Louisiana Real Estate Broker Exam — All Questions

A Louisianian dies without a testament, survived by a spouse and two children, owning community property. Under Civil Code Article 890, the surviving spouse takes:

• a.Full ownership of the decedent's half of the community
• b.Nothing, since the descendants take by representation
• c.A usufruct over that half lasting exactly ten years
• d.A usufruct over the decedent's half, until death or remarriage✓

Article 880 provides that in the absence of valid testamentary disposition the undisposed property devolves by operation of law in favor of descendants, ascendants, collaterals, and the spouse — this is intestate succession, which Article 875 distinguishes from the testate succession of Article 874. Article 890 then supplies the spouse's share when descendants survive: a usufruct over the decedent's share of the community property to the extent the decedent has not disposed of it by testament, terminating when the surviving spouse dies or remarries, whichever occurs first. Full ownership belongs to a different case, the one Article 889 covers, where the deceased leaves no descendants at all. The spouse is plainly not excluded, and a fixed ten-year term appears nowhere in the article — the terminating events are death and remarriage.

A possessor of a Louisiana tract holds it in good faith under a just title. Under Civil Code Article 3475, he may acquire ownership by acquisitive prescription in:

• a.Ten years✓
• b.Thirty years
• c.Five years
• d.Twenty years

Civil Code Article 3473 provides that ownership and other real rights in immovables may be acquired by the prescription of ten years, and Article 3475 lists what that shorter prescription demands: possession of ten years, good faith, just title, and a thing susceptible of acquisition by prescription. Thirty years is the other prescription, and Article 3486 explains what distinguishes it — ownership may be acquired by thirty years of possession without the need of just title or possession in good faith. So thirty years is the price of lacking the very things this possessor has. Five years belongs to a different mechanism altogether, the five-year period in Article 2032 for annulling a relatively null contract. Twenty years appears in neither section; the Code offers ten and thirty for immovables, and which one applies turns on title and good faith.

A seller conveys a Louisiana tract for a price far below what it was worth. Under Civil Code Article 2589, the sale may be rescinded for lesion beyond moiety when the price is:

• a.Less than three fourths of the appraised value of the immovable
• b.More than double the assessed value carried on the parish roll
• c.Less than one half of the fair market value of the immovable✓
• d.Less than the balance still owed on the seller's mortgage

Article 2589 sets the threshold at one half: the sale of an immovable may be rescinded for lesion when the price is less than one half of the fair market value, the remedy belongs only to the seller and only in sales of corporeal immovables, and it is unavailable in a sale made by order of the court. The article adds that the seller may invoke lesion even if he renounced the right. Three fourths states the wrong fraction, and the fraction is the whole of the rule — 'moiety' means half. Assessed value is a tax figure rather than the fair market value Article 2590 directs be used, measured in the state the property was in at the time of the sale. What the seller still owes his lender is irrelevant to the comparison. Two limits are worth remembering: Article 2591 lets the buyer keep the immovable by paying the difference, and Article 2595 gives a peremptive period of one year from the sale.

Under Civil Code Article 1833, an authentic act is a writing executed before a notary public:

• a.And signed by the parties, needing no witnesses at all
• b.In the presence of one witness, and bearing the notary's raised seal
• c.And filed in the parish conveyance records within five days
• d.Before two witnesses, and signed by parties, witnesses, and notary✓

Article 1833(A) sets the form precisely: a writing executed before a notary public or other authorized officer, in the presence of two witnesses, and signed by each party who executed it, by each witness, and by each notary before whom it was executed, with each signer's name legibly printed beneath the signature. Article 1835 supplies the consequence — the act constitutes full proof of the agreement against the parties, their heirs, and their successors. One witness and a seal is not the requirement; the number of witnesses is two and the statute asks for signatures, not a seal. Dispensing with witnesses altogether describes an act under private signature, which Article 1834 says a defective authentic act may still be. Recordation is a different matter with a different purpose: Article 2442 makes an act of sale binding between the parties from the time it is made and effective against third persons only once filed for registry, and no five-day deadline applies. Note too that Article 2440 requires a sale or promise of sale of an immovable to be made by authentic act or by act under private signature, so notarization is customary in Louisiana practice rather than universally compulsory.

