTAILED IN THIS STATE, and that an instrument purporting to create an estate tail SHALL BE DEEMED TO CREATE AN ESTATE FOR LIFE IN THE FIRST TAKER WITH REMAINDER PER STIRPES TO THE LINEAL DESCENDANTS of the first taker in being at his or her death.

A homestead owner moves out in March and rents the whole house to a tenant for the rest of the year. It has never been rented before. What happens to that year's homestead exemption?

1. It stays for that year, since the rental began after January 1. ✓
2. It is lost for that year, because the rental lasted over 30 days.
3. It is prorated to the months before the tenant moved into the home.
4. It stays, but only if the rent charged is below market rent.

Why: Section 196.061(1), F.S.: renting all or substantially all of a homestead SHALL CONSTITUTE THE ABANDONMENT OF SUCH DWELLING AS A HOMESTEAD, but SUCH ABANDONMENT OF THE HOMESTEAD AFTER JANUARY 1 OF ANY YEAR DOES NOT AFFECT THE HOMESTEAD EXEMPTION FOR TAX PURPOSES FOR THAT PARTICULAR YEAR UNLESS THE PROPERTY IS RENTED FOR MORE THAN 30 DAYS PER CALENDAR YEAR FOR 2 CONSECUTIVE YEARS. This is the first year of renting.

A sales associate opens her own escrow account at a Florida bank and deposits a buyer's earnest money check in it. What is wrong with this?

1. Nothing, as the bank is in and doing business in Florida.
2. The account had to be held at a title company, not a bank.
3. She had to place the funds with her registered employer. ✓
4. She needed the buyer's written consent to use that account.

Why: Section 475.25(1)(k), F.S.: a licensee may be disciplined who HAS FAILED, IF A SALES ASSOCIATE, TO IMMEDIATELY PLACE WITH HER OR HIS REGISTERED EMPLOYER ANY MONEY, FUND, DEPOSIT, CHECK, OR DRAFT ENTRUSTED TO HER OR HIM. Only the broker maintains the escrow account; the associate's duty is to hand funds to the employer.

Where a trade association's code of ethics and the law conflict, which governs a licensee's conduct?

1. The code, since it sets the higher standard.
2. Whichever the local association board picks.
3. Whichever rule the client prefers in writing.
4. The obligations of the law take precedence. ✓

Why: DRE Reference Book ch. 19: codes of ethics establish OBLIGATIONS THAT MAY BE HIGHER THAN THOSE MANDATED BY LAW. IN ANY INSTANCE WHERE THE CODE OF ETHICS AND THE LAW CONFLICT, THE OBLIGATIONS OF THE LAW TAKE PRECEDENCE.

A triangular lot has a 300-foot base and a height of 200 feet. It sells for $3 per square foot. What is the price?

1. $10,000
2. $45,000
3. $90,000 ✓
4. $180,000

Why: Reference Book chapter 26: area of a triangle = base x 1/2 height, so 300 x 100 = 30,000 square feet, and 30,000 x $3 = $90,000. Leaving out the half gives $180,000; halving both dimensions gives $45,000; dividing the area by the price instead of multiplying gives $10,000.

An appraiser has identified the client, the intended use, the type of value, the effective date, the property's relevant characteristics and the assignment conditions. What comes next in the process?

1. Determining the scope of work needed. ✓
2. Reconciling the indications of value.
3. Applying the cost and income approaches.
4. Reporting the value under Standard 2.

Why: Reference Book chapter 15: once the appraisal problem is defined, Standard 1's next step is to "determine the scope of work necessary to solve the appraisal problem," followed by data collection and analysis, application of the approaches, and reconciliation. Reporting is the separate final step covered by Standard 2.

A landlord turns away a family of seven for a two-bedroom unit, citing a reasonable local ordinance limiting the number of occupants. Does the Fair Housing Act forbid this?

1. Yes; any refusal of a family is familial status bias.
2. Yes, unless the landlord offers a larger unit.
3. No; reasonable local occupancy limits still apply. ✓
4. No, but only if the family has no children.

Why: 42 U.S.C. 3607(b)(1): NOTHING IN THIS SUBCHAPTER LIMITS THE APPLICABILITY OF ANY REASONABLE LOCAL, STATE, OR FEDERAL RESTRICTIONS REGARDING THE MAXIMUM NUMBER OF OCCUPANTS PERMITTED TO OCCUPY A DWELLING.

In early English common law, what did the word property refer to?

1. The owner's rights in a thing, such as to use and transfer it. ✓
2. The physical land itself, apart from any buildings upon it.
3. Only movable goods, as distinct from land and its buildings.
4. The tax value a lord assigned to land held by his tenants.

Why: DRE Reference Book ch. 4: in English Common Law THE WORD PROPERTY REFERRED NOT TO THE THING OWNED, BUT RATHER TO THE RIGHTS WHICH THE OWNER HAD: THE RIGHTS TO POSSESS, USE, ENCUMBER, TRANSFER AND EXCLUDE OTHERS. Only the modern view treats property as the thing owned.

A new owner says the tax collector's bill never reached her, so her unpaid property taxes should not be treated as delinquent after March 31. How does Florida law treat her claim?

1. The taxes are not delinquent until a bill is actually delivered.
2. The taxes are waived for the year unless she was billed twice.
3. She is held to know taxes are due and must pay them anyway. ✓
4. The delinquency date moves to 30 days after a bill is re-mailed.

Why: Section 197.122(1), F.S.: AN ACT OF OMISSION OR COMMISSION ON THE PART OF A PROPERTY APPRAISER, TAX COLLECTOR, ... DOES NOT DEFEAT THE PAYMENT OF TAXES ... ALL OWNERS OF PROPERTY ARE HELD TO KNOW THAT TAXES ARE DUE AND PAYABLE ANNUALLY AND ARE RESPONSIBLE FOR ASCERTAINING THE AMOUNT OF CURRENT AND DELINQUENT TAXES AND PAYING THEM BEFORE APRIL 1 OF THE YEAR FOLLOWING THE YEAR IN WHICH TAXES ARE ASSESSED. A missing bill is no defense.

What is the preliminary report (the commitment or binder) that a title insurer issues before closing?

1. A warranty by the insurer that the title is as it describes.
2. An abstract of every recorded instrument in the chain.
3. A final policy that takes effect on the date it is issued.
4. An offer to issue a policy subject to the stated exceptions. ✓

Why: DRE Reference Book ch. 5: SUCH REPORTS ARE OFFERS TO ISSUE A TITLE POLICY SUBJECT TO THE STATED EXCEPTIONS ... PRELIMINARY REPORTS ARE NOT ABSTRACTS OF TITLE ... NOR CONSTITUTE A REPRESENTATION AS TO THE CONDITION OF TITLE. They state the terms on which the insurer will issue its policy.

