Virginia Real Estate Salesperson License, Practice Exams

A buyer and seller agree on a separate price for the seller's furniture, which is sold with the house. How does the Closing Disclosure handle it?

1. It is folded into the contract sales price of the property
2. It is shown apart from the contract sales price of the property ✓
3. It is left off, as personal property is not disclosed at all
4. It is shown as a seller credit toward the buyer's closing costs

Why: 12 CFR 1026.38(j)(1)(ii) and (iii) require the contract sales price to exclude tangible personal property that the parties priced separately, and to show that price on its own line, labeled Sale Price of Any Personal Property Included in Sale. The seller's summary under 1026.38(k)(1) does the same.

A buyer inspects an old farmhouse and buys it. Under the traditional doctrine of caveat emptor, when does the buyer not bear the risk of what he failed to discover?

1. When the price was above market value
2. When the buyer later finds the roof worn
3. When the seller made a misrepresentation ✓
4. When the deed given was a quitclaim

Why: Reference Book chapter 27 defines caveat emptor, let the buyer beware: the buyer must examine the property and buy at his or her own risk, absent misrepresentation. Modern nondisclosure law narrows the doctrine further (chapter 10), but under the doctrine itself misrepresentation is the stated exception; price and the form of deed are not.

A broker who is also licensed to sell property insurance offers a buyer-client a homeowner's policy. Which is consistent with the broker's duties to the client?

1. Adding a margin above the open-market premium
2. Making the policy a condition of the purchase
3. Keeping the insurance role from the buyer
4. Leaving the client free to pick her own insurer ✓

Why: Reference Book chapter 19 says a broker acting as an insurance agent must eliminate any conflicts of interest, secure competitive rates and charge the client no more than she could obtain in the open market, and that the client should always have the opportunity of selecting her own source of insurance. Conditioning the purchase on the policy or hiding the dual role would breach those duties.

Among its early membership guidelines, what did the Institute of Real Estate Management require member firms to carry on employees whose duties involved handling funds?

1. A key-person life policy.
2. A satisfactory fidelity bond. ✓
3. A general liability rider.
4. An errors and omissions policy.

Why: DRE Reference Book ch. 22: to be a member, a firm had to certify it would CARRY A SATISFACTORY FIDELITY BOND ON ALL OF ITS EMPLOYEES WHOSE DUTIES INVOLVED THE HANDLING OF FUNDS, and also MAINTAIN SEPARATE BANK ACCOUNTS FOR ITS OWN FUNDS AND FOR THE FUNDS OF ITS CLIENTS, WITH NO COMMINGLING.

A comparable sold for $415,000. It has a garage the subject lacks, worth $8,000, and lacks an extra bathroom the subject has, worth $15,000. What is the comparable's adjusted price?

1. $392,000
2. $400,000
3. $408,000
4. $422,000 ✓

Why: Reference Book chapter 15: the adjustment is always made to the comparable; subtract where the comparable is superior and add where it is inferior. $415,000 - $8,000 (garage) + $15,000 (bathroom) = $422,000. Reversing both signs gives $408,000.

Which map does the Virginia disclosure statement point buyers to when checking a locality's radon classification?

1. The EPA's Map of Radon Zones (Zone 1 or Zone 2). ✓
2. The FEMA flood insurance rate map for the county.
3. The locality's official zoning map for the parcel.
4. The state health department's map of septic soils.

Why: Code of Virginia 55.1-703 B 14: THE OWNER MAKES NO REPRESENTATIONS WITH RESPECT TO WHETHER THE PROPERTY IS LOCATED IN A LOCALITY CLASSIFIED AS ZONE 1 OR ZONE 2 BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY'S (EPA) MAP OF RADON ZONES; the due diligence listed includes REVIEWING THE EPA'S MAP OF RADON ZONES and ORDERING A RADON INSPECTION.

A tenant complained to the building official about a housing code violation, but the violation was caused primarily by the tenant's own lack of reasonable care. May the landlord end the tenancy and seek possession?

1. No; any termination after a complaint is retaliatory.
2. No; the landlord must wait six months after the complaint.
3. Yes; the retaliation rule does not bar it in that case. ✓
4. Only if the tenant also sued the landlord over the issue.

Why: Code of Virginia 55.1-1258 C: NOTWITHSTANDING SUBSECTIONS A AND B, A LANDLORD MAY TERMINATE THE RENTAL AGREEMENT ... AND BRING AN ACTION FOR POSSESSION IF: 1. VIOLATION OF THE APPLICABLE BUILDING OR HOUSING CODE WAS CAUSED PRIMARILY BY LACK OF REASONABLE CARE BY THE TENANT, AN AUTHORIZED OCCUPANT, OR A GUEST OR INVITEE OF THE TENANT.

Does the first-sale exemption excuse a builder from the military air installation disclosure?

1. No; the military air installation disclosure still applies. ✓
2. Yes; a first sale is exempt from every disclosure in the act.
3. Yes, if the builder gives the buyer a home warranty instead.
4. No, but only for homes within one mile of the runway.

Why: Code of Virginia 55.1-702 A 9 exempts TRANSFERS INVOLVING THE FIRST SALE OF A DWELLING, PROVIDED THAT THIS EXEMPTION SHALL NOT APPLY TO THE DISCLOSURES REQUIRED BY § 55.1-704, the military air installation disclosure.

Under the bankers' 12%-30-day method, what is the interest on $6,540 at 12% for 30 days?

1. $6.54
2. $65.40 ✓
3. $654.00
4. $6,540.00

Why: DRE Reference Book ch. 26: TO FIND INTEREST ON ANY PRINCIPAL AMOUNT FOR 30 DAYS AT 12%, OR FOR 60 DAYS AT 6%, SIMPLY MOVE THE DECIMAL POINT IN THE PRINCIPAL AMOUNT TWO PLACES TO THE LEFT. $6,540 becomes $65.40.

A salesperson's license expired eight months ago. What is her position?

1. She may reinstate it with the reinstatement fee. ✓
2. She must apply again as a new applicant and retest.
3. She may renew it at the ordinary renewal fee.
4. She may keep working until she renews it.

Why: Subsection C of 18VAC135-20-140: A LICENSE MAY BE REINSTATED FOR UP TO ONE YEAR FOLLOWING THE EXPIRATION DATE WITH PAYMENT OF THE REINSTATEMENT FEE. ... AFTER ONE YEAR, THE LICENSE MAY NOT BE REINSTATED UNDER ANY CIRCUMSTANCES AND THE APPLICANT MUST MEET ALL CURRENT EDUCATIONAL AND EXAMINATION REQUIREMENTS AND APPLY AS A NEW APPLICANT. Subsection D bars any licensed activity on an expired license.