A buyer discovers a defect that makes a house so inconvenient to use that she would not have bought it had she known. Under Civil Code Article 2520 this is:

• a.An apparent defect, for which Article 2521 gives the seller no warranty
• b.A redhibitory defect, entitling the buyer to rescission of the sale✓
• c.A ground for rescinding the sale for lesion beyond moiety
• d.A defect remedied only under the federal fair housing statutes

Article 2520 states the seller's warranty against redhibitory defects and defines the term in two grades: a defect is redhibitory when it renders the thing useless, or its use so inconvenient that a buyer must be presumed not to have bought it had he known, and that gives the right to rescission; a defect that merely diminishes usefulness or value so that the buyer would still have bought but for a lesser price limits him to a reduction of the price. Article 2521 withholds the warranty for defects known to the buyer at the sale or discoverable by a reasonably prudent buyer, which is what makes a defect apparent rather than redhibitory — this one was hidden. Lesion beyond moiety under Article 2589 is about a price below half of value, not about condition. And fair housing law governs discrimination in the sale or rental of dwellings, not the physical soundness of what was sold. Article 2534 sets the deadlines: against a seller who did not know of the defect, two years from delivery or one year from discovery, whichever occurs first.

Under R.S. 9:2941, a bond for deed is:

• a.A surety bond guaranteeing the seller's warranties against eviction
• b.A mortgage the buyer grants the seller at the act of sale
• c.A contract to sell in which the price is paid in installments✓
• d.A deposit the closing notary holds until the price is paid in full

R.S. 9:2941 defines a bond for deed as a contract to sell real property in which the purchase price is to be paid by the buyer to the seller in installments and in which the seller, after payment of a stipulated sum, agrees to deliver title to the buyer. Two features follow and both are tested: title stays with the seller until the stipulated sum is paid, and the arrangement is a contract to sell rather than a completed sale, so the Civil Code's contract-to-sell rules apply to it. Despite the name, no surety is involved — the word 'bond' here carries its older sense of an obligation, and the seller's warranty against eviction is a separate matter governed by Article 2475. It is not a mortgage: a mortgage under Article 3278 secures an obligation over property the debtor already owns. And no notary holds the money; the installments are paid to the seller, which is why R.S. 9:2942 requires a guarantee to release any encumbrance before encumbered property may be sold this way.

A one-year apartment lease expires. The tenant stays on for a week and neither party gives notice or objects. Under Civil Code Articles 2721 and 2723, the lease is:

• a.Terminated, making the occupant a trespasser
• b.Renewed for another full year on the same terms
• c.Converted into a bond for deed by the occupancy
• d.Reconducted, and its term is now from month to month✓

Article 2721 defines reconduction: a lease with a fixed term is reconducted if, after the term expires and without notice to vacate or terminate or other opposition by either party, the lessee remains in possession for one week in the case of a lease with a fixed term longer than a week — or thirty days for an agricultural lease, or one day for a lease of a week or less. Article 2723 then supplies the new term, and for a nonagricultural lease whose term was a month or longer it is month to month; Article 2724 continues all the other provisions of the lease. So the tenancy plainly has not ended, and the occupant is not a trespasser. Nor does it renew for a second full year — reconduction shortens the term rather than repeating it, which is the practical point of the doctrine. And a bond for deed is a contract to sell under R.S. 9:2941; staying past a lease term creates nothing of the kind.

Louisiana's mandatory agency disclosure form must first be provided to a prospective client or customer:

• a.Within 30 days after the act of sale has been passed
• b.Only after the purchase agreement is signed
• c.At the time substantive contact is made✓
• d.Only if the consumer asks about representation

Louisiana's trigger is substantive contact. LAC 46:LXVII Section 3703(C) requires the mandatory agency disclosure form to be provided at the time when substantive contact is made, and substantive contact is defined by reference to the point at which confidential or financial information would be exchanged. That is what the timing is protecting: the consumer learns who represents whom before revealing anything that could be used against them in a negotiation. Waiting until the purchase agreement is signed defeats that purpose, because by then the consumer has already negotiated and committed; waiting until after the act of sale is later still, when representation is a settled fact and the disclosure can change nothing. Nor does the duty depend on the consumer raising the subject: it is mandatory on the licensee, and the consumer who does not know to ask is precisely the one it protects.