A dominant brokerage, acting alone, schemes to drive every competitor out of a town so that it will control the whole local market. Which provision most directly addresses this?

1. Sherman Act section 1, which needs no agreement among firms.
2. Clayton Act section 3, which bars all tying of real estate services.
3. RESPA section 8, which bars any payments that are made for referrals.
4. Sherman Act section 2, which bars monopolizing or attempting to. ✓

Why: 15 U.S.C. 2: EVERY PERSON WHO SHALL MONOPOLIZE, OR ATTEMPT TO MONOPOLIZE ... ANY PART OF THE TRADE OR COMMERCE AMONG THE SEVERAL STATES ... SHALL BE DEEMED GUILTY OF A FELONY. Section 1 (15 U.S.C. 1) reaches a CONTRACT, COMBINATION ... OR CONSPIRACY, which one firm acting alone does not form.

An office tower would be the most profitable use a site could physically support, but the zoning allows only single-family homes. Which highest and best use test does the tower fail?

1. Legally permissible. ✓
2. Physically possible.
3. Economically feasible.
4. Most productive use.

Why: Reference Book chapter 15 gives the four tests: the use must be (1) legally permissible, (2) physically possible, (3) economically feasible and (4) the most productive use. The site can hold the tower and it would be profitable, but zoning forbids it, so it fails the first test and cannot be the highest and best use.

How does the commission's rule define an economic hardship for reactivation education?

1. Household income below the federal poverty guideline.
2. Being unable to meet reasonable basic living expenses. ✓
3. Earning less in a year than the cost of the course.
4. Owing debts that exceed the licensee's yearly gross income.

Why: Rule 61J2-3.013(3), F.A.C.: an economic hardship is defined as the inability to meet REASONABLE BASIC LIVING EXPENSES. Subsection (2) lists as hardships for reactivation education A LICENSEE’S LONG TERM ILLNESS OR AN ILLNESS INVOLVING A CLOSE RELATIVE, a course that IS NOT REASONABLY AVAILABLE, and AN ECONOMIC OR TECHNOLOGICAL HARDSHIP; the request must be made IN WRITING.

A buyer asks a transaction broker, who also works with the seller, why the seller is moving. The seller has not waived confidentiality. What should the broker do?

1. Decline; motivation is covered by limited confidentiality. ✓
2. Answer, because only price information is kept confidential.
3. Answer, as a transaction broker owes full disclosure to both parties.
4. Decline, unless the buyer puts the question in writing.

Why: Section 475.278(2)(f) provides that limited confidentiality, UNLESS WAIVED IN WRITING BY A PARTY, prevents disclosure OF THE MOTIVATION OF ANY PARTY FOR SELLING OR BUYING PROPERTY, as well as price and financing matters. Full disclosure is a single agent duty, not one a transaction broker owes.

Which of these is NOT one of the essential elements of a contract?

1. Recording in the public records. ✓
2. Parties capable of contracting.
3. Mutual consent.
4. Sufficient consideration.

Why: The Reference Book lists the essential elements as PARTIES CAPABLE OF CONTRACTING, MUTUAL CONSENT, LAWFUL OBJECT, and SUFFICIENT CONSIDERATION, adding that a fifth, A PROPER WRITING, is required only in certain contracts. Recording affects notice to third parties, not validity.

A veteran takes a $310,000 VA-guaranteed purchase loan. The lender charges a flat fee in place of its other origination costs. What is the largest flat charge allowed?

1. $1,550
2. $3,100 ✓
3. $6,200
4. $9,300

Why: 38 CFR 36.4313(d)(2): A LENDER MAY CHARGE AND THE VETERAN MAY PAY A FLAT CHARGE NOT EXCEEDING 1 PERCENT OF THE AMOUNT OF THE LOAN, PROVIDED THAT SUCH FLAT CHARGE SHALL BE IN LIEU OF ALL OTHER CHARGES RELATING TO COSTS OF ORIGINATION not specified in the schedule. $310,000 x 1% = $3,100.

At an informal hearing before the commission, the licensee raises a disputed issue of material fact. What happens?

1. The hearing ends, and a formal hearing is held instead. ✓
2. The commission settles the fact by majority vote.
3. The hearing continues, with the dispute noted on the record.
4. The panel decides the fact before the hearing resumes.

Why: Section 455.225(5), F.S.: A FORMAL HEARING BEFORE AN ADMINISTRATIVE LAW JUDGE FROM THE DIVISION OF ADMINISTRATIVE HEARINGS SHALL BE HELD ... IF THERE ARE ANY DISPUTED ISSUES OF MATERIAL FACT, and IF ANY PARTY RAISES AN ISSUE OF DISPUTED FACT DURING AN INFORMAL HEARING, THE HEARING SHALL BE TERMINATED AND A FORMAL HEARING PURSUANT TO CHAPTER 120 SHALL BE HELD.

A buyer's contract to purchase a house is silent on assignment and calls for no personal skill or quality of the buyer. She wants to assign it to a relative before closing. May she, as a general rule?

1. No; a sale contract may never be assigned without consent.
2. Only if the seller signs a new contract with the relative.
3. Yes; it is assignable, as nothing in it bars assignment. ✓
4. No, unless the contract expressly allows an assignment.

Why: DRE Reference Book ch. 6, Performance of Contracts: ORDINARILY, EITHER A BILATERAL OR A UNILATERAL CONTRACT IS ASSIGNABLE UNLESS IT CALLS FOR SOME PERSONAL QUALITY OF THE PROMISOR, OR UNLESS IT EXPRESSLY OR IMPLIEDLY NEGATES THE RIGHT TO ASSIGN. Neither exception applies here. The general principle is the same in Florida; the assignor still stays liable to the seller unless released.

A property manager contracts to manage an owner's building personally for two years, then quits after six months. The owner asks a court to order her back to work. What is the general rule?

1. The court will order her to work out the whole remainder of the term.
2. The court will order the work only if the owner posts a bond.
3. The court will order it whenever damages would be hard to prove.
4. A duty to render personal service cannot be specifically enforced. ✓

Why: DRE Reference Book ch. 6: THE FOLLOWING OBLIGATIONS CANNOT BE SPECIFICALLY ENFORCED: (L) TO RENDER PERSONAL SERVICE; (2) TO EMPLOY ANOTHER IN PERSONAL SERVICE ... The owner's remedy is damages.

