New York Real Estate Salesperson License, Practice Exams

Unless a charter or special law sets another date, when does the board of assessment review begin hearing complaints?

1. The first Monday of March.
2. The first day of January.
3. The second Tuesday of July.
4. The fourth Tuesday of May. ✓

Why: Real Property Tax Law 512(1): BEGINNING ON THE FOURTH TUESDAY OF MAY, OR SUCH OTHER DATE AS IS ESTABLISHED BY CITY CHARTER, COUNTY CHARTER, COUNTY TAX ACT OR OTHER SPECIAL LAW, the board meets to hear complaints ('Grievance Day').

Interest accrues on money a broker holds for the parties. When may the broker benefit from it?

1. Only against earned commission, with all parties' consent. ✓
2. Always, since the broker carries the burden of the account.
3. Whenever the sum held is below the insured deposit limit.
4. Only when the buyer's own attorney approves it in writing.

Why: 19 NYCRR 175.1: ACCRUED INTEREST, IF ANY, SHALL NOT BE RETAINED BY, OR FOR THE BENEFIT OF, THE BROKER EXCEPT TO THE EXTENT THAT IT IS APPLIED TO, AND DEDUCTED FROM, EARNED COMMISSION, WITH THE CONSENT OF ALL PARTIES.

Replacing an outdated heating system would cost $3,000, and buyers would pay $5,000 more for the house if it were replaced. How is that obsolescence classed?

1. Incurable functional obsolescence.
2. Incurable external obsolescence.
3. Curable external obsolescence.
4. Curable functional obsolescence. ✓

Why: DRE Reference Book ch. 15: CURABLE FUNCTIONAL OBSOLESCENCE WILL PROVIDE A POSITIVE RETURN IF REPAIRED ... WHEN IT COSTS LESS TO CORRECT THE DEFICIENCY THAN THE MARKET IS WILLING TO PAY FOR IT; it is incurable when correction costs more.

A $60,000 swimming pool in a neighborhood where buyers will not pay for pools is an example of what?

1. External obsolescence from neighborhood factors.
2. Physical deterioration of the improvements.
3. Functional obsolescence through superadequacy. ✓
4. The principle of progression adding value.

Why: DRE Reference Book ch. 15: FUNCTIONAL OBSOLESCENCE IS CAUSED BY EITHER A DEFICIENCY OR A SUPERADEQUACY; an over-improvement such as A SWIMMING POOL THAT COSTS $60,000 the market will not pay for is the example given.

What indoor relative humidity does the EPA's mold guide recommend?

1. Below 20%, ideally 10% to 15%.
2. Below 60%, ideally 30% to 50%. ✓
3. Exactly 65%, all year round.
4. Above 70%, ideally 70% to 80%.

Why: EPA, A Brief Guide to Mold, Moisture and Your Home: KEEP INDOOR HUMIDITY BELOW 60 PERCENT (IDEALLY BETWEEN 30 AND 50 PERCENT) RELATIVE HUMIDITY.

A utility company that owns no nearby land holds the right to run power lines across a farm. What kind of easement is that?

1. An easement appurtenant.
2. A prescriptive license.
3. An easement in gross. ✓
4. A party wall easement.

Why: DRE Reference Book ch. 5, Easements in Gross: IT IS POSSIBLE TO HAVE AN EASEMENT THAT IS NOT APPURTENANT TO PARTICULAR LAND ... PUBLIC UTILITIES FREQUENTLY ENJOY EASEMENTS TO ERECT POLES AND STRING WIRES OVER PRIVATE LANDS, YET OWN NO RELATED DOMINANT tenement.

An appraiser values a new deck by how much it adds to the value of the whole house, not by what it cost. Which principle is that?

1. Contribution. ✓
2. Substitution.
3. Conformity.
4. Progression.

Why: DRE Reference Book ch. 15: under the PRINCIPLE OF CONTRIBUTION, A COMPONENT PART OF A PROPERTY IS VALUED IN PROPORTION TO ITS CONTRIBUTION TO THE VALUE OF THE WHOLE PROPERTY or by how much its absence detracts.

A person who received a commission through a violation of the license law may be sued by the person aggrieved. What penalty can the court award?

1. Exactly double the sum received, and no more.
2. Up to three times the sum received, at most.
3. A flat penalty of $1,000 for each separate act found.
4. From the sum received up to four times that sum. ✓

Why: Real Property Law 442-e(3): the offender is liable to a penalty of NOT LESS THAN THE AMOUNT OF THE SUM OF MONEY RECEIVED BY HIM AS SUCH COMMISSION, COMPENSATION OR PROFIT AND NOT MORE THAN FOUR TIMES THE SUM SO RECEIVED, recoverable by any person aggrieved.

According to Town Law 263, zoning regulations must be made in accordance with what?

1. A comprehensive plan. ✓
2. The county's tax map.
3. The state building code.
4. A majority petition.

Why: Town Law 263: SUCH REGULATIONS SHALL BE MADE IN ACCORDANCE WITH A COMPREHENSIVE PLAN and designed to lessen congestion, secure safety from fire and flood, promote health and welfare, provide light and air and prevent overcrowding.

A co-op apartment in Buffalo sells for $1,200,000. Does the additional ('mansion') transfer tax apply?

1. No; co-op shares are personal property, not real property.
2. No; it reaches only one-, two- and three-family houses.
3. Yes; a co-op unit counts as residential real property here. ✓
4. Only if the co-op board consents to the sale in writing.

Why: Tax Law 1402-a(a): residential real property SHALL INCLUDE A ONE, TWO, OR THREE-FAMILY HOUSE, AN INDIVIDUAL CONDOMINIUM UNIT, OR A COOPERATIVE APARTMENT UNIT, and the tax applies at one million dollars or more.