A Louisiana broker wishes to have the firm represent both the buyer and the seller in the same transaction as a dual agent. This is permitted only if:

• a.Each party is represented by a different parish
• b.Both parties give informed written consent✓
• c.The transaction is below a set dollar amount
• d.The LREC approves the specific transaction in advance

R.S. 9:3897(A) permits a licensee to act as a dual agent only with the informed written consent of all clients, and presumes that consent from a client who signs the dual agency disclosure form the commission prepares. Consent is what makes the arrangement lawful, which is why the size of the deal cannot be the test — a transaction under some price point still leaves both parties with a licensee who, under Subsection B, may not reveal what price the seller will take or what price the buyer will pay without permission. The commission prescribes the form; it does not approve individual transactions in advance. And the parties being in different parishes is a geographic fact about them, not a form of separate representation. Subsection C fixes the timing: the consent is obtained when the brokerage agreement is entered into or at any time before the licensee acts as a dual agent.

Which of the following is a ministerial act as R.S. 9:3891 defines the term?

• a.Advising a buyer on what price to offer
• b.Negotiating repairs after an inspection
• c.Setting an appointment for a person to view a property✓
• d.Preparing a comparative market analysis

R.S. 9:3891(12) defines ministerial acts as acts a licensee may perform for a person that are informative in nature, and gives a list: answering inquiries about the availability, price, or location of property or of brokerage services, conducting an open house and answering questions about the property, setting an appointment to view property, accompanying an inspector or appraiser on a visit, describing a property's condition in response to an inquiry, and referring a person to another broker or service provider. Advising on what to offer and negotiating repairs are both advocacy — they promote one side's position, which is what R.S. 9:3893 makes the duty of a licensee representing a client. Pricing a seller's home through a comparative market analysis is likewise professional advice rendered to a client. The distinction matters: R.S. 9:3892 presumes designated agency whenever a licensee does more than ministerial acts without a written agreement to the contrary.

Under R.S. 9:3891(6), which of these is expressly NOT confidential information?

• a.Material information about the property's physical condition✓
• b.The lowest price the seller has privately said she would accept
• c.The buyer's financial qualifications as disclosed to the licensee
• d.The client's personal reason for needing to sell quickly

R.S. 9:3891(6)(a) defines confidential information as information a licensee obtains from a client during a brokerage agreement that the client made confidential by written request or instruction, or whose disclosure could materially harm the client's position. Subparagraph (b) then excludes one category outright: confidential information shall not be considered to include material information about the physical condition of the property. That exclusion is why a licensee can never keep a known defect secret in the name of loyalty, and R.S. 37:1455(A)(27) makes failing to disclose a known material defect a disciplinary cause. A seller's private reserve price, a buyer's financial qualifications, and a client's motive all fall squarely inside the definition, since revealing any of them would harm the client's bargaining position. Subparagraph (c) adds that a designated agent may share confidential information with his own broker to seek advice for the client's benefit.

A licensee works with a buyer, performing more than ministerial acts, and no written agreement says what the relationship is. Under R.S. 9:3892 the licensee is:

• a.A subagent of the listing broker through the multiple listing service
• b.A transaction broker who owes neither party any agency duty
• c.A dual agent by operation of law until a client consents in writing
• d.The buyer's designated agent, by the presumption the statute creates✓

R.S. 9:3892 provides that, notwithstanding the Civil Code's mandate articles, a licensee engaged in a real estate transaction is considered to be representing the person with whom he is working as a designated agent unless there is a written agreement providing for a different relationship or the licensee is performing only ministerial acts. Representation is therefore the default, and the writing is what displaces it rather than what creates it. Subagency cannot arise here: R.S. 9:3898 says subagency is created only by written agreement and that membership in a multiple listing service does not by itself make a licensee anyone's subagent. Louisiana's statute recognizes no transaction-broker status that suspends agency duties. And dual agency under R.S. 9:3891(10) requires the licensee to be working with both sides of the same transaction, which is not this case.

A licensee is the owner of a property and sells it to a buyer she is also working with. Under R.S. 9:3891(10) this is:

• a.Not dual agency, since she is the seller of her own property✓
• b.Dual agency, which requires the informed written consent of both
• c.Prohibited outright by the Louisiana law of agency
• d.Permitted only after the commission approves the transaction

R.S. 9:3891(10) defines dual agency as an agency relationship in which a licensee is working with both buyer and seller, or both landlord and tenant, in the same transaction — and then excludes two situations: where the licensee is the seller of property he owns, and where the property is owned by a real estate business of which the licensee is the sole proprietor and agent. R.S. 9:3897(G) repeats the carve-out. The reason is structural: a person cannot be his own agent, so there is only one client in the transaction and no conflicting loyalty for consent to cure. That is why calling it consented dual agency misdescribes it. The arrangement is not prohibited, and no advance approval is required — but disclosure still is, because R.S. 37:1455(A)(9) makes acting as agent and undisclosed principal a disciplinary cause and conditions its own exception on the fact being disclosed to the buyer.