After receiving late disclosures, a buyer wants to waive her right to terminate the contract. How must the waiver be made?

1. Orally to the listing agent, who notes it in the file.
2. By a waiver clause printed in the purchase contract itself.
3. In a signed writing separate from the purchase contract. ✓
4. By a notarized letter filed with the Real Estate Board.

Why: Code of Virginia 55.1-709 B (vi): the right ends on THE EXECUTION BY THE PURCHASER AFTER RECEIVING THE DISCLOSURE STATEMENT ... OF A WRITTEN WAIVER OF THE PURCHASER'S RIGHT OF TERMINATION UNDER THIS CHAPTER CONTAINED IN A WRITING SEPARATE FROM THE REAL ESTATE PURCHASE CONTRACT.

A salesperson misses her renewal deadline by two months and must reinstate her license. How much more does she pay than the ordinary salesperson renewal fee?

1. $20.
2. $35.
3. $55. ✓
4. $80.

Why: 18VAC135-20-15: the SALESPERSON RENEWAL fee is $100 and the SALESPERSON REINSTATEMENT fee is $155; 18VAC135-20-140 B requires THE APPLICABLE REINSTATEMENT FEE when renewal is not completed WITHIN 30 DAYS OF THE EXPIRATION DATE. Working: $155 - $100 = $55.

A buyer assigns her rights under a purchase contract to her brother, who agrees to perform. The seller has not released her. Is she free of the contract?

1. Yes; an assignment always ends her liability
2. Yes, as soon as the seller is given notice
3. No, because a purchase contract is void if assigned
4. No; an assignor stays liable unless released ✓

Why: Reference Book chapter 6 states that an assignor may transfer the benefit of a contract but cannot escape the burden by assignment; even if the assignee assumes the obligation, the assignor remains secondarily liable unless the obligee releases her. Substituting a new obligation with intent to end the old one is a novation.

Before buying, a buyer sees a family living in a house the seller calls vacant. The family has an unrecorded lease with an option to buy. Does the buyer take subject to their rights?

1. No; an unrecorded lease binds no one but the seller
2. No, because an option must be recorded to be enforced
3. Yes, as to the lease, but the option is cut off by sale
4. Yes; their possession put the buyer on inquiry ✓

Why: Reference Book chapter 5 states that possession of land by someone other than the seller is actual notice to an intending buyer sufficient to impose a duty to inquire, and that the occupant's agreement need not be recorded to affect title. The recording laws do not protect a buyer against what an inspection would disclose.

A tenant's licensee shows the same apartment her client likes to another prospective tenant she also represents. Has she breached a duty to her first client?

1. Yes; she must drop one of the two tenants.
2. Yes, unless both tenants consent in writing.
3. No; the statute says this is no breach. ✓
4. Only if the landlord pays her a bonus.

Why: Code of Virginia 54.1-2134 D: A LICENSEE ENGAGED BY A TENANT DOES NOT BREACH ANY DUTY OR OBLIGATION TO THE TENANT BY SHOWING PROPERTIES IN WHICH THE TENANT IS INTERESTED TO OTHER PROSPECTIVE TENANTS, WHETHER AS CLIENTS OR CUSTOMERS.

Buyer and seller sign instructions canceling their escrow but sign nothing about the purchase contract. Later the buyer sues for specific performance. Is the contract necessarily ended?

1. Yes; canceling the escrow always rescinds the contract.
2. Yes, because the escrow holder has returned all of the funds.
3. No; canceling escrow may not rescind the purchase contract. ✓
4. No, but the buyer may now recover only the earnest deposit.

Why: DRE Reference Book ch. 8: CANCELLATION OF ESCROW MAY NOT ALSO CANCEL OR RESCIND A PURCHASE AGREEMENT/CONTRACT ... IF A PURCHASE AGREEMENT/CONTRACT IS NOT CANCELED OR RESCINDED ALONG WITH THE CANCELING OF THE SALE ESCROW, EITHER PRINCIPAL ... MAY RETAIN THE RIGHT TO SPECIFIC PERFORMANCE OF THE AGREEMENT/CONTRACT OR FOR THE RECOVERY OF DAMAGES.

A duplex used as a comparable sold for $360,000. Its old leases brought in $1,500 a month in total, but market rent for it is $2,000 a month. What monthly gross rent multiplier should the appraiser derive from the sale?

1. 120.
2. 150.
3. 180. ✓
4. 240.

Why: DRE Reference Book ch. 15, Gross Rent and Gross Income Multipliers: IF THE PROPERTY SOLD WITH RENTS NOT AT MARKET RATES, THAN AN EFFECTIVE GRM OR GIM SHOULD BE CALCULATED BY USING MARKET RENTAL INSTEAD OF ACTUAL (NON-MARKET) RENTS. $360,000 ÷ $2,000 = 180. Dividing by the actual $1,500 rent gives 240, which overstates the multiplier.

A small brokerage calls homeowners in only three area codes. Under the Telemarketing Sales Rule, what must it pay for access to national registry data for them?

1. The annual per-area-code fee for each one of the three area codes.
2. Nothing, since the first five area codes are free of charge. ✓
3. A share of a larger firm's fee under a cost-sharing plan.
4. The maximum annual fee, which is charged to each seller calling.

Why: 16 CFR 310.8(c): THERE SHALL BE NO CHARGE TO ANY PERSON FOR ACCESSING THE FIRST FIVE AREA CODES OF DATA, and NO PERSON MAY PARTICIPATE IN ANY ARRANGEMENT TO SHARE THE COST OF ACCESSING THE NATIONAL DO NOT CALL REGISTRY.

After signing a complete written purchase contract, a buyer says the seller orally promised beforehand to leave the patio furniture. The writing says nothing about it. Under the parol evidence rule, what follows?

1. The oral promise generally cannot be used to add to the writing. ✓
2. The oral promise controls, as it was made before the writing.
3. The contract is void for leaving out a term the parties agreed.
4. The buyer may prove the promise if two witnesses heard it.

Why: DRE Reference Book ch. 6: THE PAROL EVIDENCE RULE PROHIBITS THE INTRODUCTION OF ANY EXTRINSIC EVIDENCE (ORAL OR WRITTEN) TO VARY OR ADD TO THE TERMS OF AN INTEGRATED WRITTEN INSTRUMENT; the execution of a contract in writing supersedes the negotiations that preceded it.

An applicant whose child uses a wheelchair asks to widen the bathroom doorway of a rental unit at her own expense. The landlord agrees, but only if she pays to narrow it again when she moves out. Is that condition lawful?