A salesperson wants to place an online advertisement for a property listed with her own brokerage. When is that permitted?

1. Whenever she personally obtained the listing from the owner.
2. When her own broker has approved placing the ad. ✓
3. Whenever her own name appears larger than the broker's name.
4. Only if the owner, not the broker, pays for the advertising.

Why: 19 NYCRR 175.25(b)(1): ONLY A REAL ESTATE BROKER IS PERMITTED TO PLACE OR CAUSE TO BE PUBLISHED ADVERTISEMENTS; a salesperson's advertisement is allowed only where the property is listed with or represented by her own broker AND SAID REAL ESTATE BROKER APPROVED PLACEMENT OF THE ADVERTISEMENT. The broker's name must also appear (175.25(c)(2)).

According to IRS Publication 936's test, points on a loan to buy a main home can be fully deductible in the year paid only if what is true?

1. The loan is for a vacation home or other second home.
2. The points are paid later.
3. The seller, not the buyer, is the party who pays them.
4. The loan is secured by the main home. ✓

Why: IRS Publication 936, 'Are My Points Fully Deductible This Year?': the first test is IS THE LOAN SECURED BY YOUR MAIN HOME?, followed by whether paying points is an established practice in the area and not more than generally charged, among others.

How long must the board of assessment review sit to hear complaints on grievance day?

1. At least 2 hours, any time of the day.
2. At least 4 hours, 2 of them after 6 p.m. ✓
3. At least 6 hours, all after 6 p.m.
4. At least 8 hours, all before 5 p.m.

Why: Real Property Tax Law 525(1): the hours shall be FOR A PERIOD OF AT LEAST FOUR HOURS, not necessarily continuous between 9 a.m. and 10 p.m., BUT IN NO EVENT LESS THAN TWO HOURS AFTER SIX O'CLOCK IN THE EVENING.

A buyer's agent calls a for-sale-by-owner seller to discuss her home in detail for the first time. What must the buyer's agent do?

1. Give her the disclosure form and get her signed acknowledgment. ✓
2. Nothing, since the buyer's agent does not represent the seller.
3. Give her the form only if she later accepts the buyer's offer.
4. Tell her orally which party it represents; no form is needed.

Why: Real Property Law 443(3)(c): A BUYER'S AGENT ... SHALL PROVIDE THE FORM TO THE SELLER, SELLER'S AGENT, LANDLORD OR LANDLORD'S AGENT AT THE TIME OF THE FIRST SUBSTANTIVE CONTACT WITH THE SELLER or landlord AND SHALL OBTAIN A SIGNED ACKNOWLEDGMENT from the seller, landlord or listing agent.

Does New York's Human Rights Law bar a broker from refusing to negotiate the lease of commercial space because of the prospective tenant's sex?

1. No; it covers residential housing accommodations only.
2. Only if the space is in a mixed-use building.
3. Yes; it covers commercial space as well as housing. ✓
4. Only for spaces of more than 5,000 square feet.

Why: Executive Law 296(5)(c)(1): it is unlawful for any real estate broker or salesperson TO REFUSE TO SELL, RENT OR LEASE ANY HOUSING ACCOMMODATION, LAND OR COMMERCIAL SPACE ... OR TO REFUSE TO NEGOTIATE for it because of sex or another protected class.

What must a written advance consent to dual agency with designated sales agents contain?

1. The commission rate that each designated agent will earn.
2. The approval of the Department of State for the appointment.
3. The name of the agent appointed to represent that party. ✓
4. The name of the other party to the eventual transaction.

Why: Real Property Law 443(1)(q): 'Advance consent to dual agency with designated sales agents' means written informed consent signed by the party THAT INDICATES THE NAME OF THE AGENT APPOINTED TO REPRESENT the party as a designated sales agent.

Why does a town adopt a comprehensive plan, according to Town Law 272-a?

1. To fix the assessed value of every parcel for tax purposes.
2. To replace its zoning law with a single set of guidelines.
3. To decide which buyers may purchase land within the town.
4. To promote its people's health, safety and general welfare. ✓

Why: Town Law 272-a(1)(f): THE TOWN COMPREHENSIVE PLAN IS A MEANS TO PROMOTE THE HEALTH, SAFETY AND GENERAL WELFARE OF THE PEOPLE OF THE TOWN and to consider the needs of the region; 272-a(1)(b) ties comprehensive planning to regulating land use.

Before a sponsor may offer co-op interests to the public in New York, with whom must its offering statement be filed?

1. The Department of State's Division of Licensing Services.
2. The Department of Law, the attorney general's office. ✓
3. The county clerk of the county where the building stands.
4. The Division of Housing and Community Renewal in Albany.

Why: General Business Law 352-e(1)(a): it is ILLEGAL to make a public offering of securities in real estate, INCLUDING COOPERATIVE INTERESTS IN REALTY, UNLESS AND UNTIL THERE SHALL HAVE BEEN FILED WITH THE DEPARTMENT OF LAW, PRIOR TO SUCH OFFERING, a written offering statement or prospectus.

Is it lawful in New York to restrict the sale of housing to people aged 62 and over and their spouses?

1. No; that is age bias.
2. Yes; such senior housing is exempt. ✓
3. Yes, but only if every resident is over the age of 70.
4. Only in buildings the state itself owns and operates.

Why: Executive Law 296(5)(a)(4): the bans do not apply SOLELY WITH RESPECT TO AGE AND FAMILIAL STATUS TO THE RESTRICTION OF THE SALE, RENTAL OR LEASE OF HOUSING ACCOMMODATIONS EXCLUSIVELY TO PERSONS SIXTY-TWO YEARS OF AGE OR OLDER AND THE SPOUSE, or to qualifying 55+ housing.