A developer sells lots only to buyers who agree to list any future resale with the developer's own brokerage. Clayton Act section 3 reaches only sales and leases of goods and other commodities. Which statute's words are broad enough to reach this tie-in?

1. Clayton Act section 3, because a building lot counts as a commodity.
2. RESPA section 8, as a listing is a real estate settlement service.
3. Sherman Act section 1, reaching every contract restraining trade. ✓
4. The Fair Housing Act, as it limits the terms of any home sale.

Why: 15 U.S.C. 1: EVERY CONTRACT, COMBINATION IN THE FORM OF TRUST OR OTHERWISE, OR CONSPIRACY, IN RESTRAINT OF TRADE OR COMMERCE AMONG THE SEVERAL STATES ... IS DECLARED TO BE ILLEGAL. 15 U.S.C. 14 is limited to GOODS, WARES, MERCHANDISE, MACHINERY, SUPPLIES, OR OTHER COMMODITIES, which land and brokerage services are not. The Fair Housing Act reaches only terms set because of a protected class.

How many registered employers may a broker associate have at any one time?

1. No more than one. ✓
2. No more than two.
3. No more than three.
4. One in each county.

Why: Section 475.215(2), F.S.: A SALES ASSOCIATE OR BROKER ASSOCIATE SHALL HAVE NO MORE THAN ONE REGISTERED EMPLOYER AT ANY ONE TIME. Holding a broker's qualifications does not change this for a broker associate.

What grade must an applicant reach to pass the Florida sales associate licensure examination?

1. 70 points or higher out of 100.
2. 75 points or higher out of 100. ✓
3. 80 points or higher out of 100.
4. 85 points or higher out of 100.

Why: Rule 61J2-2.029, F.A.C.: the examination is GRADED ON THE BASIS OF 100 POINTS FOR A PERFECT EXAMINATION, and AN APPLICANT WHO RECEIVES A GRADE OF 75 POINTS OR HIGHER SHALL BE DEEMED TO HAVE SUCCESSFULLY COMPLETED THE LICENSURE EXAMINATION. Seventy percent is the Course I end-of-course pass mark, a different test.

A condominium unit owner asks in writing to inspect the association's official records. The manager replies that she must first explain why she wants them. Which statement is correct?

1. She must state a proper purpose, and then has access within 30 days.
2. She need give no reason; the records are due within 10 working days. ✓
3. She need give no reason, but the board may take 45 days to respond.
4. She must state a purpose, as records are open to the board alone.

Why: Section 718.111(12), F.S.: THE RECORDS OF THE ASSOCIATION SHALL BE MADE AVAILABLE TO A UNIT OWNER ... WITHIN 10 WORKING DAYS AFTER RECEIPT OF A WRITTEN REQUEST, and the association MAY NOT REQUIRE A MEMBER TO DEMONSTRATE ANY PURPOSE OR STATE ANY REASON FOR THE INSPECTION. Missing the 10 working days creates A REBUTTABLE PRESUMPTION THAT THE ASSOCIATION WILLFULLY FAILED TO COMPLY.

Before a claimant may recover from the Recovery Fund, what must she ordinarily have done to collect the judgment?

1. Sued the licensee's employing broker and the brokerage corporation too.
2. Recorded a lien against the licensee's home and waited 1 year for payment.
3. Asked the commission to suspend the licensee until the judgment is paid.
4. Had a writ of execution issued and sworn no leviable property was found. ✓

Why: Section 475.483(1)(d)1., F.S.: the claimant HAS CAUSED TO BE ISSUED A WRIT OF EXECUTION UPON SUCH JUDGMENT, AND THE PERSON HAS EXECUTED AN AFFIDAVIT SHOWING THAT NO PERSONAL OR REAL PROPERTY OF THE JUDGMENT DEBTOR LIABLE TO BE LEVIED UPON ... CAN BE FOUND, or that a sale under execution fell short. Subparagraph 2. allows reasonable searches instead where there is a valid reason.

Which of these persons needs a real estate license?

1. An attorney at law acting within the scope of their duties.
2. A salaried onsite leasing employee of an apartment community.
3. An owner selling their own real property.
4. A person paid per sale to sell an owner's lots. ✓

Why: Section 475.011 exempts, among others, an ATTORNEY AT LAW within the scope of their duties (1), an owner that SELLS, EXCHANGES, OR LEASES ITS OWN REAL PROPERTY (2), and a SALARIED EMPLOYEE of an owner of an apartment community who works in an ONSITE RENTAL OFFICE in a leasing capacity (4). The owner exemption in (2) SHALL NOT BE AVAILABLE where an agent or employee PAID A COMMISSION OR OTHER COMPENSATION STRICTLY ON A TRANSACTIONAL BASIS is employed to make sales to customers in the ordinary course of the owner's business.

An agent, without authority, hires a contractor to repair the owner's roof. The owner, knowing all the facts, adopts the contract as her own before the contractor withdraws. What is the effect?

1. It is void, since authority cannot be given after the act
2. It binds her as though she had authorized it beforehand ✓
3. It binds only the agent, who acted without authority
4. It binds her only for work done after she adopted it

Why: Reference Book chapter 10 explains that a principal may ratify an agent's unauthorized act and thereby become bound, and that once ratified the legal consequences are the same as though the act had been originally authorized. The glossary (Reference Book chapter 27) defines ratification as the approval of an act after it has been performed.

A tenant falls behind on rent, and the landlord changes the locks while she is at work to force her out. What may she recover from the landlord, besides costs and attorney's fees?

1. Actual and consequential damages or 3 months' rent, if greater. ✓
2. Actual damages only, and only if she was current on the rent.
3. Double the daily rent for each day she was kept out of the unit.
4. Nothing, since she had already defaulted on the rent then due.

Why: Section 83.67(2), F.S.: a landlord SHALL NOT PREVENT THE TENANT FROM GAINING REASONABLE ACCESS TO THE DWELLING UNIT BY ANY MEANS, INCLUDING, BUT NOT LIMITED TO, CHANGING THE LOCKS. Under 83.67(6) a landlord who violates the section SHALL BE LIABLE TO THE TENANT FOR ACTUAL AND CONSEQUENTIAL DAMAGES OR 3 MONTHS' RENT, WHICHEVER IS GREATER, AND COSTS, INCLUDING ATTORNEY'S FEES. Her default does not license a lockout; the landlord must evict through the court.

A sales associate's license has been involuntarily inactive for nearly 2 years. When must the department give her notice before the license expires?

1. 30 days prior to the license's expiration.
2. 60 days prior to the license's expiration.
3. 90 days prior to the license's expiration. ✓
4. 120 days prior to the license's expiration.