1. Yes, a landlord may always require full restoration
2. Yes, because the tenant is paying the whole cost of the modification
3. Not usually, since a wider door does not hinder later use ✓
4. No, because the landlord must pay for the widening

Why: 24 CFR 100.203 requires a landlord to permit reasonable modifications at the handicapped person's expense and lets the landlord condition permission on restoring the interior where that is reasonable. Its second example holds that the landlord may not, in usual circumstances, require the doorway to be narrowed again, because a wider door does not interfere with the landlord's or the next tenant's use.

An owner passes on flood-zone information given to her by a county office, and it proves wrong. She did not know it was wrong. Is she liable under the act?

1. No; she lacked actual knowledge and was not grossly negligent. ✓
2. Yes; the owner is strictly liable for all information she delivers.
3. Yes, but only for half of the buyer's resulting loss.
4. No, but only if she also carried title insurance.

Why: Code of Virginia 55.1-710 A: the owner SHALL NOT BE LIABLE FOR ANY ERROR, INACCURACY, OR OMISSION OF ANY INFORMATION DELIVERED PURSUANT TO THIS CHAPTER IF (I) THE ERROR, INACCURACY, OR OMISSION WAS NOT WITHIN THE ACTUAL KNOWLEDGE OF THE OWNER OR WAS BASED ON INFORMATION PROVIDED BY PUBLIC AGENCIES ..., AND (II) THE OWNER WAS NOT GROSSLY NEGLIGENT IN OBTAINING THE INFORMATION FROM A THIRD PARTY AND TRANSMITTING IT.

A party to a contract has promised to refrain from a certain act and is about to do it anyway. Which equitable remedy may enforce a promise to forbear?

1. Reformation of the contract.
2. Rescission of the contract.
3. An injunction against the act. ✓
4. A novation of the contract.

Why: DRE Reference Book ch. 6: GENERALLY, IF DOLLAR DAMAGES AT LAW CANNOT PROVIDE AN ADEQUATE REMEDY, EQUITY WILL TAKE JURISDICTION AND ORDER THE DEFENDANT TO PERFORM THE CONTRACT. SOMETIMES, EQUITY MAY ALSO ENFORCE A PROMISE TO FORBEAR FROM DOING SOMETHING BY GRANTING AN INJUNCTION. Reformation corrects a writing, rescission unwinds the contract and a novation substitutes a new obligation; none of them stops the act.

How many hours of continuing education must an active Virginia salesperson complete in each later licensing term?

1. 8 hours.
2. 16 hours. ✓
3. 24 hours.
4. 30 hours.

Why: Code of Virginia 54.1-2105.03 A 2 and 18VAC135-20-101 A 1: ACTIVE SALESPERSONS ARE REQUIRED TO SATISFACTORILY COMPLETE A COURSE OF NOT LESS THAN A TOTAL OF 16 ... HOURS DURING EACH LICENSING TERM, 11 of them in required topics. Brokers need 24.

An investor bought a house at a foreclosure sale and, 60 days after her closing, signs a contract to resell it to a buyer using an FHA-insured loan. Is the property eligible?

1. Yes, if a second appraisal supports the higher price.
2. Yes, since the seller is the owner of record already.
3. No; a resale within 90 days of acquisition is ineligible. ✓
4. No; an FHA resale must wait at least a full 12 months.

Why: 24 CFR 203.37a(b)(2): IF THE RE-SALE DATE IS 90 DAYS OR LESS FOLLOWING THE DATE OF ACQUISITION BY THE SELLER, THE PROPERTY IS NOT ELIGIBLE FOR A MORTGAGE TO BE INSURED BY FHA. Between 91 and 180 days a second appraisal may be required for a large price increase.

A regulated lender requires flood insurance on a residential loan it services with an escrow account. How are the flood premiums generally collected?

1. With each loan payment, into the escrow account. ✓
2. Yearly, paid by the borrower directly to the insurer.
3. At closing only, for the full life of the loan.
4. By the servicer, and only after the policy has lapsed.

Why: 42 U.S.C. 4012a(d)(1)(A): ALL PREMIUMS AND FEES FOR FLOOD INSURANCE ... SHALL BE PAID TO THE REGULATED LENDING INSTITUTION OR SERVICER ... WITH THE SAME FREQUENCY AS PAYMENTS ON THE LOAN ARE MADE, and the lender SHALL DEPOSIT SUCH PREMIUMS AND FEES IN AN ESCROW ACCOUNT ON BEHALF OF THE BORROWER, subject to listed exceptions.

A seller's agent emails the required disclosures to the buyer. What must the sender keep for this to count as electronic delivery under the disclosure act?

1. A paper copy of the email, signed by the buyer in blue ink.
2. Sufficient proof of delivery, such as an electronic receipt. ✓
3. Nothing, since an email is valid delivery with no proof at all.
4. A notarized affidavit from the buyer's lender or attorney.

Why: Code of Virginia 55.1-700: ELECTRONIC DELIVERY ... MEANS SENDING THE REQUIRED DISCLOSURES VIA THE INTERNET, PROVIDED THAT THE SENDER RETAINS SUFFICIENT PROOF OF THE ELECTRONIC DELIVERY, WHICH MAY BE AN ELECTRONIC RECEIPT OF DELIVERY, A CONFIRMATION THAT THE NOTICE WAS SENT BY FACSIMILE, OR A CERTIFICATE OF SERVICE PREPARED BY THE SENDER.

An appraiser finds one highest and best use for a site as though vacant and another for the property as improved. What is then done?

1. The use as though vacant is adopted in every case.
2. They are reconciled into one final determination. ✓
3. The existing improved use is adopted in every case.
4. The values indicated by the two uses are averaged.

Why: Reference Book chapter 15: "There may be two highest and best uses, one with the site vacant and the other as improved. These must be reconciled into a final highest and best use determination." Reconciliation is a judgment, so neither use is automatically preferred and the two are not simply averaged.

A buyer asks the seller's agent whether settlement will be handled by an attorney or a nonattorney settlement agent. Does the article require the agent to disclose that?

1. Yes, in the listing agreement.
2. Yes, in the brokerage disclosure.
3. Yes, within 3 days of ratification.
4. No, it does not require it. ✓

Why: Code of Virginia 54.1-2131 F: NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE A LICENSEE TO DISCLOSE WHETHER SETTLEMENT SERVICES UNDER CHAPTER 10 ... WILL BE PROVIDED BY AN ATTORNEY OR A NONATTORNEY SETTLEMENT AGENT.

May a commercial tenant end its lease for frustration of purpose because a change in conditions has made its business far less profitable?