Which covenants does New York's statutory deed with full covenants contain?

1. Seisin, quiet enjoyment, no incumbrances, assurance, warranty. ✓
2. Seisin, quiet enjoyment, a covenant against the grantor's acts alone.
3. Only a warranty of title, with no covenants as to incumbrances at all.
4. No covenants at all; it only remises, releases and quitclaims title.

Why: Real Property Law 258, Statutory Form A (deed with full covenants): the grantor covenants FIRST, that he IS SEIZED OF SAID PREMISES IN FEE SIMPLE; SECOND, that the grantee SHALL QUIETLY ENJOY; THIRD, that the premises ARE FREE FROM INCUMBRANCES; FOURTH, FURTHER NECESSARY ASSURANCE; FIFTH, that he WILL FOREVER WARRANT THE TITLE.

A zoning board grants a use variance. How large a variance should it grant?

1. The minimum needed to address the proven hardship. ✓
2. Whatever the applicant requested in the application.
3. Whatever the planning board recommends to it in writing.
4. The largest variance consistent with neighbors' consent.

Why: Town Law 267-b(2)(c): the board SHALL GRANT THE MINIMUM VARIANCE THAT IT SHALL DEEM NECESSARY AND ADEQUATE TO ADDRESS THE UNNECESSARY HARDSHIP PROVEN BY THE APPLICANT, while protecting the neighborhood's character and the community.

A land description sets out each boundary line with its length, direction and end points. What kind of description is it?

1. Lot and block.
2. Metes and bounds. ✓
3. Rectangular survey.
4. Street address.

Why: DRE Reference Book ch. 27: METES AND BOUNDS describes land SETTING FORTH ALL THE BOUNDARY LINES TOGETHER WITH THEIR TERMINAL POINTS AND ANGLES; metes are lengths or measurements and bounds are boundaries.

What penalty does the Sherman Act set for an individual convicted of a conspiracy in restraint of trade?

1. Up to $10,000 and up to 5 years' imprisonment, as a felony.
2. Up to $100,000 and up to 1 year's imprisonment, as a misdemeanor.
3. Up to $1,000,000 and up to 10 years' imprisonment, as a felony. ✓
4. A civil fine only, set by the court, with no imprisonment.

Why: 15 U.S.C. 1: every person who does so SHALL BE DEEMED GUILTY OF A FELONY, and on conviction punished BY FINE NOT EXCEEDING $100,000,000 IF A CORPORATION, OR, IF ANY OTHER PERSON, $1,000,000, OR BY IMPRISONMENT NOT EXCEEDING 10 YEARS, OR BY BOTH.

For Banking Law 590's licensing rules, what is a 'mortgage loan'?

1. A personal-use loan to an individual on 1-4 family homes or co-ops. ✓
2. Any loan secured by real property, whatever the borrower's purpose.
3. A business loan secured by commercial property in New York State.
4. Any loan over $50,000 that a bank makes to an individual borrower in the state.

Why: Banking Law 590(1)(a)-(b): 'Mortgage loan' means A LOAN TO A NATURAL PERSON MADE PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD USE, secured by a mortgage on residential real property (A ONE-TO-FOUR FAMILY DWELLING) or on co-op shares and a proprietary lease.

A tenant has occupied a unit for 18 months under a one-year lease. The landlord will not renew. How much notice must he give?

1. 30 days.
2. 60 days. ✓
3. 90 days.
4. 180 days.

Why: Real Property Law 226-c(2)(c): IF THE TENANT HAS OCCUPIED THE UNIT FOR MORE THAN ONE YEAR BUT LESS THAN TWO YEARS, OR HAS A LEASE TERM OF AT LEAST ONE YEAR BUT LESS THAN TWO YEARS, THE LANDLORD SHALL PROVIDE AT LEAST SIXTY DAYS' NOTICE (60 days). The notice period runs on the longer of occupancy and lease term.

A town board member would like to sit on the town's zoning board of appeals as well. May she?

1. No; town board members are ineligible to serve on it. ✓
2. Yes, if the town board votes to appoint her to it.
3. Yes, but only as its chairperson, not as a member.
4. Only while the board has fewer than five members.

Why: Town Law 267(3): TOWN BOARD MEMBERS INELIGIBLE - no person who is a member of the town board shall be eligible for membership on the board of appeals, which the town board appoints under 267(2).

A lease states that the tenant waives the warranty of habitability in return for lower rent. What is the effect of that clause?

1. It is valid if the tenant initials it.
2. It is void, against public policy. ✓
3. It is valid for leases over one year.
4. It is valid if rent is below market.

Why: Real Property Law 235-b(2): ANY AGREEMENT BY A LESSEE OR TENANT OF A DWELLING WAIVING OR MODIFYING HIS RIGHTS AS SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY TO PUBLIC POLICY. Every residential lease carries the warranty under 235-b(1).

What is the maximum civil (non-criminal) rate of interest in New York on a loan to an individual, under Banking Law 14-a?

1. 6% a year.
2. 10% a year.
3. 16% a year. ✓
4. 25% a year.

Why: Banking Law 14-a(1): THE MAXIMUM RATE OF INTEREST PROVIDED FOR IN SECTION 5-501 OF THE GENERAL OBLIGATIONS LAW SHALL BE SIXTEEN PER CENTUM PER ANNUM (16%). General Obligations Law 5-501 sets 6% unless 14-a prescribes a different rate.

A residential lease is written in dense legalese with no section headings. What remedy does New York's plain language law give the tenant?