Why: Rule 61J2-1.014(3), F.A.C.: WHEN THE TOTAL PERIOD OF INVOLUNTARY INACTIVITY EXCEEDS 2 YEARS, THE LICENSE SHALL AUTOMATICALLY EXPIRE PER SECTION 475.183(2), FLORIDA STATUTES. NINETY DAYS PRIOR TO THE EXPIRATION, THE DBPR SHALL GIVE NOTICE TO THE INVOLUNTARILY INACTIVE LICENSEE. Until then she may renew by request, compliance with Rule 61J2-3.010 and the renewal and late fees.

What is the chief responsibility of the Federal Reserve System?

1. To regulate money and credit for growth and stability. ✓
2. To insure the deposits customers hold in member banks.
3. To buy residential mortgages from lenders in the secondary market.
4. To set the interest rate on each home loan.

Why: The Reference Book states that THE CHIEF RESPONSIBILITY OF THE FED IS TO REGULATE THE FLOW OF MONEY AND CREDIT TO PROMOTE ECONOMIC GROWTH AND STABILITY, with a monetary policy encouraging high employment and stable prices. It does not set individual loan rates or buy home loans as its ordinary business.

A room is 12 feet by 18 feet. How many square yards of flooring does it need?

1. 18
2. 24 ✓
3. 72
4. 216

Why: Area = 12 x 18 = 216 square feet. The Reference Book gives 1 SQUARE YARD = 9 SQUARE FEET, so 216 / 9 = 24 square yards.

A brokerage corporation has three licensed brokers working with it. How must they be registered with the commission?

1. Only the broker holding the most stock, as its sole officer.
2. Each as a shareholder of record, whatever office they hold.
3. At least two of the three as directors of the corporation.
4. Every one of them as an officer or director of the corporation. ✓

Why: Rule 61J2-5.016, F.A.C.: NO REGISTRATION SHALL BE ISSUED TO THE CORPORATION OR PARTNERSHIP UNLESS EVERY BROKER LICENSED WITH THE CORPORATION OR PARTNERSHIP IS REGISTERED AS AN OFFICER, DIRECTOR OR PARTNER. Officers and directors who expect to be active MUST QUALIFY AND BECOME LICENSED IN THE SAME MANNER AND PROCEDURE AS ANY OTHER APPLICANT FOR ACTIVE LICENSE.

The seller agrees to contribute $5,000 toward the buyer's closing costs. How is it shown?

1. As an amount due from the buyer and due to the seller.
2. As a reduction in the sale price on both sides.
3. As a closing cost paid outside of closing.
4. A credit to the buyer, due from the seller. ✓

Why: 12 CFR 1026.38(j)(2)(v) lists THE TOTAL AMOUNT OF MONEY THAT THE SELLER WILL PROVIDE AT THE REAL ESTATE CLOSING AS A LUMP SUM to pay for loan and other costs among amounts PAID ALREADY BY OR ON BEHALF OF BORROWER, and (k)(2)(vii) lists it as DUE FROM SELLER.

A tenant with three years left on a lease rents the space to another business for one year. The landlord later wants to enforce the lease's rent and repair covenants directly against that business. What is the general rule?

1. The landlord usually must look to the tenant, as a subtenant has no direct duty. ✓
2. The landlord may sue the business directly, as it now holds the lease.
3. The tenant is released, as the business now occupies the space.
4. Neither owes anything, as the sublease ended the original lease.

Why: DRE Reference Book ch. 9: a transfer FOR LESS THAN THE ENTIRE REMAINING LEASE TERM is a sublease. IN A SUBLEASE THE ORIGINAL TENANT REMAINS LIABLE TO THE LANDLORD ... BECAUSE THERE IS NEITHER 'PRIVITY OF CONTRACT' NOR 'PRIVITY OF ESTATE' BETWEEN A SUBTENANT AND A LANDLORD, A SUBTENANT GENERALLY HAS NO DIRECT OBLIGATION TO THE LANDLORD.

Two nearby houses are identical, but more of their type have just come onto the market while buyer numbers are unchanged. What does the principle of supply and demand predict?

1. Prices tend to rise as supply rises.
2. Prices stay the same, as demand is unchanged.
3. Prices tend to fall as supply rises. ✓
4. Prices rise in exact proportion to the new supply.

Why: The Reference Book states that price VARIES DIRECTLY, BUT NOT NECESSARILY PROPORTIONATELY, WITH DEMAND, AND INVERSELY, BUT NOT NECESSARILY PROPORTIONATELY, WITH SUPPLY. INCREASING SUPPLY OR DECREASING DEMAND TENDS TO REDUCE PRICE in the market.

A contract states that no representations were made and that any claim based on them is waived. The seller lied to induce it. Does the clause protect the seller?

1. No; the fraud makes the whole agreement voidable, waiver included. ✓
2. Yes; the buyer agreed in writing to waive any such claims at signing.
3. Yes, if the buyer initialed the waiver clause separately.
4. No, but the buyer must first seek recovery from the listing broker.

Why: The Reference Book explains that A PARTY TO A CONTRACT WHO IS GUILTY OF FRAUD IN ITS INDUCEMENT IS NOT RELIEVED OF THE EFFECTS OF THE FRAUD BY ANY STIPULATION IN THE CONTRACT THAT STATES EITHER THAT NO REPRESENTATIONS HAVE BEEN MADE OR THAT ANY RIGHT WHICH MIGHT BE GROUNDED UPON THEM IS WAIVED. Such a stipulation WILL BE IGNORED, BECAUSE THE FRAUD RENDERS THE WHOLE AGREEMENT VOIDABLE, INCLUDING THE WAIVER PROVISIONS.

A landlord is leasing a 1955 house. Besides the pamphlet and the disclosures, must the landlord give the tenant a 10-day opportunity to have a lead inspection done?

1. Yes; lessees get the same 10 days that purchasers get.
2. Yes, but the lessee may shorten it to five days only.
3. No, unless the lease runs for more than one full year.
4. No; the rule gives that opportunity to purchasers. ✓

Why: 40 CFR 745.110(a): BEFORE A PURCHASER IS OBLIGATED UNDER ANY CONTRACT TO PURCHASE TARGET HOUSING, THE SELLER SHALL PERMIT THE PURCHASER A 10-DAY PERIOD ... TO CONDUCT A RISK ASSESSMENT OR INSPECTION; 745.100 likewise says the rule must GIVE PURCHASERS A 10-DAY OPPORTUNITY. A lessor owes the pamphlet and disclosures only.