1. Yes; any material loss of business frustrates the purpose.
2. Yes, if it gives the landlord written notice in advance.
3. No; a purpose made less profitable is not fully frustrated. ✓
4. No, because frustration applies only to residential leases.

Why: DRE Reference Book ch. 9 (Frustration of commercial purpose): THE TENANT'S PURPOSE MUST BE COMPLETELY FRUSTRATED. A "SIGNIFICANT" OR "MATERIAL" FRUSTRATION (E.G., THE TENANT'S PURPOSE BECOMES MORE DIFFICULT OR LESS PROFITABLE) IS NOT SUFFICIENT TO JUSTIFY TERMINATION. The event must also have been unforeseeable.

A landlord has evidence that an applicant with a disability would, as a tenant, pose a direct threat to the health or safety of other residents. Do the federal handicap rules require the landlord to rent to him?

1. No; the rules do not require renting to such a tenant. ✓
2. Yes; a disability bars any refusal of this applicant.
3. Yes, unless the landlord first gets a court order.
4. No, but only in buildings with four or fewer units.

Why: 24 CFR 100.202(d): NOTHING IN THIS SUBPART REQUIRES THAT A DWELLING BE MADE AVAILABLE TO AN INDIVIDUAL WHOSE TENANCY WOULD CONSTITUTE A DIRECT THREAT TO THE HEALTH OR SAFETY OF OTHER INDIVIDUALS OR WHOSE TENANCY WOULD RESULT IN SUBSTANTIAL PHYSICAL DAMAGE TO THE PROPERTY OF OTHERS.

A buyer's offer includes a clause letting the buyer withdraw at any time, for any reason, without notice, even after acceptance. What is the defect in this offer?

1. It is an option, since the buyer has paid no deposit yet.
2. It is illusory, since it never truly binds the buyer. ✓
3. It is void, since offers must allow a counteroffer.
4. It is valid only if the seller initials that clause.

Why: DRE Reference Book ch. 6: THE OFFER MUST BE "NONILLUSORY" IN CHARACTER, MEANING IT MUST ACTUALLY BIND THE OFFEROR UPON ACCEPTANCE. IF THE OFFEROR CAN CANCEL OR WITHDRAW AT PLEASURE, WITHOUT REASONABLE NOTICE, THE OFFER IS ILLUSORY.

An agent without authority signs a contract to sell his principal's land. In what manner must the principal generally ratify it?

1. Orally, since ratification needs no particular form at all.
2. By recording a notice of ratification with the county.
3. In writing, as the original authority would have required. ✓
4. Before a notary, whatever form the original act took.

Why: DRE Reference Book ch. 10: A RATIFICATION CAN BE MADE ONLY IN THE MANNER THAT WOULD HAVE BEEN NECESSARY TO CREATE THE ORIGINAL AUTHORITY FOR THE ACT RATIFIED. ACCORDINGLY, IN REAL PROPERTY DEALINGS, THE RATIFICATION MUST BE GENERALLY IN WRITING.

Which class is protected by the Virginia Fair Housing Law but NOT by the federal Fair Housing Act?

1. Source of funds. ✓
2. National origin.
3. Familial status or pregnancy.
4. Religion.

Why: Code of Virginia 36-96.1 B: Virginia's policy is fair housing REGARDLESS OF RACE, COLOR, RELIGION, NATIONAL ORIGIN, SEX, ELDERLINESS, FAMILIAL STATUS, SOURCE OF FUNDS, SEXUAL ORIENTATION, GENDER IDENTITY, MILITARY STATUS, OR DISABILITY; source of funds, elderliness and military status are among the classes the federal Act does not list.

A rectangular parcel measures 396 feet by 550 feet. How many acres does it contain?

1. 0.5 acres
2. 4.5 acres
3. 5 acres ✓
4. 45 acres

Why: Reference Book chapter 26 gives Area = Length x Width and one acre = 43,560 square feet. 396 x 550 = 217,800 square feet, and 217,800 / 43,560 = 5 acres. Dividing by 4,840 (the square YARDS in an acre) gives 45, and misremembering the constant as 48,400 gives 4.5.

A licensee represents one existing client and one new client as a dual agent. Once the dual agency begins, what may the licensee NOT do?

1. Present offers and counteroffers between the parties.
2. Make the disclosures the law requires of a seller's licensee.
3. Keep each client's confidential information private.
4. Advise either party as to the terms to offer or accept. ✓

Why: Code of Virginia 54.1-2139 H (disclosure for one existing and one new client): FOLLOWING THE COMMENCEMENT OF DUAL AGENCY OR REPRESENTATION, THE LICENSEE CANNOT ADVISE EITHER PARTY AS TO THE TERMS TO OFFER OR ACCEPT IN ANY OFFER OR COUNTEROFFER, nor advise on suitability, condition or repairs, nor in any dispute.

Apart from third-party screening costs, what is the most a Virginia landlord may charge as a nonrefundable application fee for most rentals?

1. $25.
2. $50. ✓
3. $75.
4. $100.

Why: Code of Virginia 55.1-1203: ANY LANDLORD MAY REQUIRE A REFUNDABLE APPLICATION DEPOSIT IN ADDITION TO A NONREFUNDABLE APPLICATION FEE ... AN APPLICATION FEE SHALL NOT EXCEED $50, EXCLUSIVE OF ANY ACTUAL OUT-OF-POCKET EXPENSES paid to a third party for background, credit or other checks (a lower cap applies to certain HUD-financed housing).

A contract provides that it will be extinguished if the buyer ever fails to keep the property insured. What kind of condition is this?

1. A condition subsequent. ✓
2. A condition precedent.
3. A financing contingency.
4. A time-essence clause.

Why: DRE Reference Book ch. 27 (Glossary), CONDITION SUBSEQUENT: A CONDITION ATTACHED TO AN ALREADY-VESTED ESTATE OR TO A CONTRACT WHEREBY THE ESTATE IS DEFEATED OR THE CONTRACT EXTINGUISHED THROUGH THE FAILURE OR NON-PERFORMANCE OF THE CONDITION. A condition precedent must occur BEFORE the contract takes full effect.

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.

A seller receives a $300,000 offer and replies, "Would you consider $310,000?" The buyer says no. May the seller now accept the $300,000 offer?

1. No; any reply that mentions a new price at all ends the offer.
2. No; the seller must make a new offer at $300,000.
3. Yes, but only if the buyer agrees to renew the offer.
4. Yes; a mere inquiry is not a rejection or counteroffer. ✓

Why: DRE Reference Book ch. 6: AN UNEQUIVOCAL REJECTION ENDS THE OFFER, BUT SIMPLE DISCUSSION AND PRELIMINARY BARGAINING DO NOT DO SO WHEN THEY INVOLVE NO MORE THAN INQUIRIES OR SUGGESTIONS FOR DIFFERENT TERMS. A qualified acceptance that changes the price would be a counteroffer.