1. Automatic cancellation of the lease.
2. A rent reduction of 10% for its term.
3. Treble damages plus attorney's fees.
4. Actual damages plus a $50 penalty. ✓

Why: General Obligations Law 5-702(a): residential leases must be written in a CLEAR AND COHERENT MANNER USING WORDS WITH COMMON AND EVERY DAY MEANINGS and APPROPRIATELY DIVIDED AND CAPTIONED; a lessor who fails SHALL BE LIABLE ... IN AN AMOUNT EQUAL TO ANY ACTUAL DAMAGES SUSTAINED PLUS A PENALTY OF FIFTY DOLLARS.

A title agency offers a broker $200 for every buyer with a bank mortgage the broker sends it. Under RESPA, may the broker accept?

1. No; paying for referrals of settlement business is barred. ✓
2. Yes, if the buyer is told of the payment before closing.
3. Yes, if the fee is shown on the Closing Disclosure form.
4. Yes, if the payment is under the title premium charged.

Why: 12 CFR 1024.14(b): NO PERSON SHALL GIVE AND NO PERSON SHALL ACCEPT ANY FEE, KICKBACK OR OTHER THING OF VALUE pursuant to an agreement THAT BUSINESS INCIDENT TO OR PART OF A SETTLEMENT SERVICE INVOLVING A FEDERALLY RELATED MORTGAGE LOAN SHALL BE REFERRED TO ANY PERSON. A referral is not a compensable service.

Under a graduated payment mortgage, how do payments usually behave?

1. They stay level for the loan's whole term, month to month.
2. They start high and fall as the balance is paid down.
3. They start low and rise later to catch up on principal. ✓
4. They change with a published index every single year.

Why: DRE Reference Book ch. 27: a GRADUATED PAYMENT MORTGAGE provides FOR PARTIALLY DEFERRED PAYMENTS OF PRINCIPAL AT START OF LOAN; usually after the first five years THE PRINCIPAL AND INTEREST PAYMENT ARE SUBSTANTIALLY HIGHER, to make up principal not paid at the start. Real Property Law 279 governs such mortgages in New York.

A broker receives a buyer's deposit. What does the regulation require?

1. Deposit it within ten business days in the broker's own account.
2. Deposit it by the closing date in any account the parties choose.
3. Deposit it within five business days in an investment fund of choice.
4. Deposit it within three business days in a separate special account. ✓

Why: 19 NYCRR 175.1: a broker SHALL NOT COMMINGLE the principal's money with his own and shall maintain A SEPARATE, SPECIAL BANK ACCOUNT used exclusively for such monies, the DEPOSIT TO BE MADE WITHIN THREE BUSINESS DAYS; the money may not be placed in any depository, fund or investment OTHER THAN A FEDERALLY INSURED BANK ACCOUNT.

A broker is selling a house he co-owns with his brother. What does the regulation require?

1. He must make his interest known to the purchaser. ✓
2. He must first list it through a different broker.
3. He must waive any commission on the sale price.
4. He must obtain the Department of State's consent.

Why: 19 NYCRR 175.6: BEFORE A REAL ESTATE BROKER SELLS PROPERTY IN WHICH HE OWNS AN INTEREST, HE SHALL MAKE SUCH INTEREST KNOWN TO THE PURCHASER.

Where does radon come from?

1. Deteriorating lead-based paint in homes built before 1978.
2. Leaks from oil tanks buried beneath a building's grounds.
3. Gas appliances that are poorly vented inside the house.
4. The natural breakdown of uranium in soil, rock and water. ✓

Why: EPA, A Citizen's Guide to Radon: RADON COMES FROM THE NATURAL (RADIOACTIVE) BREAKDOWN OF URANIUM IN SOIL, ROCK AND WATER and gets into the air you breathe; it is a cancer-causing, radioactive gas.

Comparable houses sell at about 140 times monthly rent. The subject's market rent is $1,500 a month. What value does the gross rent multiplier indicate?

1. $150,000
2. $180,000
3. $210,000 ✓
4. $240,000

Why: DRE Reference Book ch. 15: THE APPRAISER MULTIPLIES THE SELECTED GROSS RENT MULTIPLIER BY THE MARKET RENTAL OF THE SUBJECT PROPERTY. 140 x $1,500 = $210,000.

An investor buys a building with a large mortgage to increase the return on the cash she puts in. What is that?

1. Equity build-up.
2. A sale-leaseback.
3. Leverage. ✓
4. Capitalization.

Why: DRE Reference Book ch. 27: LEVERAGE is THE USE OF DEBT FINANCING OF AN INVESTMENT TO MAXIMIZE THE RETURN PER DOLLAR OF EQUITY INVESTED.

If the charges are never paid, how long does a filed notice of lien for unpaid condominium common charges stay in effect?

1. One year from filing.
2. Three years from filing.
3. Six years from filing. ✓
4. Ten years from filing.

Why: Real Property Law 339-aa: the lien continues UNTIL ALL SUMS SECURED THEREBY ... SHALL HAVE BEEN FULLY PAID OR UNTIL EXPIRATION SIX YEARS FROM THE DATE OF FILING, WHICHEVER OCCURS SOONER.

Under Real Property Law 443, who is an 'agent'?

1. Any licensee who shows a property to a buyer.
2. Any person paid a commission on a sale.
3. A licensee acting in a fiduciary capacity. ✓
4. A licensee named on a signed listing agreement.

Why: Real Property Law 443(1)(a): 'Agent' means a person licensed as a real estate broker, associate real estate broker or real estate salesperson AND IS ACTING IN A FIDUCIARY CAPACITY.

On what grounds may an owner complain about an assessment to the board of assessment review?

1. That the owner cannot afford the resulting tax bill.
2. That the school district's budget rose too sharply.
3. That it is excessive, unequal, unlawful or misclassified. ✓
4. That the tax rate set by the town is too high.