An investor has a house under contract and plans to assign that purchase contract to a buyer using an FHA loan. What does the FHA rule provide?

1. The assignment is allowed if the investor's fee is shown on the disclosure.
2. The assignment is allowed if it is recorded before the FHA loan is closed.
3. The buyer may proceed if the investor also signs the FHA loan application.
4. The buyer must purchase from the owner of record, with no assignment. ✓

Why: 24 CFR 203.37a(a)(1): TO BE ELIGIBLE FOR A MORTGAGE INSURED BY FHA, THE PROPERTY MUST BE PURCHASED FROM THE OWNER OF RECORD AND THE TRANSACTION MAY NOT INVOLVE ANY SALE OR ASSIGNMENT OF THE SALES CONTRACT.

A buyer's offer is "contingent upon obtaining a loan", with no amount, rate or duty to apply. What is the risk?

1. None; courts will fill in a reasonable loan amount.
2. It may be illusory; the buyer need not even apply. ✓
3. The offer becomes a unilateral contract.
4. The seller becomes bound but the buyer does not.

Why: The Reference Book explains that an offer must be NONILLUSORY, and gives as an example AN OFFER TO BUY A PROPERTY "CONTINGENT UPON OBTAINING A $100,000 LOAN": without more, THE OFFEROR MIGHT NOT EVEN APPLY FOR A LOAN. The clause should state the loan amount, rate, payments and type, a best-efforts promise by the buyer and the seller's cooperation. Courts cannot make contracts for the parties.

Under Florida law, when is a written estoppel request sent by first-class mail considered received by the servicer?

1. On the day it is deposited with the Postal Service, postage prepaid.
2. Three business days after it is deposited with the Postal Service.
3. Five business days after it is deposited with the Postal Service. ✓
4. Ten calendar days after it is deposited with the Postal Service.

Why: Section 701.04(1)(f)1, F.S.: THE WRITTEN REQUEST IS CONSIDERED RECEIVED BY THE MORTGAGEE OR MORTGAGE SERVICER ... FIVE BUSINESS DAYS AFTER THE REQUEST SENT BY FIRST-CLASS MAIL IS DEPOSITED WITH THE UNITED STATES POSTAL SERVICE. A request by e-mail, fax or the servicer's automated system is received THE DAY it is sent.

Under the commission's rules, which partners of a brokerage partnership must hold a current active broker's license?

1. Each partner who expects to deal with the public as a broker. ✓
2. Only the managing partner named in the firm's registration.
3. Only partners holding a majority interest in the partnership.
4. Only partners who also supervise the firm's sales associates.

Why: Rule 61J2-4.007, F.A.C.: EVERY PARTNERSHIP SHALL BE REGISTERED AND AT LEAST ONE OF ITS PARTNERS LICENSED OR REGISTERED AS AN ACTIVE BROKER. EACH PARTNER WHO EXPECTS TO DEAL WITH THE PUBLIC IN THE PARTNERSHIP’S PRACTICE OR BUSINESS AS A BROKER SHALL HOLD A VALID AND CURRENT ACTIVE BROKER’S LICENSE OR REGISTRATION. The test is dealing with the public, not management title, ownership share or supervision.

A rectangular parcel measures 330 feet by 660 feet. How many acres is it?

1. 2.5 acres
2. 5 acres ✓
3. 10 acres
4. 20 acres

Why: The Reference Book gives an acre as 43,560 square feet. 330 x 660 = 217,800 square feet. Dividing by 43,560 square feet per acre gives 217,800 / 43,560 = 5 acres.

A $250,000 loan at 6% has a monthly payment of $1,500. How much of the first payment reduces principal?

1. $1,250
2. $250 ✓
3. $1,500
4. $15

Why: The first month's interest is $250,000 x 0.06 / 12 = $1,250, using the Reference Book's simple interest method. The rest of the payment reduces principal: $1,500 - $1,250 = $250.

A tenant buys the building in which he has been renting his shop. What happens to his lease?

1. It continues, and he pays rent to himself.
2. It passes to the seller as the new tenant.
3. It ends by merger, and he no longer owes rent. ✓
4. It continues until its stated end date.

Why: DRE Reference Book ch. 9: when THE TENANT ACQUIRES TITLE TO THE PREMISES SUPERIOR TO THAT OF THE LANDLORD (AND THERE IS NO INTERVENING ESTATE), the fee and the leasehold MERGE AS A MATTER OF LAW. IN SUCH A CASE, THE LEASE IS TERMINATED AND THE TENANT IS RELIEVED OF ITS OBLIGATION TO PAY RENT.

An active broker decides to work as a sales associate for another broker. What does Florida law provide?

1. A sales associate license only after passing the sales associate examination.
2. A sales associate license only after a waiting period of 1 year from surrender.
3. A sales associate license on surrender of the broker license, with no added fee. ✓
4. A sales associate license on payment of a new application and license fee.

Why: Section 475.42(1)(c), F.S.: a broker may not employ an unlicensed person as a sales associate, BUT A LICENSE AS SALES ASSOCIATE MAY BE ISSUED TO A PERSON LICENSED AS AN ACTIVE BROKER, UPON REQUEST AND SURRENDER OF THE LICENSE AS BROKER, WITHOUT A FEE IN ADDITION TO THAT PAID FOR THE ISSUANCE OF THE BROKER’S ACTIVE LICENSE. No examination or waiting period is required.

An Ohio resident sells a farm located in Iowa to a buyer who lives in Illinois, and signs the deed while in Ohio. Which state's law chiefly governs the transfer of title?

1. Ohio's, since the seller signed the deed there.
2. Iowa's, since the farm is located in that state. ✓
3. Illinois's, since the buyer resides in that state.
4. Federal law, as the parties are from three states.

Why: DRE Reference Book ch. 4: FOR THE MOST PART, THE LAWS OF THE SITUS STATE GOVERN THE TRANSFER OF TITLE TO REAL PROPERTY. The situs is where the land lies, here Iowa; the parties' residences and the place of signing do not control.

Rae appears to have met every requirement for title to a lot by adverse possession, but no title insurer will insure her title. What does she usually need?

1. A quitclaim deed signed by Rae herself
2. A court decree in a quiet title action ✓
3. A recorded affidavit of her occupancy
4. A lis pendens recorded in her own name

Why: Reference Book chapter 6 explains that title by adverse possession cannot be traced in the recorder's office, so it is neither marketable nor insurable until perfected by court decree, and that the quiet title action is the usual way to clear titles based on adverse possession. A deed from Rae to herself adds nothing to the record chain.

A first-lien loan on a principal dwelling, below the Freddie Mac loan limit, has an APR of 7.75%. The average prime offer rate was 6.20% when the rate was set. What follows?