An elderly owner of unsound mind, for whom no court has ever made a finding of incapacity or appointed a conservator, signs a deed to a neighbor. How is the deed classified?

1. Void; it passes no title even to a later good-faith buyer.
2. Valid; capacity is presumed and cannot be attacked later.
3. Voidable; it passes title subject to being set aside. ✓
4. Void, but only if the neighbor paid below market value.

Why: DRE Reference Book ch. 7: VOIDABLE deeds, which ARE NOT VOID, BUT ... PASS TITLE SUBJECT TO BEING SET ASIDE IN APPROPRIATE JUDICIAL PROCEEDINGS, include A DEED FROM A PERSON OF UNSOUND MIND WHOSE INCAPACITY HAS NOT BEEN DETERMINED. A deed from a person whose incapacity HAS BEEN JUDICIALLY DETERMINED is void instead.

Which is one of the factors Virginia law lists for deciding whether a requested accommodation imposes an undue financial and administrative burden?

1. Any substantial increase in the cost of the owner's insurance. ✓
2. The number of other residents with disabilities in the building.
3. How long the requester has been a tenant of the same landlord.
4. Whether nearby landlords usually grant the same kind of request.

Why: Code of Virginia 36-96.3:2 C: THE VARIOUS FACTORS ... INCLUDE (A) THE COST OF THE REQUESTED ACCOMMODATION, INCLUDING ANY SUBSTANTIAL INCREASE IN THE COST OF THE OWNER'S INSURANCE POLICY; (B) THE FINANCIAL RESOURCES OF THE PERSON RECEIVING THE REQUEST; (C) THE BENEFITS THAT THE ACCOMMODATION WOULD PROVIDE ...; AND (D) THE AVAILABILITY OF ALTERNATIVE ACCOMMODATIONS .... The other options are not listed.

A seller instructs his agent to tell buyers the property has never flooded, and both know it has. The agent does so. If a buyer is harmed, who may be liable?

1. Only the seller, as the agent followed instructions
2. Both the seller and the agent ✓
3. Only the agent, who made the statement
4. Neither, unless the statement was in the contract

Why: Reference Book chapter 10 states that an agent is liable to third parties for the agent's own torts whether or not the principal is liable, and even when acting on the principal's directions; the principal may also be liable for the agent's misrepresentations. Following instructions is no defense to fraud.

A salesperson shows a Hispanic couple homes only in neighborhoods that are mostly Hispanic, and tells them they would not be comfortable in another area she does not show them. What is this practice called?

1. Blockbusting
2. Redlining
3. Steering ✓
4. Puffing

Why: 24 CFR 100.70(a) and (c) make it unlawful, because of national origin or another protected trait, to restrict a person's choices so as to perpetuate segregated housing patterns; the practices, generally called steering, include discouraging a buyer and saying the buyer would not be comfortable or compatible with existing residents.

To whom may a designated agent disclose a client's confidential personal information without the client's written consent?

1. To the other designated agent in the firm.
2. To any licensee in the same brokerage firm.
3. Only to the designated agent's own broker. ✓
4. To no one, including the agent's broker.

Why: Code of Virginia 54.1-2139.1 A: DESIGNATED AGENTS OR REPRESENTATIVES MAY NOT DISCLOSE, EXCEPT TO THE AFFILIATED LICENSEE'S BROKER, PERSONAL OR FINANCIAL INFORMATION RECEIVED FROM THE CLIENTS ..., UNLESS OTHERWISE PROVIDED FOR BY LAW OR THE CLIENT CONSENTS IN WRITING.

Within what time must a buyer who received the disclosures bring an action for damages under the disclosure act?

1. 1 year of receiving them. ✓
2. 2 years of receiving them.
3. 3 years of receiving them.
4. 5 years of receiving them.

Why: Code of Virginia 55.1-713 C: ANY ACTION BROUGHT UNDER THIS SECTION SHALL BE COMMENCED WITHIN ONE YEAR OF THE DATE THE PURCHASER RECEIVED THE APPLICABLE DISCLOSURES; if none were delivered, within one year of settlement or occupancy.

A seller uses a limited service agent. The buyer's agent agrees with the seller to prepare the seller's addenda for a fee. What standard of care applies to that work?

1. The ordinary standard of care, with no new relationship. ✓
2. Gross negligence only, as with any help to the other side.
3. The full duties of the seller's standard agent from then on.
4. No standard at all, since the seller is not her client.

Why: Code of Virginia 54.1-2138.1 B: A LICENSEE DEALING WITH A CLIENT OF A LIMITED SERVICE AGENT MAY ENTER INTO AN AGREEMENT WITH THAT PARTY FOR PAYMENT OF A FEE ... SUCH PAYMENT SHALL NOT CREATE A BROKERAGE RELATIONSHIP; HOWEVER, THE LICENSEE PROVIDING SUCH SERVICES OR INFORMATION FOR A FEE SHALL BE HELD TO THE ORDINARY STANDARD OF CARE. Unpaid help carries the gross negligence standard instead.

Within what time after a seller's written request must the association deliver the resale certificate?

1. 7 days.
2. 10 days.
3. 14 days. ✓
4. 30 days.

Why: Code of Virginia 55.1-2309 B: THE ASSOCIATION ... SHALL DELIVER SUCH RESALE CERTIFICATE WITHIN 14 DAYS AFTER A WRITTEN REQUEST BY A SELLER OR SELLER'S AGENT; “days” means calendar days (55.1-2307).

What must a community do before new national flood insurance coverage can be provided within it?

1. Adopt adequate land use and control measures, with enforcement. ✓
2. Buy a master flood policy that covers every parcel in the area.
3. Build levees that remove all its land from the flood hazard area.
4. Obtain the written consent of every lender making local loans.

Why: 42 U.S.C. 4022(a)(1): NO NEW FLOOD INSURANCE COVERAGE SHALL BE PROVIDED UNDER THIS CHAPTER IN ANY AREA (OR SUBDIVISION THEREOF) UNLESS AN APPROPRIATE PUBLIC BODY SHALL HAVE ADOPTED ADEQUATE LAND USE AND CONTROL MEASURES (WITH EFFECTIVE ENFORCEMENT PROVISIONS) which the Administrator finds consistent with the federal criteria.

A listing broker gives an unrepresented buyer a written disclosure that he acts only for the seller, but then advocates for the buyer while presenting her offer. Which is accurate?