Why: Real Property Tax Law 524(2): THE GROUNDS FOR REVIEW OF AN ASSESSMENT SHALL BE THAT THE ASSESSMENT COMPLAINED OF IS EXCESSIVE, UNEQUAL OR UNLAWFUL, OR THAT REAL PROPERTY IS MISCLASSIFIED.

What is the fee for a New York salesperson's license?

1. $55, plus a $10 surcharge for fair housing testing. ✓
2. $155, plus a $30 surcharge for fair housing testing.
3. $50, with no surcharge added for any fund at all.
4. $75, plus the $15 examination fee added on top.

Why: Real Property Law 441-b(1): the salesperson fee SHALL BE FIFTY-FIVE DOLLARS PLUS AN ADDITIONAL TEN DOLLAR SURCHARGE, deposited in the anti-discrimination in housing fund for statewide fair housing testing. The broker fee is $155 plus a $30 surcharge; the examination fee under 441-b(1-A) is $15.

A buyer reads the disclosure form but refuses to sign the acknowledgment. What must the agent do?

1. Record the facts of the refusal in a sworn declaration and keep it. ✓
2. Stop working with the buyer until the acknowledgment is signed.
3. Report the refusal to the Department of State within ten days.
4. Have the broker sign the acknowledgment in the buyer's place.

Why: Real Property Law 443(3)(e): if a party REFUSES TO SIGN AN ACKNOWLEDGMENT OF RECEIPT, THE AGENT SHALL SET FORTH UNDER OATH OR AFFIRMATION A WRITTEN DECLARATION OF THE FACTS OF THE REFUSAL AND SHALL MAINTAIN A COPY OF THE DECLARATION FOR NOT LESS THAN THREE YEARS.

A lender allows housing costs of up to 28% of gross monthly income. A buyer earns $9,000 a month. What is the largest monthly housing payment allowed?

1. $2,250
2. $2,400
3. $2,520 ✓
4. $2,800

Why: DRE Reference Book ch. 26, percentage formula (PERCENTAGE = RATE X BASE): 28% x $9,000 = $2,520. The 28% figure is the lender's stated ratio in the question.

In New York, to what kind of property can a tenancy by the entirety apply?

1. Any property, real or personal, that a married couple owns.
2. Real property only; never co-op shares or a proprietary lease.
3. Real property, and co-op shares with their proprietary lease. ✓
4. Only a principal residence occupied by both of the spouses.

Why: Estates, Powers and Trusts Law 6-2.1(4): tenancy by the entirety exists ONLY AS TO REAL PROPERTY AND, ON AND AFTER JANUARY FIRST, NINETEEN HUNDRED NINETY-SIX, AS TO THE SHARES OF STOCK OF A COOPERATIVE APARTMENT CORPORATION ... TOGETHER WITH THE APPURTENANT PROPRIETARY LEASE.

Which secondary-market entity is an agency of HUD, working mainly with social housing programs?

1. Ginnie Mae. ✓
2. Fannie Mae.
3. Freddie Mac.
4. The Federal Reserve.

Why: DRE Reference Book ch. 27: the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION is AN AGENCY OF HUD, WHICH FUNCTIONS IN THE SECONDARY MORTGAGE MARKET, PRIMARILY IN SOCIAL HOUSING PROGRAMS ('Ginnie Mae').

An owner deeds her house to her brother for the life of their mother. What estate does the brother hold?

1. A life estate measured by another person's life. ✓
2. A fee simple that will pass to the brother's heirs.
3. An estate for years ending on a fixed calendar date.
4. A remainder that begins when the mother has died.

Why: DRE Reference Book ch. 27: a LIFE ESTATE is held for the duration of the life of some certain person and MAY BE LIMITED BY THE LIFE OF THE PERSON HOLDING IT OR BY THE LIFE OF SOME OTHER PERSON; an ESTATE FOR LIFE may be held for THE LIFE OR LIVES OF ANOTHER.

The board of managers' lien for unpaid common charges ranks ahead of all other liens EXCEPT which?

1. A second mortgage and any judgment docketed earlier.
2. Tax liens, a first mortgage and some agency mortgages. ✓
3. Mechanic's liens filed before the board's own notice.
4. None at all; it ranks ahead of every other lien.

Why: Real Property Law 339-z: the lien is PRIOR TO ALL OTHER LIENS EXCEPT ONLY (i) LIENS FOR TAXES ON THE UNIT in favor of a taxing unit, (ii) ALL SUMS UNPAID ON A FIRST MORTGAGE OF RECORD, and (iii) sums on certain subordinate mortgages held by named state and city housing agencies.

In a mortgage loan, who is the mortgagor?

1. The lender who takes the mortgage.
2. The borrower who gives the mortgage. ✓
3. The servicer who collects the payments.
4. The investor who buys the loan.

Why: DRE Reference Book ch. 27: the MORTGAGOR is ONE WHO GIVES A MORTGAGE ON HIS OR HER PROPERTY TO SECURE A LOAN ... A BORROWER; the MORTGAGEE is the lender.

A town lets a developer build extra units if it adds a public park. What system is that?

1. Incentive zoning. ✓
2. Cluster development.
3. A use variance.
4. Spot zoning.

Why: Town Law 261-b(1): INCENTIVE ZONING is the system by which specific incentives or bonuses (adjustments to density, height and the like) are granted in exchange for COMMUNITY BENEFITS OR AMENITIES such as OPEN SPACE ... PARKS, or affordable housing.

A developer leases only the land for 99 years and builds an office tower on it. What kind of lease is that?