1. It is not higher-priced, because the gap is under 2.5 points.
2. It is higher-priced, so the creditor must waive all closing costs.
3. It is a higher-priced mortgage loan; an escrow account is required. ✓
4. It is not higher-priced, because only second liens are measured.

Why: 12 CFR 1026.35(a)(1)(i): a higher-priced mortgage loan has an APR that EXCEEDS THE AVERAGE PRIME OFFER RATE ... BY 1.5 OR MORE PERCENTAGE POINTS FOR LOANS SECURED BY A FIRST LIEN within the Freddie Mac limit. 7.75% - 6.20% = 1.55 points. Under (b)(1) the creditor may not extend it UNLESS AN ESCROW ACCOUNT IS ESTABLISHED BEFORE CONSUMMATION.

A lender sells a 1965 house at a foreclosure sale. Must the lead pamphlet and lead disclosures be given to the buyer at that sale?

1. No; sales of target housing at foreclosure are exempt. ✓
2. Yes; every sale of pre-1978 housing is covered by it.
3. No, but only if the buyer is a lender or an investor.
4. Yes, unless the buyer waives the disclosures in writing.

Why: 40 CFR 745.101: THIS SUBPART APPLIES TO ALL TRANSACTIONS TO SELL OR LEASE TARGET HOUSING ... WITH THE EXCEPTION OF THE FOLLOWING: (A) SALES OF TARGET HOUSING AT FORECLOSURE. The exemption turns on the kind of sale, not on who buys.

What must an assignment of a Florida mortgage do to be good against later purchasers for value without notice?

1. Be titled an assignment of mortgage and recorded. ✓
2. Be delivered to the borrower within 30 days.
3. Be signed by the borrower as well as the lender.
4. Be endorsed on the original promissory note only.

Why: Section 701.02(1) provides that AN ASSIGNMENT OF A MORTGAGE ... IS NOT GOOD OR EFFECTUAL IN LAW OR EQUITY, AGAINST CREDITORS OR SUBSEQUENT PURCHASERS, FOR A VALUABLE CONSIDERATION, AND WITHOUT NOTICE, UNLESS THE ASSIGNMENT IS CONTAINED IN A DOCUMENT THAT, IN ITS TITLE, INDICATES AN ASSIGNMENT OF MORTGAGE AND IS RECORDED ACCORDING TO LAW.

In a metes and bounds description, what do the terms metes and bounds refer to?

1. Metes are lengths; bounds are boundaries ✓
2. Metes are boundaries; bounds are lengths
3. Metes are monuments; bounds are angles
4. Metes are acres; bounds are sections

Why: Reference Book chapter 4 defines metes as measures of length (feet, yards) and bounds as measures of boundaries, natural and man-made, such as rivers and roads. Landmarks used in the description are called monuments.

Instead of finding probable cause, what may the probable cause panel issue to the subject?

1. A letter of guidance to the subject. ✓
2. A notice of noncompliance to the subject.
3. A citation carrying a fine for the subject.
4. A reprimand entered on the subject's record.

Why: Section 455.225(4), F.S.: IN LIEU OF A FINDING OF PROBABLE CAUSE, THE PROBABLE CAUSE PANEL ... MAY ISSUE A LETTER OF GUIDANCE TO THE SUBJECT. Rule 61J2-24.001(1), F.A.C., confirms that the penalty ranges do not PRECLUDE THE PROBABLE CAUSE PANEL FROM ISSUING A LETTER OF GUIDANCE. A reprimand is a penalty for the commission, and notices of noncompliance and citations come from the department.

A contract for the sale of real property is executory when signed. At what point does it become executed?

1. When the seller signs and accepts the buyer's written offer.
2. When the deed is properly signed and delivered to the buyer. ✓
3. When the buyer's earnest money is placed into an escrow.
4. When the buyer's lender issues its written loan approval.

Why: DRE Reference Book ch. 6: A CONTRACT OF SALE NORMALLY CALLS FOR THE PREPARATION OF A DEED TO CONVEY THE PROPERTY. IT IS EXECUTORY BECAUSE WHEN THE DEED IS PROPERLY SIGNED AND DELIVERED TO THE PURCHASER THE CONTRACT IS EXECUTED. Acceptance forms the contract; delivery of the deed completes performance.

In the rectangular (government) survey system, what is a township?

1. A square six miles on a side, holding 36 sections ✓
2. A square one mile on a side, holding 640 acres
3. A strip six miles wide running north and south
4. A square 24 miles on a side, between correction lines

Why: Reference Book chapter 4 says a township is a square six miles on each side containing 36 sections, each one mile square. A one-mile square of 640 acres is a section, and a six-mile north-south strip is a range.

A new sales associate's serious injury keeps her from attending the post-license course before her first renewal. What relief may the commission give?

1. Another 12 months, granted automatically on notice of injury.
2. A waiver of post-license education in return for 14 CE hours.
3. Another 6 months, on a written request backed by doctors. ✓
4. Inactive status until she recovers, with no course deadline.

Why: Rule 61J2-3.020(9), F.A.C.: THE COMMISSION WILL ALLOW AN ADDITIONAL 6-MONTH PERIOD AFTER THE FIRST RENEWAL FOLLOWING INITIAL LICENSURE FOR BROKERS AND SALES ASSOCIATES THAT CANNOT, DUE TO INDIVIDUAL PHYSICAL HARDSHIP, COMPLETE THE COURSE OR COURSES WITHIN THE REQUIRED TIME. The request is made IN WRITING, and THE COMMISSION SHALL REQUIRE SAID REQUEST TO BE SUPPORTED BY STATEMENTS OF DOCTORS AND OTHER PERSONS HAVING KNOWLEDGE OF THE FACTS. Section 475.17(5)(a) authorizes the same extension.

Which of these is one of the general tests courts use to decide whether an item is a fixture?

1. The method by which it is attached to the land ✓
2. The price the owner originally paid for it
3. Whether the owner has insured it separately
4. How long the owner has held title to the land

Why: Reference Book chapter 4 lists five tests: the intention of the person attaching the item, the METHOD of attachment (its degree of permanence), its adaptability to the land, any agreement between the parties, and the relationship of the parties. Cost, insurance and length of ownership are not among them.

A broker wants to run the brokerage from a room in her home. Is that allowed?