1. The written disclosure conclusively fixes him as seller's agent.
2. His conduct can overcome the disclosure and make him her agent. ✓
3. Advocacy matters only if the buyer pays part of his commission.
4. She becomes his client only if she signs a buyer agency contract.

Why: DRE Reference Book ch. 10: ADVOCATING THE INTEREST OF THE BUYER WHEN PRESENTING THE OFFER TO THE SELLER ... WILL LIKELY RESULT IN THE BROKER BECOMING THE AGENT OF THE BUYER. THE IMPORTANT POINT IS THAT WHILE DISCLOSURES CREATE PRESUMPTIONS REGARDING THE AGENCY RELATIONSHIPS AND THE DUTIES FLOWING THEREFROM, THESE PRESUMPTIONS MAY BE OVERCOME BASED ON THE ACTUAL CONDUCT OF THE PARTIES.

A seller hired a limited service agent. The buyer's agent helps the seller with a task the limited service agent does not perform, for no extra pay. What is the buyer's agent's exposure?

1. Liability only for gross negligence or willful misconduct. ✓
2. Full liability as the seller's standard agent from then on.
3. Liability for any error, as the seller relied on the help.
4. Automatic loss of the commission for helping the seller.

Why: Code of Virginia 54.1-2138.1 B: a licensee who, WITHOUT ADDITIONAL COMPENSATION, provides information to or assists a party represented by a limited service agent SHALL NOT INCUR LIABILITY FOR SUCH ACTIONS EXCEPT IN THE CASE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, and does not create a brokerage relationship.

A deed shows a transfer tax of $1,617, charged at $3.30 per $1,000 of consideration. What was the price?

1. $49,000
2. $245,000
3. $490,000 ✓
4. $4,900,000

Why: DRE Reference Book ch. 26: PERCENTAGE = RATE X BASE, so B = P ÷ R. $1,617 ÷ $3.30 = 490 thousands, or $490,000. $245,000 treats the rate as per $500.

A $520,000 sale pays the buyer's brokerage 2.5%. That brokerage owes another broker a referral fee of 25% of its side of the commission. What is the referral fee?

1. $1,625
2. $3,250 ✓
3. $9,750
4. $13,000

Why: DRE Reference Book ch. 26: PERCENTAGE = RATE X BASE. The buyer's side is $520,000 x 0.025 = $13,000; the referral is $13,000 x 0.25 = $3,250. $9,750 is what the brokerage keeps, and $13,000 is its whole side.

In a private civil action, what may the court award a plaintiff who proves a discriminatory housing practice?

1. Compensatory damages only, capped at $10,000.
2. An injunction only, with no money damages.
3. A civil penalty paid to the Commonwealth only.
4. Compensatory and punitive damages, and fees. ✓

Why: Code of Virginia 36-96.18 C: THE COURT OR JURY MAY AWARD TO THE PLAINTIFF, AS THE PREVAILING PARTY, COMPENSATORY AND PUNITIVE DAMAGES, WITHOUT LIMITATION OTHERWISE IMPOSED BY STATE LAW, AND THE COURT MAY AWARD REASONABLE ATTORNEY'S FEES AND COSTS, and injunctions.

What must a Virginia landlord offer a prospective tenant along with the rental agreement?

1. A copy of the landlord's own mortgage and insurance policy.
2. The official statement of tenant rights and duties. ✓
3. A list of every prior tenant of the unit and their contacts.
4. A notarized promise to renew the lease at the same rent.

Why: Code of Virginia 55.1-1204: A LANDLORD SHALL OFFER A PROSPECTIVE TENANT A WRITTEN RENTAL AGREEMENT ... AND SHALL PROVIDE WITH IT THE STATEMENT OF TENANT RIGHTS AND RESPONSIBILITIES developed by the Department of Housing and Community Development, and the parties sign the Department's acknowledgment form.

Under Virginia's definition, which of these is showing property?

1. Giving a buyer a live virtual tour inside the house. ✓
2. Posting photos of the house on the firm's website.
3. Mailing the buyer a printed list of new listings.
4. Reading the public tax record to a buyer by phone.

Why: Code of Virginia 54.1-2130: 'SHOWING PROPERTY' MEANS TAKING A PROSPECTIVE BUYER OR TENANT TO A PROPERTY ... AND TAKING THE INDIVIDUAL THROUGH THE PROPERTY, INCLUDING ENTERING A PROPERTY TO PROVIDE A LIVE, VIRTUAL TOUR TO A PROSPECTIVE BUYER OR TENANT WHO IS NOT PHYSICALLY PRESENT.

A listing agent tells a buyer, truthfully, that the roof is new and that the house passed its last inspection, knowing the new roof already leaks. What rule has she broken?

1. None, since each statement she made was true.
2. None, unless she signed the inspection report.
3. Only a rule on puffing, which carries no liability.
4. She may not assert truths that together mislead. ✓

Why: DRE Reference Book ch. 10: A REAL ESTATE BROKER ... MAY MAKE NO REPRESENTATION WITHOUT A REASONABLE BASIS FOR BELIEVING THE REPRESENTATION IS TRUE, MAY ASSERT NO HALF-TRUTHS, AND MAY NOT ASSERT A SERIES OF INDEPENDENT TRUTHS WHICH WHEN INTERCONNECTED ARE EXPRESSLY OR INFERENTIALLY MISLEADING.

A law requires that certain information be given to a consumer in writing. Under the E-SIGN Act, when may an electronic record satisfy that requirement?

1. When the consumer has affirmatively consented after required disclosures. ✓
2. Whenever the sender keeps a copy of the record on its own server.
3. Only when the consumer also receives a paper copy by mail.
4. Whenever the record is sent to any email address on file.

Why: 15 U.S.C. 7001(c)(1): an electronic record satisfies a writing requirement for a consumer only if THE CONSUMER HAS AFFIRMATIVELY CONSENTED TO SUCH USE AND HAS NOT WITHDRAWN SUCH CONSENT, after a clear and conspicuous statement of the right to paper records and to withdraw consent.

A lender pays its own loan officers a bonus for each customer they refer to the lender's in-house mortgage products. Is the bonus barred by RESPA section 8?

1. No; an employer may pay its own employees for referral activity. ✓
2. Yes; any payment keyed to referrals at all is a breach of section 8.
3. No, but only if the bonus is shown on the buyer's Closing Disclosure.
4. Yes, unless the loan officers are licensed as brokers too.

Why: 12 CFR 1024.14(g)(1): SECTION 8 OF RESPA PERMITS ... (VII) AN EMPLOYER'S PAYMENT TO ITS OWN EMPLOYEES FOR ANY REFERRAL ACTIVITIES. The ban in (b) is on paying ANY OTHER COMPANY OR THE EMPLOYEES OF ANY OTHER COMPANY.