1. A sandwich lease.
2. A percentage lease.
3. A ground lease. ✓
4. A gross lease.

Why: DRE Reference Book ch. 27: a GROUND LEASE is AN AGREEMENT FOR THE USE OF THE LAND ONLY, SOMETIMES SECURED BY IMPROVEMENTS PLACED ON THE LAND BY THE USER.

A salesperson leaves her broker on Friday. When may she next perform licensed real estate work?

1. Once she has become associated with another licensed broker. ✓
2. Immediately, because her license runs for its full two years.
3. After thirty days, provided she completes her agency hours.
4. Once the Department reissues her license as an associate broker.

Why: Real Property Law 442-b: the broker must forthwith notify the Department of State, and NO REAL ESTATE SALESPERSON SHALL PERFORM ANY ACT WITHIN ANY OF THE PROHIBITIONS OF THIS ARTICLE FROM AND AFTER THE TERMINATION ... UNTIL THEY THEREAFTER SHALL HAVE BECOME ASSOCIATED WITH A LICENSED REAL ESTATE BROKER.

Who prosecutes criminal violations of New York's real estate license law?

1. The attorney general, for the state. ✓
2. The county district attorney.
3. The Department of State's own counsel's office.
4. The State Real Estate Board, through a hearing.

Why: Real Property Law 442-e: any violation is A MISDEMEANOR, and CRIMINAL ACTIONS FOR VIOLATIONS OF THIS ARTICLE SHALL BE PROSECUTED BY THE ATTORNEY GENERAL, OR HIS DEPUTY, IN THE NAME OF THE PEOPLE OF THE STATE.

How does an appraiser get from potential gross income to effective gross income?

1. Deduct an allowance for vacancy and collection loss. ✓
2. Deduct the operating expenses and the property taxes.
3. Deduct the mortgage payments and the depreciation.
4. Deduct the reserves for replacement of fixtures.

Why: DRE Reference Book ch. 15: DEDUCT FROM POTENTIAL GROSS INCOME AN ANNUAL ALLOWANCE FOR VACANCY FACTOR AND RENT COLLECTION LOSS. THE REMAINDER IS CALLED THE 'EFFECTIVE' GROSS INCOME; operating expenses are then deducted to reach net operating income.

What does New York require for a valid formal will?

1. Signing at the start and one witness who is also a notary.
2. Signing anywhere, with two witnesses present on the same day.
3. Signing at the end and filing it with the county clerk.
4. Signing at the end, with two witnesses within 30 days. ✓

Why: Estates, Powers and Trusts Law 3-2.1(a): the will SHALL BE SIGNED AT THE END THEREOF by the testator, and THERE SHALL BE AT LEAST TWO ATTESTING WITNESSES, WHO SHALL, WITHIN ONE THIRTY DAY PERIOD, BOTH ATTEST THE TESTATOR'S SIGNATURE.

Two brokers agree that one will take listings only north of Main Street and the other only south of it. Under the Donnelly Act, what is that agreement?

1. Lawful, if neither broker is a monopoly alone.
2. Lawful, if both brokers record it with DOS.
3. Void only once a third broker has objected.
4. Illegal and void, as it restrains competition. ✓

Why: General Business Law 340(1): an arrangement WHEREBY COMPETITION OR THE FREE EXERCISE OF ANY ACTIVITY IN THE CONDUCT OF ANY BUSINESS ... OR IN THE FURNISHING OF ANY SERVICE IN THIS STATE IS OR MAY BE RESTRAINED is AGAINST PUBLIC POLICY, ILLEGAL AND VOID. Dividing a market between competitors restrains competition between them.

A homeowner signed an 'exclusive agency' listing. A different broker, not a co-operating agent of the listing firm, finds the buyer. What does the required explanation warn her?

1. She will owe a commission only to the broker who found the buyer.
2. She will owe nothing, since she did not sign an exclusive right.
3. She will owe her own broker half and the finding broker half.
4. She will owe a commission to both that broker and her own broker. ✓

Why: 19 NYCRR 175.24(b): an EXCLUSIVE AGENCY listing means that if the owner finds a buyer, no commission is owed, HOWEVER, IF ANOTHER BROKER FINDS A BUYER, YOU WILL OWE A COMMISSION TO BOTH THE SELLING BROKER AND YOUR PRESENT BROKER.

What must condominium by-laws say about the terms of the board of managers?

1. At least one-half of the members' terms expire each year.
2. At least one-third of the members' terms expire each year. ✓
3. Every member's term expires at each annual meeting.
4. No member may serve more than two consecutive terms.

Why: Real Property Law 339-v(1)(a): the by-laws must provide for the election of a board of managers AND THAT THE TERMS OF AT LEAST ONE-THIRD OF THE MEMBERS OF SUCH BOARD SHALL EXPIRE ANNUALLY.

Which is a good working definition of market value?

1. The most probable open-market price between willing parties. ✓
2. The price the owner paid, plus the cost of later improvements made.
3. The assessed value on the roll, adjusted for the equalisation rate.
4. Replacement cost plus land.

Why: DRE Reference Book ch. 15: a good working definition of MARKET VALUE is THE MOST PROBABLE PRICE THE PROPERTY WOULD BRING IF FREELY OFFERED ON THE OPEN MARKET WITH BOTH A WILLING BUYER AND A WILLING SELLER.

A first mortgagee agrees to let a new construction loan take priority over its own mortgage. What is that document?

1. A subordination agreement. ✓
2. A satisfaction of mortgage.
3. An estoppel certificate.
4. An assignment of mortgage.

Why: DRE Reference Book ch. 27: a SUBORDINATION AGREEMENT is AN AGREEMENT BY THE HOLDER OF AN ENCUMBRANCE AGAINST REAL PROPERTY TO PERMIT THAT CLAIM TO TAKE AN INFERIOR POSITION TO OTHER ENCUMBRANCES AGAINST THE PROPERTY.