1. No; a broker's office must be in a commercially zoned building.
2. Yes, but only while the broker employs no sales associates.
3. No, unless the commission first inspects and approves the room.
4. Yes, if zoning allows and the office and sign rules are met. ✓

Why: Rule 61J2-10.022 provides that the required office MAY BE IN A RESIDENTIAL LOCATION, IF NOT CONTRARY TO LOCAL ZONING ORDINANCES, PROVIDED THE MINIMUM OFFICE REQUIREMENTS ARE MET AND THE REQUIRED BROKER'S SIGN IS PROPERLY DISPLAYED. No inspection is required and the rule sets no limit on sales associates.

How far apart are the centers of section 1 and section 36 of the same township?

1. 4 miles
2. 5 miles ✓
3. 6 miles
4. 35 miles

Why: DRE Reference Book ch. 4: in the township diagram section 1 is the top square of the east column and section 36 the bottom square of the same column, and EACH OF THE 36 SECTIONS IN A TOWNSHIP IS A SQUARE, ONE MILE ON EACH SIDE. Working: the column has six sections, so the centers of the first and sixth are 6 - 1 = 5 miles apart.

What does Title XI of FIRREA, passed by Congress in 1989, require of each state?

1. A program to license and certify appraisers for federally related transactions. ✓
2. A state appraisal manual that replaces USPAP for every lender chartered in the state.
3. Licensing of every real estate licensee who prepares a broker price opinion for a lender.
4. A state agency that sets the market value of all property securing federal loans.

Why: Reference Book chapter 15: Title XI of the Financial Institutions Reform, Recovery and Enforcement Act contains the Real Estate Appraisal Reform Amendments, which "require each state to establish a program to license and certify real estate appraisers who perform appraisals for federally related transactions." It does not replace USPAP, license brokers or have the state set values.

A borrower sends her servicer a written notice of error saying a payment was misapplied. For how long after receiving it may the servicer not report adverse information about that payment to a credit bureau?

1. For 30 days after receiving it
2. For 60 days after receiving it ✓
3. For 90 days after receiving it
4. For 120 days after receiving it

Why: 12 CFR 1024.35(i)(1): AFTER RECEIPT OF A NOTICE OF ERROR, A SERVICER MAY NOT, FOR 60 DAYS, FURNISH ADVERSE INFORMATION TO ANY CONSUMER REPORTING AGENCY REGARDING ANY PAYMENT THAT IS THE SUBJECT OF THE NOTICE OF ERROR. Under (d) the servicer must also acknowledge the notice WITHIN FIVE DAYS (EXCLUDING LEGAL PUBLIC HOLIDAYS, SATURDAYS, AND SUNDAYS).

A modest two-bedroom cottage stands among much larger, more expensive homes, and it sells for more than identical cottages in a neighborhood of similar cottages. Which principle explains the higher price?

1. The principle of regression.
2. The principle of progression. ✓
3. The principle of conformity.
4. The principle of contribution.

Why: DRE Reference Book ch. 15: PRINCIPLE OF PROGRESSION. THE WORTH OF A LESSER-VALUED OBJECT TENDS TO BE ENHANCED BY ASSOCIATION WITH MANY SIMILAR OBJECTS OF GREATER VALUE (INADEQUACY OR UNDER-IMPROVEMENT). Regression is the opposite effect, on the more valuable property.

A court has declared an owner incompetent, and no guardian has been appointed. The owner then signs a contract to sell land. What is its status?

1. It is valid, if the price paid was fair to the owner
2. It is voidable, but binding until a court sets it aside
3. It is enforceable once the buyer records the contract
4. It is void, since no contract can be made with that person ✓

Why: Reference Book chapter 6 states that after a person's incapacity has been judicially determined, no contract can be made with that person until restored to capacity, and dealing in such a person's real property requires a guardian and court approval. An agreement lacking a capable party is void, not merely voidable.

A lender making FHA-insured loans tells a buyer it lends no less than $150,000, more than she needs. May the lender require that minimum as a condition of making her FHA-insured loan?

1. Yes; each lender sets its own minimum loan amount.
2. Yes, if the minimum is disclosed in the Loan Estimate.
3. Only if HUD has approved the minimum in writing first.
4. No; it may not require a minimum principal amount. ✓

Why: 24 CFR 203.18d: A MORTGAGEE MAY NOT REQUIRE, AS A CONDITION OF PROVIDING A LOAN SECURED BY A MORTGAGE INSURED UNDER THIS PART, THAT THE PRINCIPAL AMOUNT OF THE MORTGAGE EXCEED A MINIMUM AMOUNT ESTABLISHED BY THE MORTGAGEE. Disclosure or approval does not cure it.

A seller signs a net listing requiring her to receive $300,000. The broker sells the property for $318,000. Ignoring closing costs, what is the broker's compensation?

1. $9,000
2. $15,900
3. $18,000 ✓
4. $19,080

Why: Reference Book chapter 10 describes a net listing as one in which the broker's commission is any sum received in excess of the seller's net: $318,000 minus $300,000 is $18,000. Had the property sold for $300,000 or less, the broker would receive nothing; $19,080 is a 6% commission, which a net listing does not use.

A settlement service provider pays kickbacks for referrals on federally related mortgage loans. What civil liability does RESPA impose in favor of the borrower charged for the service?

1. Twice the charge paid, plus a fixed $1,000 civil penalty.
2. Three times the charge paid for the settlement service. ✓
3. A refund of the charge paid, with no further liability.
4. The charge paid plus interest at the legal rate only.

Why: 12 U.S.C. 2607(d)(2): violators SHALL BE JOINTLY AND SEVERALLY LIABLE TO THE PERSON OR PERSONS CHARGED FOR THE SETTLEMENT SERVICE ... IN AN AMOUNT EQUAL TO THREE TIMES THE AMOUNT OF ANY CHARGE PAID FOR SUCH SETTLEMENT SERVICE. Under (d)(1) they may also BE FINED NOT MORE THAN $10,000 OR IMPRISONED FOR NOT MORE THAN ONE YEAR.

For a fee, a person negotiates the sale of a going dry-cleaning business, with its equipment and goodwill but no land or building. Is a Florida real estate license required?

1. Yes; business opportunities are real estate here. ✓
2. No; only land and buildings require a license.
3. No, as long as the fee is a flat charge, not a %.
4. Only if the store's lease is assigned in the deal.

Why: Section 475.01(1)(a), F.S. defines a broker as one who, for compensation, negotiates THE SALE, EXCHANGE, PURCHASE, OR RENTAL OF BUSINESS ENTERPRISES OR BUSINESS OPPORTUNITIES OR ANY REAL PROPERTY, and (1)(i) defines real property to include ANY INTEREST IN BUSINESS ENTERPRISES OR BUSINESS OPPORTUNITIES. Selling a business for a fee needs a license.

