Property Disclosures — Real Estate License practice questions

The federal lead-based paint disclosure rule applies to housing built:

1. Before 1978, at the time of a sale or a rental lease
2. Only before 1968, at the time of a sale transaction only
3. Only for rentals built between 1978 and 1992 fiscal periods
4. For any dwelling regardless of its construction date year

Answer: A — Before 1978, at the time of a sale or a rental lease

A) Correct - 1992 Act, pre-1978. B) Wrong - wrong cutoff year. C) Wrong - reversed dates. D) Wrong - post-1978 exempt.

An "as-is" sale clause in a residential contract generally means the:

1. Seller has zero liability by law
2. Seller will not make any repairs
3. Buyer waives every possible inspection
4. Buyer must buy regardless of anything

Answer: B — Seller will not make any repairs

A) Not a liability shield. B) Correct — no seller repairs. C) Inspections still available. D) Contingencies still work.

The Real Estate Settlement Procedures Act (RESPA) primarily does what?

1. Bans real estate advertising for federally related mortgage loans
2. Licenses real estate agents at the federal government level
3. Sets maximum residential sales prices in federally insured areas
4. Requires closing disclosures and bans kickbacks for referrals

Answer: D — Requires closing disclosures and bans kickbacks for referrals

A) RESPA does not ban advertising. B) Licensing is a state matter. C) RESPA does not cap sale prices. D) Correct — disclosures + anti-kickback rules.

The federal Lead-Based Paint Disclosure Rule (1992) requires that:

1. All lead-based paint be fully removed from the home before any sale can be closed
2. Disclosure be made only at the closing table with no buyer inspection review period
3. Pre-1978 sellers disclose known hazards, provide the EPA pamphlet, allow 10-day inspection
4. Disclosure be made for every dwelling regardless of the year in which it was built

Answer: C — Pre-1978 sellers disclose known hazards, provide the EPA pamphlet, allow 10-day inspection

A) Wrong - removal not required. B) Wrong - 10-day inspection. C) Correct - pre-1978 dwellings. D) Wrong - post-1978 exempt.

A TRID "closing disclosure" (CD) must be delivered to the borrower:

1. On the loan consummation date
2. By seller at the closing table
3. Only if borrower asks in writing
4. At least three business days before

Answer: D — At least three business days before

A) Too late. B) Lender delivers. C) Not conditional. D) Correct — 3-day rule.

For pre-1978 residential sales, federal law requires the seller to give the buyer:

1. A guarantee the property is lead-free
2. The EPA pamphlet plus disclosure form
3. An asbestos abatement plan by law
4. A licensed structural engineer report

Answer: B — The EPA pamphlet plus disclosure form

A) Not required. B) Correct — pamphlet + disclosure. C) Wrong hazard. D) Wrong hazard.

An as-is clause in a purchase contract generally:

1. Excuses the seller from disclosing known material defects
2. Prevents the buyer from ordering any home inspection
3. Sets a maximum sale price equal to the appraised value
4. Limits seller repair duty but preserves disclosure duty

Answer: D — Limits seller repair duty but preserves disclosure duty

A) Wrong - disclosure duty survives. B) Wrong - inspections allowed. C) Wrong - not about price. D) Correct - no repairs, still disclose.

'Dual agency' in real estate law is BEST described as which of the following?

1. The relationship is automatically legal in every U.S. state without notice
2. Occurs when a broker represents both seller and buyer with written consent
3. Has no disclosure requirement under any state law or ethics rule today
4. Is equivalent to representing neither party in the same transaction now

Answer: B — Occurs when a broker represents both seller and buyer with written consent

A) Some states prohibit dual agency entirely. B) Correct — dual agency requires informed written consent. C) Disclosure is required. D) That would be a transaction broker, not dual agency.

The Truth in Lending Act (TILA / Reg Z) requires disclosure of:

1. Only the nominal note interest rate
2. The APR and finance charge to borrower
3. Only the monthly payment on the loan
4. The loan officer's commission structure

Answer: B — The APR and finance charge to borrower

A) More than rate. B) Correct — APR + finance charge. C) More than payment. D) Not disclosed.

When must the Closing Disclosure be delivered under TRID rules?

1. At the closing table just prior to signing the loan
2. At least 3 business days before consummation of the loan
3. At least 7 business days before consummation of the loan
4. Within 30 days after closing, along with the tax records

Answer: B — At least 3 business days before consummation of the loan

A) Delivering at closing violates the waiting period rule. B) Correct — CD must be received at least 3 business days before consummation. C) 7 days is the Loan Estimate waiting rule. D) Post-closing delivery defeats the CD's purpose.

What is radon?

A naturally occurring radioactive gas from uranium decay in soil. Second leading cause of lung cancer. Testing/mitigation may be recommended in transactions.

What is the difference between an agent's duty to a client vs. a customer?

Client: full fiduciary duties (OLDCAR). Customer: honesty, fairness, disclosure of material defects, and accurate information. No advocacy or confidentiality duty.

What is a Phase II Environmental Assessment?

A follow-up to Phase I that involves actual sampling and testing of soil, water, and/or air to confirm the presence of contamination.

What is a material fact that must be disclosed?

Any information that would affect a reasonable buyer's decision to purchase or the price they would offer. Includes defects, environmental hazards, liens, and pending assessments.