What is the main health risk the EPA links to breathing radon?

1. Lung cancer. ✓
2. Lead poisoning.
3. Asthma attacks.
4. Skin disease.

Why: EPA, A Citizen's Guide to Radon: RADON IS A CANCER-CAUSING, RADIOACTIVE GAS ... WHEN YOU BREATHE AIR CONTAINING RADON, YOU CAN GET LUNG CANCER; it is estimated to cause about 21,000 lung cancer deaths a year.

A buyer is under contract for a house built in 1965. What must the seller allow before the buyer is bound, unless the parties agree otherwise or the buyer waives it?

1. A 10-day period for a lead-based paint risk assessment. ✓
2. A 30-day period to arrange a radon test of the basement.
3. A 5-day period to cancel after reading the disclosures.
4. A 3-day period to obtain an asbestos survey of the house.

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 for lead-based paint; the buyer may waive it in writing (745.110(b)). Target housing is housing built BEFORE 1978 (745.103).

Which of these is a protected class under New York's Human Rights Law for housing?

1. Political party.
2. Credit score.
3. Military status. ✓
4. Occupation.

Why: Executive Law 296(5)(a)(1) bars housing discrimination because of RACE, CREED, COLOR, NATIONAL ORIGIN, CITIZENSHIP OR IMMIGRATION STATUS, SEXUAL ORIENTATION, GENDER IDENTITY OR EXPRESSION, MILITARY STATUS, SEX, AGE, DISABILITY, MARITAL STATUS, STATUS AS A VICTIM OF DOMESTIC VIOLENCE, LAWFUL SOURCE OF INCOME OR FAMILIAL STATUS.

An owner wants to build a garage 5 feet from the side line where zoning requires 10. What does he need?

1. A use variance.
2. An area variance. ✓
3. A special use permit.
4. A rezoning of the lot.

Why: Town Law 267(1)(b): an 'AREA VARIANCE' is the authorization FOR THE USE OF LAND IN A MANNER WHICH IS NOT ALLOWED BY THE DIMENSIONAL OR PHYSICAL REQUIREMENTS of the zoning regulations, such as setbacks.

A homeowner finds mold covering about 25 square feet after a flood. What does the EPA guide suggest?

1. Clean it herself; any area can be handled without help.
2. Paint over it with a mold-resistant paint and leave it.
3. Consult further EPA guidance; it is over 10 sq ft. ✓
4. Ignore it until the area has fully dried out by itself.

Why: EPA, A Brief Guide to Mold, Moisture and Your Home: if the moldy area is LESS THAN ABOUT 10 SQUARE FEET, in most cases you can handle the job yourself; IF THERE HAS BEEN A LOT OF WATER DAMAGE, AND/OR MOLD GROWTH COVERS MORE THAN 10 SQUARE FEET, CONSULT the EPA's further guidance.

Under the alternative veterans' exemption, what is the basic exemption for a qualifying veteran's residence?

1. 15% of assessed value, capped. ✓
2. 50% of assessed value, with no cap.
3. The full assessed value of the home.
4. $5,000 of assessed value, flat.

Why: Real Property Tax Law 458-a(2)(a): QUALIFYING RESIDENTIAL REAL PROPERTY SHALL BE EXEMPT FROM TAXATION TO THE EXTENT OF FIFTEEN PERCENT OF THE ASSESSED VALUE, not exceeding $12,000 (adjusted by the equalization rate) or a local maximum; combat-zone service adds 10% and service-connected disability adds more.

A broker wants to accept the services of another broker's salesperson to canvass a neighborhood. What does the regulation require?

1. The other broker must know of the arrangement. ✓
2. The salesperson must first give up her license.
3. The Department of State must approve it in advance.
4. Nothing; salespersons may freelance as they wish.

Why: 19 NYCRR 175.13: A REAL ESTATE BROKER SHALL NOT ACCEPT THE SERVICES OF ANY SALESPERSON OR EMPLOYEE IN THE ORGANIZATION OF ANOTHER REAL ESTATE BROKER WITHOUT THE KNOWLEDGE OF THE BROKER, nor offer anything of value to influence them without that broker's knowledge.

A shareholder sells her co-op shares and assigns her proprietary lease to a buyer. Does the state real estate transfer tax apply?

1. No; a transfer of stock is not a conveyance of realty.
2. Only if the buyer takes over the building's mortgage.
3. Only on the sponsor's first sale, never on a resale.
4. Yes; Tax Law 1405-B applies it to co-op share transfers. ✓

Why: Tax Law 1405-B(a): the transfer tax SHALL APPLY TO (1) THE ORIGINAL CONVEYANCE OF SHARES OF STOCK IN A COOPERATIVE HOUSING CORPORATION ... by the cooperative corporation or sponsor, AND (2) THE SUBSEQUENT CONVEYANCE OF SUCH STOCK ... in connection with the grant or transfer of a proprietary leasehold by the owner. On a resale of an individual unit, liens remaining on the shares are excluded from the consideration.

A lease sets rents that change at stated times, sometimes based on periodic appraisals. What kind of lease is it?

1. A net lease.
2. A graduated lease. ✓
3. A ground lease.
4. A sublease of the space.

Why: DRE Reference Book ch. 27: a GRADUATED LEASE PROVIDES FOR A VARYING RENTAL RATE, OFTEN BASED UPON FUTURE DETERMINATION; SOMETIMES RENT IS BASED UPON RESULT OF PERIODICAL APPRAISALS.

Under New York's real estate transfer tax, who files the transfer tax return for a conveyance?