R.S. 9:3893 requires a licensee representing a client to do which of the following?

• a.Obtain the highest price obtainable
• b.Timely present all offers to and from the client✓
• c.Guarantee information the other party supplies
• d.Represent one client at a time

R.S. 9:3893(A) lists three duties: perform the terms of the brokerage agreement, promote the client's best interests, and exercise reasonable skill and care. Promoting the client's interests is then defined by its parts — seeking a transaction at the price and terms stated in the brokerage agreement or otherwise acceptable to the client, timely presenting all offers to and from the client, and timely accounting for money and property in which the client has an interest. Price is measured against the client's own instructions, not against an abstract maximum, so overriding what the client asked for would breach the duty rather than satisfy it. The statute expressly limits liability rather than imposing a guarantee: Subsection D shields the licensee from liability for false information a customer supplied, unless he knew or should have known it was false. And Subsection B confirms that showing alternative properties to a buyer client, or the client's property to other buyers, breaches nothing.

A brokerage agreement expires without a sale. Under R.S. 9:3895, what does the broker still owe the former client?

• a.A duty to keep marketing the property for thirty days
• b.A duty to present offers arriving after expiration
• c.A duty to account for money and property and keep confidences✓
• d.A duty never to represent a later buyer of that property

R.S. 9:3895 provides that, except as a written agreement between broker and client provides otherwise, neither the broker nor any licensee affiliated with him owes further duties after the brokerage agreement terminates, expires, or is fully performed — with two survivals: accounting for all monies and property relating to the transaction, and keeping confidential all confidential information received during the agreement. The confidentiality survival is the one that catches people out, because a client's reserve price does not stop being sensitive when the listing lapses. Continuing to market the property would be performing a contract that no longer exists, and R.S. 37:1449(C) requires that contract to have carried a definite expiration date in the first place. Presenting later offers is likewise no longer owed. And nothing bars the broker from representing a future buyer, so long as the old client's confidences are not used.

Toward a customer — a person the licensee is not representing — R.S. 9:3894 requires the licensee to:

• a.Owe the same duties of loyalty owed to a represented client
• b.Decline to answer any question about the property's condition
• c.Obtain a signed waiver of representation before any conversation
• d.Treat all customers honestly and fairly✓

R.S. 9:3894(A) requires licensees to treat all customers honestly and fairly and permits them, while representing a client, to assist a customer by performing ministerial acts — adding that doing so must not violate the brokerage agreement with the client and does not itself form a brokerage agreement with the customer. Honest and fair is deliberately a lower standard than the client duties in R.S. 9:3893; extending full loyalty to a customer would put the licensee on both sides at once, which is the dual agency the statute regulates separately. Refusing to answer questions about the property would breach the honesty duty and collide with R.S. 37:1455(A)(27), which makes concealing a known material defect a disciplinary cause. And no waiver is called for: R.S. 9:3891(7) defines a customer as someone not being represented, a status that follows from the absence of an agreement rather than from signing one.

Acting as a dual agent with the written consent of both clients, a licensee may NOT disclose:

• a.The seller's lowest acceptable price, absent her permission✓
• b.Latent material defects in the property known to the licensee
• c.The buyer's financial qualification, to the seller
• d.Comparable properties that have recently sold nearby

R.S. 9:3897(B) lists exactly three things a dual agent must withhold: confidential information about either client without that client's permission, the price the seller or landlord will take other than the listing price without that party's permission, and the price the buyer or tenant is willing to pay without that party's permission. The other three choices are not merely permitted but affirmatively required, because Subsection A prescribes the language of the consent form and it commits the dual agent to disclose all latent material defects known to the licensee, to disclose the financial qualification of the buyer or tenant to the seller or landlord, and to provide information about comparable properties that have sold so both clients can make educated decisions. That is the shape of Louisiana dual agency: full information about the property and the market flows both ways, and only each side's negotiating position is sealed. Subsection E adds that knowledge is not imputed between the clients or their licensees.