Which description best fits duress as a ground on which a party may void a contract?

1. Unlawfully depriving a person of the exercise of free will. ✓
2. Unfair advantage taken by one who holds another's confidence.
3. A mistake by one party alone about the true value of the land.
4. A false statement of fact made in reckless disregard of truth.

Why: DRE Reference Book ch. 6: A CONTRACT MAY BE RENDERED VOIDABLE BECAUSE IT WAS ENTERED INTO UNDER THE PRESSURE OF DURESS, MENACE, OR UNDUE INFLUENCE. ALL THREE, IN EFFECT, DEPRIVE THE VICTIM OF THE EXERCISE OF FREE WILL, AND SO THE LAW PERMITS SUCH PERSON TO VOID THE CONTRACT ... MODERN CASE LAW HAS EXPANDED DURESS TO INCLUDE UNLAWFULLY DEPRIVING A PERSON OF THE EXERCISE OF FREE WILL. By contrast, UNDUE INFLUENCE IS UNFAIR ADVANTAGE TAKEN BY SOMEONE WHO HAS THE CONFIDENCE OF ANOTHER; a one-sided mistake about value involves no wrongful pressure at all; and a reckless false statement is fraud.

Before a creditor may make a high-cost mortgage under Regulation Z's rules for such loans, what must it receive?

1. Certification the borrower was counseled by a HUD-approved counselor. ✓
2. Certification the borrower was counseled by the creditor's own staff.
3. A signed waiver of counseling from each borrower on the note.
4. A second appraisal ordered from a different certified appraiser.

Why: 12 CFR 1026.34(a)(5)(i): A CREDITOR SHALL NOT EXTEND A HIGH-COST MORTGAGE TO A CONSUMER UNLESS THE CREDITOR RECEIVES WRITTEN CERTIFICATION THAT THE CONSUMER HAS OBTAINED COUNSELING ON THE ADVISABILITY OF THE MORTGAGE FROM A COUNSELOR THAT IS APPROVED TO PROVIDE SUCH COUNSELING BY THE SECRETARY OF THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; (a)(5)(iii): THE COUNSELING ... SHALL NOT BE PROVIDED BY A COUNSELOR WHO IS EMPLOYED BY OR AFFILIATED WITH THE CREDITOR. Counseling is a condition, not a right to be waived.

A cost estimator uses the cubic-foot method at $3.25 per cubic foot for a warehouse 120 feet long, 80 feet wide and 20 feet high. What is the estimated cost?

1. $31,200
2. $62,400
3. $624,000 ✓
4. $6,240,000

Why: DRE Reference Book ch. 15: THE CUBIC-FOOT METHOD IS SIMILAR TO THE SQUARE-FOOT METHOD, EXCEPT THE CUBIC CONTENTS OF BUILDINGS ARE COMPARED INSTEAD OF THE SQUARE FOOTAGE OF THE FLOOR AREA. 120 x 80 x 20 = 192,000 cu ft x $3.25 = $624,000. $31,200 prices only the floor area.

A seller paid the first-half property tax installment of $2,340, covering January 1 through June 30. Closing is March 10, and the seller owns the day of closing. Using 30-day months, what credit does the seller receive?

1. $910.
2. $1,300.
3. $1,430. ✓
4. $1,560.

Why: DRE Reference Book ch. 27: PRORATION means ADJUSTMENTS OF INTEREST, TAXES, AND INSURANCE, ETC., ON A PRO RATA BASIS AS OF THE CLOSING; PREPAID ITEMS OF EXPENSE are PRORATIONS OF PREPAID ITEMS OF EXPENSE WHICH ARE CREDITED TO THE SELLER. Ch. 26: WE ASSUME 12 MONTHS OF 30 DAYS EACH. Working: the half-year is 180 days, so $2,340 / 180 = $13 a day. The seller used January 1 to March 10 = 60 + 10 = 70 days ($910). The buyer's unused 110 days x $13 = $1,430, credited to the seller.

A state takes a family's land for a new highway. What measure of just compensation do most courts apply?

1. Assessed value on the tax roll
2. The owner's original price
3. Replacement cost of the house
4. Fair market value ✓

Why: Reference Book chapter 17 says the federal Constitution requires just compensation for a taking, that the main issue in condemnation is its amount, and that most courts have ruled that fair market value is just compensation. Chapter 27 ties the right to be paid to the Fifth Amendment.

A buyer mails a signed, unqualified acceptance of a seller's offer by a reasonable mode the offer allows. The letter is lost and never arrives. Was a contract made?

1. Yes; it was made when the acceptance was mailed. ✓
2. No; an acceptance is effective only on receipt.
3. No, unless the buyer then sends a second copy.
4. Yes, but only once the seller learns it was sent.

Why: DRE Reference Book ch. 6: A CONTRACT IS MADE WHEN THE ACCEPTANCE IS MAILED OR PUT IN THE COURSE OF TRANSMISSION BY A PRESCRIBED OR REASONABLE MODE ... THIS IS SO EVEN THOUGH THE LETTER OF ACCEPTANCE IS LOST AND NEVER REACHES THE PARTY MAKING THE OFFER.

What is assessed value?

1. A lender appraiser's valuation of the property securing its loan.
2. The listing broker's estimate of value, used to set the list price.
3. The price agreed between the buyer and the seller at closing.
4. A public authority's valuation of property as the basis for taxes. ✓

Why: Reference Book chapter 27 defines assessed valuation as "a valuation placed upon a piece of property by a public authority as a basis for levying taxes on the property," and the assessor as the official responsible for it. Chapter 16 adds that property taxes are ad valorem, levied according to value.

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 retired applicant's income is a pension, and a co-applicant works part time. May the lender discount these incomes for those reasons?

1. Yes; part-time and pension income count at half their value.
2. Yes, if the lender applies the same rule to every applicant.
3. No, but it may exclude the pension once the retiree is 70.
4. No; it may weigh only their amount and likely continuance. ✓

Why: 12 CFR 1002.6(b)(5): A CREDITOR SHALL NOT DISCOUNT OR EXCLUDE FROM CONSIDERATION THE INCOME OF AN APPLICANT ... BECAUSE THE INCOME IS DERIVED FROM PART-TIME EMPLOYMENT OR IS AN ANNUITY, PENSION, OR OTHER RETIREMENT BENEFIT; A CREDITOR MAY CONSIDER THE AMOUNT AND PROBABLE CONTINUANCE OF ANY INCOME.

Ava, Ben and Cal hold title as joint tenants. Ava sells her interest to Dee. How is title then held?

