Nevada Real Estate Broker Exam — All Questions

A Nevada licensee represents the seller in a transaction, and the buyer is not represented by anyone. Under NRS 645.252(3), the licensee must provide the Division's duties-owed form to:

• a.the seller only, because the buyer has not engaged the licensee as an agent
• b.the seller and the unrepresented buyer, because both are parties to the transaction✓
• c.the unrepresented buyer only, because the seller already signed a brokerage agreement
• d.neither party, because the form is required only when a licensee acts for both sides

NRS 645.252(3) requires the licensee to provide the appropriate form prepared by the Division under NRS 645.193 to "(a) Each party for whom the licensee is acting as an agent in the real estate transaction; and (b) Each unrepresented party to the real estate transaction, if any." The unrepresented buyer is squarely within paragraph (b), so serving the seller alone is not enough; serving only the buyer skips the client the form was written for; and the notion that the form appears only in dual-representation transactions inverts the statute. NRS 645.193 tells you why more than one form exists: the Division prepares a form for a licensee acting for only one party, a second for a licensee acting for more than one party, and a third for a broker who assigns different affiliated licensees to separate parties. Choosing the right one of the three is part of using them correctly.

A Nevada licensee is asked to act for both the buyer and the seller in one transaction. Under NRS 645.252(1)(d), the written consent obtained from each party must state that the licensee will not disclose confidential information about a party for:

• a.6 months after the revocation or termination of the brokerage agreement
• b.3 years after the revocation or termination of the brokerage agreement
• c.1 year after the revocation or termination of the brokerage agreement✓
• d.as long as the licensee holds a Nevada real estate license

NRS 645.252(1)(d)(3) requires the written consent to contain "[a] statement that the licensee will not disclose any confidential information for 1 year after the revocation or termination of any brokerage agreement entered into with a party to the transaction, unless he or she is required to do so by a court of competent jurisdiction or is given written permission to do so by that party." One year is the figure, and the same period appears independently in NRS 645.254(2) as a duty owed to a represented client. The other periods are invented; the statute neither shortens the obligation to six months nor extends it to three years or to the life of the license. The consent must also describe the transaction, state that the licensee is acting for two or more parties with adverse interests and therefore has a conflict of interest, state that a party is not required to consent, and state that the consent is given without coercion and with an understanding of its terms.

Once a Nevada licensee has disclosed that he or she is acting for more than one party to a transaction, NRS 645.252(1)(d) permits the licensee to continue acting as agent:

• a.immediately, because making the disclosure is itself what the statute requires
• b.only after the Real Estate Division approves the dual representation in writing
• c.only after obtaining the written consent of each party for whom the licensee is acting✓
• d.only after each party signs a waiver of the statutory duties the licensee owes

The statute does not stop at disclosure. NRS 645.252(1)(d) provides that if a licensee discloses that he or she is acting for more than one party, "he or she must obtain the written consent of each party to the transaction for whom the licensee is acting before he or she may continue to act in his or her capacity as an agent." Disclosure alone therefore does not authorize the licensee to carry on. The Division does not approve individual transactions, so no written blessing from it is available or required. And the waiver answer is wrong twice over: NRS 645.255 makes the duties set out in NRS 645.252 and 645.254 unwaivable but for one narrow statutory exception, and nothing in that exception turns dual representation on or off. Where the same broker assigns different affiliated licensees to the two parties, NRS 645.253(1) removes the consent requirement - a distinct situation from one licensee serving both sides.