1. The grantor alone.
2. The grantee's lender.
3. The grantor and grantee jointly. ✓
4. The county clerk.

Why: Tax Law 1409(a)(1): A JOINT RETURN SHALL BE FILED BY BOTH THE GRANTOR AND THE GRANTEE FOR EACH CONVEYANCE WHETHER OR NOT A TAX IS DUE THEREON (apart from certain nominal public utility easements).

A seller's son signs a contract of sale 'for my father' with only verbal permission. What is missing?

1. Nothing; any family member may sign for an owner.
2. The contract must also be witnessed by a notary.
3. Written authority for the son to sign it for him. ✓
4. The buyer's broker must countersign the contract.

Why: General Obligations Law 5-703(2): the writing must be subscribed by the party to be charged OR BY HIS LAWFUL AGENT THEREUNTO AUTHORIZED BY WRITING.

A lien that attaches to all of a debtor's property, rather than to one parcel, is known as what?

1. A specific lien.
2. A general lien. ✓
3. A voluntary lien.
4. A subordinate lien.

Why: DRE Reference Book ch. 27: a GENERAL LIEN is A LIEN ON ALL THE PROPERTY OF A DEBTOR. A mortgage, by contrast, makes specific property security for a debt, which is how the glossary describes a LIEN generally.

A broker wants to pay a $500 referral fee to a friend, an unlicensed accountant, who sent him a buyer. May he?

1. Yes, if the buyer agrees to the payment in writing first.
2. Yes, if the fee is under ten percent of the commission.
3. No; only his salespersons or licensed or out-of-state brokers may. ✓
4. Yes, if the payment is routed through a salesperson.

Why: Real Property Law 442(1): no broker shall pay any part of a fee or commission to any person UNLESS SUCH A PERSON BE A DULY LICENSED REAL ESTATE SALESPERSON REGULARLY ASSOCIATED WITH SUCH BROKER OR A DULY LICENSED REAL ESTATE BROKER OR A PERSON REGULARLY ENGAGED IN THE REAL ESTATE BROKERAGE BUSINESS IN A STATE OUTSIDE OF NEW YORK.

A private lender knowingly charges 30% a year interest on a loan. Under the Penal Law, what offense is that?

1. Civil usury only, making the loan voidable by the borrower.
2. Criminal usury in the second degree, a class E felony. ✓
3. A violation, punishable by a fine of up to $250.
4. No offense, if the borrower agreed to the rate in writing.

Why: Penal Law 190.40: a person who, not being authorized by law, knowingly charges interest AT A RATE EXCEEDING TWENTY-FIVE PER CENTUM PER ANNUM is guilty of CRIMINAL USURY IN THE SECOND DEGREE ... A CLASS E FELONY.

A neighbor's new swimming pool extends two feet across the property line. What is that?

1. An easement.
2. A party wall.
3. An encroachment. ✓
4. An appurtenance.

Why: DRE Reference Book ch. 27: an ENCROACHMENT is AN UNLAWFUL INTRUSION ONTO ANOTHER'S ADJACENT PROPERTY BY IMPROVEMENTS TO REAL PROPERTY, E.G. A SWIMMING POOL BUILT ACROSS A PROPERTY LINE.

A listing agent tells the seller of the lead disclosure duties, but the seller hides known lead paint from both the agent and the buyer. Is the agent liable under the rule?

1. Yes; the agent is strictly liable for every nondisclosure.
2. No; an agent who informed the seller is not liable for it. ✓
3. Yes, unless the agent also tested the house for lead paint.
4. Only if the buyer has a child living in the house.

Why: 40 CFR 745.115: each agent must INFORM THE SELLER OR LESSOR OF HIS/HER OBLIGATIONS and ensure compliance; IF THE AGENT HAS COMPLIED WITH PARAGRAPH (A)(1) ... THE AGENT SHALL NOT BE LIABLE FOR THE FAILURE TO DISCLOSE ... LEAD-BASED PAINT ... KNOWN BY A SELLER and not disclosed to the agent.

A private owner sells her single-family home herself, without a broker and without discriminatory advertising. Which federal law can still reach her refusal to sell to a buyer because of race?

1. Only the Fair Housing Act's single-family rules.
2. The Civil Rights Act of 1866, 42 U.S.C. 1982. ✓
3. No law, because the sale is fully exempt.
4. Only the Interstate Land Sales Full Disclosure Act.

Why: 42 U.S.C. 1982: ALL CITIZENS OF THE UNITED STATES SHALL HAVE THE SAME RIGHT ... AS IS ENJOYED BY WHITE CITIZENS THEREOF TO INHERIT, PURCHASE, LEASE, SELL, HOLD, AND CONVEY REAL AND PERSONAL PROPERTY, with no exemption. The Fair Housing Act's single-family exemption in 3603(b)(1) does not affect it.

A salesperson earned a $9,000 commission at a 3% rate on her side of a sale. What was the sale price?

1. $270,000
2. $300,000 ✓
3. $330,000
4. $1,000,000

Why: DRE Reference Book ch. 26: SALE PRICE = COMMISSION ÷ RATE (S = C ÷ R). $9,000 ÷ 0.03 = $300,000.

Who is primarily liable to pay New York's real estate transfer tax under Tax Law 1404?

1. The grantor; the grantee if the grantor fails to pay. ✓
2. The grantee, with the grantor liable if the grantee fails to pay.
3. The grantor and grantee equally, whatever the contract provides.
4. The lender, on recording.

Why: Tax Law 1404(a): THE REAL ESTATE TRANSFER TAX ... SHALL BE PAID BY THE GRANTOR; if the grantor fails to pay or is exempt, THE GRANTEE SHALL HAVE THE DUTY TO PAY THE TAX, and it becomes joint and several. The additional (mansion) tax under 1402-a is the reverse: the grantee pays.