1. Ben and Cal stay joint tenants as to two-thirds; Dee holds one-third in common ✓
2. All four become tenants in common, each holding an equal one-quarter
3. Dee steps into Ava's place and becomes a joint tenant with Ben and Cal
4. The sale is void, since joint tenants cannot convey without consent

Why: Reference Book chapter 5 gives this example: if A, B and C are joint tenants and A conveys to D, B and C continue as joint tenants as to a two-thirds interest and D owns one-third as a tenant in common. Dee cannot be a joint tenant because she did not acquire at the same time by the same conveyance, and a joint tenant may sever by conveying without the others' consent.

The Board's investigator asks a salesperson for her transaction file. Within what time must she produce it, unless the Board extends it?

1. 10 days. ✓
2. 21 days.
3. 30 days.
4. 45 days.

Why: 18VAC135-20-240 A: a licensee MUST PRODUCE TO THE BOARD OR ANY OF THE BOARD'S AGENTS WITHIN 10 DAYS OF THE REQUEST ... ANY DOCUMENT, BOOK, OR RECORD CONCERNING ANY REAL ESTATE TRANSACTION; subsection B allows 21 days to respond to any other inquiry.

A buyer plans to add a detached garage to the lot. What does the disclosure statement say about the owner's position on this?

1. The owner warrants that a garage meets current setbacks.
2. No representation; get a survey and check local zoning. ✓
3. The owner must disclose the lot's maximum allowed coverage.
4. The owner must provide the most recent survey of the lot.

Why: Code of Virginia 55.1-703 B 2: THE OWNER MAKES NO REPRESENTATION WITH RESPECT TO CURRENT LOT LINES OR THE ABILITY TO EXPAND, IMPROVE, OR ADD ANY STRUCTURES ON THE PROPERTY, AND PURCHASERS ARE ADVISED TO EXERCISE WHATEVER DUE DILIGENCE ... INCLUDING OBTAINING A PROPERTY SURVEY AND CONTACTING THE LOCALITY TO DETERMINE ZONING ORDINANCES OR LOT COVERAGE, HEIGHT, OR SETBACK REQUIREMENTS.

A borrower and her lender believe the lot securing a new loan was wrongly placed in a special flood hazard area. What review does federal law provide?

1. The borrower alone may sue the lender to have the requirement lifted
2. The lender may waive the requirement if it disagrees with the map
3. They may jointly ask FEMA for a review, with technical support ✓
4. None, because a lender's flood hazard determination is never reviewable

Why: 42 U.S.C. 4012a(e)(5) lets the borrower and lender jointly request the Administrator (of FEMA, 4003(a)(6)) to review whether the building is in a special flood hazard area, supported by technical information; within 45 days the Administrator sends a letter, and the determination is final. A letter finding the building outside the area relieves the obligation to require insurance for the period it states.

In a limited partnership, what do the limited partners give up in exchange for limited liability?

1. Any share of the partnership's profits.
2. Their ownership interest in the business.
3. Any right to see the partnership's books.
4. Management and control of the partnership. ✓

Why: DRE Reference Book ch. 5: in A LIMITED PARTNERSHIP ... THE GENERAL PARTNER OR PARTNERS MANAGE AND CONTROL THE PARTNERSHIP AND THE LIMITED PARTNERS (IN EXCHANGE FOR LIMITED LIABILITY) GIVE UP MANAGEMENT AND CONTROL. Limited partners still own interests and share in profits as agreed.

A signed purchase contract leaves the property description entirely blank. May oral testimony be used in court to supply the missing description?

1. Yes; oral evidence may fill in any term the writing omits.
2. Yes, if the broker testifies to the parcel the parties meant.
3. No; oral evidence may identify a description, not supply one. ✓
4. No, since oral evidence is never admissible about property.

Why: DRE Reference Book ch. 6: ORAL EVIDENCE MAY BE USED IN COURT FOR THE PURPOSE OF IDENTIFYING THE DESCRIPTION, BUT NOT FOR THE PURPOSE OF ASCERTAINING AND LOCATING A MISSING DESCRIPTION OR ONE THAT IS TOO UNCERTAIN TO BE IDENTIFIED.

A first mortgage with a $180,000 balance is foreclosed by court action. After court costs and selling expenses, the sale nets $200,000. A second mortgage with a $50,000 balance was recorded later. How much does the second lender receive from the sale?

1. $0.
2. $20,000. ✓
3. $43,478.
4. $50,000.

Why: DRE Reference Book ch. 12: SALE PROCEEDS ARE APPLIED TO COSTS OF THE LAWSUIT AND ATTORNEY FEES; TO SELLING EXPENSES; TO THE AMOUNT DUE THE BENEFICIARY/MORTGAGEE OF THE SECURITY INSTRUMENT FORECLOSED; TO JUNIOR LIEN HOLDERS ... IN ORDER OF PRIORITY; AND FINALLY THE EXCESS TO THE DEBTOR/BORROWER (IF ANY). Working: $200,000 net - $180,000 to the first lender = $20,000 left for the second lender. $0 ignores the surplus, $43,478 prorates the proceeds ($200,000 x 50/230), and $50,000 pays the junior lien in full.

Which kind of property manager makes the owner-type decisions on change of use, refinancing and sale, and often supervises other managers?

1. An asset manager. ✓
2. A resident agent.
3. A leasing agent.
4. A site custodian.

Why: DRE Reference Book ch. 22: SOME PROPERTY MANAGERS ARE ASSET MANAGERS AND MAKE THE SAME TYPES OF DECISIONS THAT AN OWNER WOULD RELATIVE TO CHANGE OF USE, REFINANCING AND SALE. ASSET MANAGERS FREQUENTLY SUPERVISE OTHER PROPERTY MANAGERS.

A company gives its branch manager authority to transact all of the branch's business without separate approval for each deal. What kind of agent is the manager?

1. A special agent
2. A general agent ✓
3. A subagent
4. A dual agent

Why: Reference Book chapter 10 uses this very example: a branch manager with general authority to transact the branch's business is a general agent, because the authority covers a series of transactions with continuity of service. A special agent handles a single transaction or a series without that continuity.

When does a Virginia salesperson's license expire?

1. One year from the day it was issued.
2. On June 30 of each even-numbered year.
3. Two years from the date the exam was passed.
4. Two years from the end of its issue month. ✓

Why: 18VAC135-20-90: LICENSES ISSUED UNDER THIS CHAPTER FOR SALESPERSONS, BROKERS, AND FIRMS WILL EXPIRE TWO YEARS FROM THE LAST DAY OF THE MONTH IN WHICH THE LICENSES WERE ISSUED.