Under R.S. 9:3897(C), a client's written consent to dual agency must be obtained:

• a.Within five days after the seller accepts the buyer's written offer
• b.At the act of sale, before the notary passes the transfer
• c.Only when a client asks the licensee about who represents whom
• d.When the brokerage agreement is made, or before acting as one✓

R.S. 9:3897(C) requires the licensee to obtain the written consent from the client at the time the brokerage agreement is entered into or at any time before the licensee acts as a dual agent, and LAC 46:LXVII §3705(C) repeats it and adds a five-year retention period for the signed form. The deadline is drawn before the conflict begins, which is what makes consent informed — a client who learns afterwards that his agent was also the other side's agent has nothing left to consent to. Waiting until the offer is accepted puts the disclosure after the negotiation it was meant to govern, and the act of sale is later still. Nor does the duty wait on the client raising the subject: it falls on the licensee, and R.S. 37:1455(A)(21) makes failing to provide the agency disclosure pamphlet and, where applicable, the dual agency disclosure form a cause for discipline.

One of two clients refuses to consent to a disclosed dual agency. Under R.S. 9:3897(F), the licensee may:

• a.Continue with both, disclosing no confidences
• b.Withdraw from that client and continue with the other✓
• c.Withdraw from both, but from neither alone
• d.Refer both to another firm for a referral fee

R.S. 9:3897(F) allows a licensee, in any transaction, to withdraw without liability from representing a client who has not consented to a disclosed dual agency, and states that the withdrawal does not prejudice the licensee's ability to continue representing the other client in that transaction or to represent the withdrawing client in other transactions. Carrying on as dual agent regardless is precisely what Subsection A forbids, since it permits dual agency only with the informed written consent of all clients — keeping confidences is a duty of a lawful dual agent, not a substitute for the consent that makes the role lawful. Withdrawing from both is more than the statute asks. And the fee is where the subsection sets a condition: when a withdrawal occurs the licensee may not receive a referral fee for referring a client to another licensee unless written disclosure is made to both the withdrawing client and the client who continues to be represented.

A listing agent commits a wrongful act while providing brokerage services for a seller. Under R.S. 9:3899, the seller is:

• a.Liable jointly with the broker
• b.Liable up to the agreed commission
• c.Not liable for the acts or omissions of the licensee✓
• d.Liable only if the licensee was an employee

R.S. 9:3899 is one sentence and it is absolute: a client shall not be liable for the acts or omissions of a licensee in providing brokerage services for or on behalf of the client. The section displaces the ordinary rule that a principal answers for his agent, which is why joint liability is wrong even though it would be the common-law expectation. There is no cap and no partial exposure measured by the commission, so limiting the seller's liability to that amount reads a compromise into a provision that grants none. Nor does the outcome turn on employment status: R.S. 37:1446(H) treats a sponsored licensee as an independent contractor of the sponsoring broker when three conditions are met, but R.S. 9:3899 protects the client either way. Responsibility instead runs through the brokerage, which is where R.S. 37:1449 puts the recordkeeping duties and R.S. 37:1461 puts the recovery fund.

A prospective buyer signs and dates the agency disclosure form at substantive contact. Under LAC 46:LXVII §3703(D), the licensee must then:

• a.Sign as a witness to the signature and retain the form for five years✓
• b.File a copy with the commission within ten days of the signature
• c.Deliver the original to the sponsoring broker within twenty-four hours
• d.Attach the signed form to the purchase agreement before presenting it

LAC 46:LXVII §3703(D) requires the recipient to sign and date the pamphlet or form, requires the licensee providing it to sign as a witness to that signature, and requires the licensee to retain the signed pamphlet or a copy of the form for five years. Subsection E covers electronic delivery, where the retention duty is the same but receipt is evidenced by a document verifying time and date, and Subsection F covers refusal, where the licensee prepares written documentation of the proposed transaction, the time and date the form was provided, and the reason given for not signing — also kept five years. Nothing is filed with the commission; the file stays with the licensee for inspection under R.S. 37:1435(D). No twenty-four-hour transfer to the broker is prescribed. And the form is not an attachment to the offer: it is delivered at substantive contact, which under R.S. 9:3891(14) is the point where confidential information is solicited or received, long before any purchase agreement exists.