NAC 645.637 fixes the outside deadline for a Nevada licensee's written disclosure of the agency relationship, or of the licensee's own status as a principal. That deadline is:

• a.no later than five days after the client or unrepresented party signs any written document
• b.no later than the opening of escrow on the transaction being negotiated
• c.no later than the date the licensee's brokerage agreement is delivered to the client
• d.no later than the date and time the client or unrepresented party signs any written document✓

NAC 645.637 requires the licensee, in each real estate transaction involving the licensee as agent or principal, to disclose the relationship or status clearly and in writing to the client and to any party not represented by a licensee, and it fixes the timing: "as soon as practicable, but not later than the date and time on which any written document is signed by the client or any party not represented by a licensee, or both." A signature is the cut-off, which is why a five-day grace period and an escrow-opening deadline both come too late - by then a party may already have committed on paper without knowing who represents whom. Delivery of the brokerage agreement is not the trigger either; an unrepresented party never receives one. The regulation adds a second step that is easy to overlook: the prior disclosure "must then be confirmed in a separate provision" and be maintained by the broker in the transaction file.

A Nevada broker assigns one affiliated licensee to the buyer and a different affiliated licensee to the seller in the same transaction. Under NRS 645.253(1), those two licensees:

• a.need not obtain the consent to act required by NRS 645.252(1)(d), but may not disclose a client's confidential information except to the broker✓
• b.must each obtain from their own party the consent to act required by NRS 645.252(1)(d), and may then share a client's confidential information with each other
• c.must both withdraw from the transaction, because one brokerage may not be assigned to both sides of it
• d.must obtain the Division's written approval, which then substitutes for the consent to act of each party

NRS 645.253(1) provides that where a broker assigns different affiliated licensees to separate parties to a transaction, "the licensees are not required to obtain the written consent required pursuant to paragraph (d) of subsection 1 of NRS 645.252," and that "[e]ach licensee shall not disclose, except to the real estate broker, confidential information relating to a client in violation of NRS 645.254." Both halves matter: the consent requirement drops away, and the confidentiality duty does not - the only permitted upward channel is the broker. So the answer that keeps the consent requirement and also lets the licensees swap confidences gets both halves wrong. Nevada does not forbid a single brokerage from serving both sides, so withdrawal is not required, and the Division approves no such arrangement. Subsection 2 applies the same rule to affiliated licensees who hold property management permits and are assigned to separate parties to a property management agreement.

A Nevada licensee wants to approach an owner directly, and knows the owner has already granted another broker an exclusive right to sell the property. Under NRS 645.635(2), the licensee may do so only if:

• a.the licensee has given the other broker written notice of the intended contact
• b.the licensee has obtained permission in writing from the other broker✓
• c.the owner tells the licensee that the existing listing is about to expire
• d.the licensee confines the contact to matters arising after the closing

NRS 645.635(2) makes it grounds for discipline to negotiate a sale, exchange or lease of real estate, or to communicate after such negotiations but before closing, "directly with a client if the person knows that the client has a brokerage agreement in force in connection with the property granting an exclusive agency, including, without limitation, an exclusive right to sell to another broker, unless permission in writing has been obtained from the other broker." Written permission from the listing broker is the only route the statute leaves open. Notice is not permission; the owner's own account of when the listing expires does not release the licensee while the agreement is in force; and the statute reaches communications up to closing, so a promise to confine the contact to post-closing matters does not fit the facts of a live listing. NAC 645.610(1)(d) applies the same principle to marketing: a licensee may not advertise or sign a property exclusively listed by another broker without that broker's prior written consent, which the listing broker may not give or withhold without the owner's knowledge.

Which duty of a Nevada licensee may a client actually waive, and by what means?

• a.The duty to account for the client's money, by signing a waiver the broker drafts
• b.The duty to disclose material facts, by initialing a clause in the brokerage agreement
• c.The duty of reasonable skill and care, by signing a release at the close of escrow
• d.The duty to present all offers, by signing a waiver on a form prescribed by the Division✓

NRS 645.254(4) requires a licensee who has entered into a brokerage agreement to "present all offers made to or by the client as soon as is practicable, unless the client chooses to waive the duty of the licensee to present all offers and signs a waiver of the duty on a form prescribed by the Division." That is the single waivable duty, and the form has to be the Division's. NRS 645.255 closes off the rest: "[e]xcept as otherwise provided in subsection 4 of NRS 645.254, no duty of a licensee set forth in NRS 645.252 or 645.254 or a property manager set forth in NRS 645.6057 may be waived." So the duties to account for the client's money (NRS 645.254(7)), to disclose material facts (NRS 645.254(5) and NRS 645.252(1)(a)) and to exercise reasonable skill and care (NRS 645.252(2), 645.254(1)) survive any clause, initial or release a party might sign.