An owner with a capped homestead adds a swimming pool, substantially completed in August. When is the pool assessed at just value?

1. As of the date the building permit was issued
2. As of the first January 1 after completion ✓
3. Only when the home next changes its ownership
4. As of the January 1 before the work had begun

Why: Section 193.155(4)(a), F.S.: CHANGES, ADDITIONS, OR IMPROVEMENTS TO HOMESTEAD PROPERTY SHALL BE ASSESSED AT JUST VALUE AS OF THE FIRST JANUARY 1 AFTER THE CHANGES, ADDITIONS, OR IMPROVEMENTS ARE SUBSTANTIALLY COMPLETED. The rest of the homestead keeps its capped value.

A buyer's licensee suggests that a handyman test the home for radon for a fee. What does Florida law require of anyone who performs radon measurements for pay?

1. A Florida contractor's license.
2. A real estate license in Florida.
3. Certification by the department. ✓
4. Registration with the county.

Why: Section 404.056(2)(b), F.S.: A PERSON MAY NOT PARTICIPATE IN PERFORMING RADON GAS OR RADON PROGENY MEASUREMENTS ... AND CHARGE A FEE OR OBTAIN OTHER REMUNERATION AS BENEFIT FOR SUCH SERVICES OR DEVICES, UNLESS THAT PERSON IS CERTIFIED BY THE DEPARTMENT.

An investor borrows against a house to buy it as a business rental, primarily for a business purpose. Does RESPA's Regulation X apply to the loan?

1. Yes; every loan on a house is covered.
2. Yes, if the lender is federally insured.
3. No; business purpose credit is exempt. ✓
4. No, but only if the loan is over a year.

Why: 12 CFR 1024.5(b)(2): the exemptions include BUSINESS PURPOSE LOANS: AN EXTENSION OF CREDIT PRIMARILY FOR A BUSINESS, COMMERCIAL, OR AGRICULTURAL PURPOSE, as defined by Regulation Z. Vacant land and temporary financing are also exempt in stated cases.

An investor acquired a house in a like-kind exchange three years ago, then moved in and has used it as her main home for the last two years. Can she use the home-sale exclusion if she sells now?

1. Yes; she has met the 2-year ownership and use requirements.
2. Yes, but only for the part of the gain since she moved in.
3. No, since a home acquired by exchange can never qualify.
4. No; the exclusion is barred for 5 years after the exchange. ✓

Why: 26 U.S.C. 121(d)(10): IF A TAXPAYER ACQUIRES PROPERTY IN AN EXCHANGE WITH RESPECT TO WHICH GAIN IS NOT RECOGNIZED ... UNDER SUBSECTION (A) OR (B) OF SECTION 1031, SUBSECTION (A) SHALL NOT APPLY TO THE SALE OR EXCHANGE OF SUCH PROPERTY ... DURING THE 5-YEAR PERIOD BEGINNING WITH THE DATE OF SUCH ACQUISITION.

A borrower took a graduated payment mortgage whose low early payments did not cover the interest due. She must sell after two years in a flat market. What risk does she face?

1. Owing more than the amount she first borrowed ✓
2. A prepayment penalty that every such loan carries
3. Loss of her equity to the lender under the loan's terms
4. Automatic conversion of the loan to a higher fixed rate

Why: Reference Book chapter 12 explains that a graduated payment mortgage may involve negative amortization in the early years, so an early sale could require the borrower to repay more than the original principal, a significant problem where the property has not risen in value. Nothing in the loan type imposes a penalty or converts the rate.

A married applicant qualifies alone for the home loan he requests. May the lender require his wife to sign the promissory note?

1. No, but state law may require her to sign the mortgage for the lien. ✓
2. Yes; a lender may always require that a spouse sign the note as well.
3. Yes, if the couple has ever filed a joint financial statement.
4. No, and she may not be asked to sign any loan document at all.

Why: 12 CFR 1002.7(d)(1): A CREDITOR SHALL NOT REQUIRE THE SIGNATURE OF AN APPLICANT'S SPOUSE ... ON ANY CREDIT INSTRUMENT IF THE APPLICANT QUALIFIES UNDER THE CREDITOR'S STANDARDS OF CREDITWORTHINESS. Under (d)(4), for secured credit the creditor MAY REQUIRE THE SIGNATURE OF THE APPLICANT'S SPOUSE ... ON ANY INSTRUMENT NECESSARY ... UNDER APPLICABLE STATE LAW, for example AN INSTRUMENT TO CREATE A VALID LIEN.

No time for delivery has been fixed by agreement or by law. When must a licensee account for and deliver money in the licensee's hands that belongs to another?

1. Within 30 days after the transaction ends.
2. Upon demand of the person entitled to it. ✓
3. At the next monthly escrow reconciliation.
4. Within 15 business days of a written request.

Why: Section 475.25(1)(d)1., F.S.: discipline follows where a licensee HAS FAILED TO ACCOUNT OR DELIVER TO ANY PERSON ... AT THE TIME WHICH HAS BEEN AGREED UPON OR IS REQUIRED BY LAW OR, IN THE ABSENCE OF A FIXED TIME, UPON DEMAND OF THE PERSON ENTITLED TO SUCH ACCOUNTING AND DELIVERY.

A brokerage corporation files a change of employment for one of its sales associates. Who must sign it?

1. The sales associate, with a copy then sent to the corporation.
2. Any officer of the corporation, licensed or not, in its name.
3. An active broker officer or director, in the corporation's name. ✓
4. The corporation's registered agent, on the department's form.

Why: Rule 61J2-5.020, F.A.C.: ALL APPLICATIONS, REQUESTS, CHANGES OF ADDRESS AND EMPLOYMENT FOR SALESPERSONS, OR OTHER PAPERS AND DOCUMENTS REQUIRED OF CORPORATIONS, SHALL BE SIGNED IN THE NAME OF THE CORPORATION, BY AN ACTIVE BROKER OFFICER OR DIRECTOR.

In an advertisement showing a team name, how must it compare with the brokerage name?

1. It must be in smaller print, and below the brokerage name.
2. It may not be in larger print than the registered brokerage's name. ✓
3. It may be larger, if the brokerage name also appears.
4. It must replace the brokerage name wherever the team is advertised.

Why: Rule 61J2-10.026(6) provides that IN ADVERTISEMENTS CONTAINING THE TEAM OR GROUP NAME, THE TEAM OR GROUP NAME SHALL NOT BE IN LARGER PRINT THAN THE NAME OF THE REGISTERED BROKERAGE, and that reasonable persons must know they are dealing with a team or group. Equal size is therefore permitted.