Unless the parties have otherwise agreed in writing, NRS 645.252(4) says a Nevada licensee owes no duty to:

• a.disclose material facts about the property that the licensee actually knows
• b.exercise reasonable skill and care toward all parties to the transaction
• c.conduct an independent investigation of the condition of the property being sold✓
• d.disclose each source from which the licensee will be compensated in the transaction

NRS 645.252(4) says that unless otherwise agreed upon in writing, a licensee owes no duty to independently verify the accuracy of a statement made by a certified inspector or other appropriate licensed expert, to conduct an independent inspection of a party's financial condition, or to "[c]onduct an investigation of the condition of the property which is the subject of the real estate transaction." The other three choices are duties the same section imposes: paragraph (1)(a) requires disclosure of material and relevant facts the licensee knows or should know about the property, subsection 2 requires reasonable skill and care toward all parties, and paragraph (1)(b) requires disclosure of each source from which the licensee will receive compensation. The line between them is the point: Nevada does not turn the licensee into an inspector, but it does not let the licensee sit on what he or she already knows. NRS 645.259(2) makes the same distinction for public-record disclosures, and expressly preserves the paragraph (1)(a) duty.

In an action under NRS 645.257 against a Nevada licensee for failing to perform a statutory duty, the standard of care applied to the licensee is:

• a.the care a reasonably prudent attorney would use, measured by the knowledge a Nevada law license requires
• b.the care a reasonably prudent licensee would use, measured by the knowledge NRS 645.343 and 645.345 require✓
• c.strict liability for any loss the client suffers, measured by the client's actual damages in the transaction
• d.whatever standard the parties wrote into the brokerage agreement, measured by that agreement alone

NRS 645.257(3)(a) provides that "[t]he standard of care owed by a licensee is the degree of care that a reasonably prudent real estate licensee would exercise and is measured by the degree of knowledge required to be obtained by a real estate licensee pursuant to NRS 645.343 and 645.345" - that is, by the education the license itself demands, not by a lawyer's training, not by strict liability, and not by whatever the parties happened to write. Subsection 1 gives a person damaged as the proximate result of a failure to perform a duty under NRS 645.252, 645.253, 645.254 or 645.6057 an action for actual damages. Subsection 2 adds a protection worth remembering: a client's own knowledge of material facts about the property is not imputed to the licensee. For a property manager, subsection 3(b) sets the parallel standard by reference to the permit requirements of NRS 645.6052.

Under NRS 645.259(1), a Nevada licensee may be held liable for a misrepresentation made by his or her own client only where the licensee:

• a.knew the client made it and failed to tell the person it was made to that it was false✓
• b.prepared the document in which the client's statement appeared, whether or not the licensee knew
• c.received a commission in the transaction in which the client's statement was made
• d.failed to obtain the client's statement in writing before passing it to the other party

NRS 645.259(1) provides that a licensee may not be held liable for a misrepresentation made by his or her client unless the licensee "(a) Knew the client made the misrepresentation; and (b) Failed to inform the person to whom the client made the misrepresentation that the statement was false." Both elements are needed, and both are about knowledge and silence - not about who typed the document, who was paid, or whether the statement was reduced to writing. Subsection 2 gives a second shelter: the licensee is generally not liable for the seller's failure to make a disclosure required by NRS 113.130 or 113.135 where the information would have been a readily available public record. That shelter is expressly limited, though - the same subsection says the licensee "is not relieved of the duties imposed by paragraph (a) of subsection 1 of NRS 645.252," the duty to disclose known material facts.