Nevada Real Estate Broker Exam — All Questions

The booklet Nevada licensees know as the Residential Disclosure Guide is, under NRS 645.194, prepared by:

• a.the seller, who completes it about the property before the property is listed for sale
• b.the county assessor, who issues it together with the property's current tax record
• c.the Real Estate Division, and licensees must distribute it to prospective buyers and sellers✓
• d.the listing broker, who drafts it from the brokerage's own transaction files

NRS 645.194(1) requires the Division to prepare "a booklet that provides relevant information concerning the disclosures that are required by federal, state and local laws and regulations by a buyer and a seller in a transaction involving the sale of residential property." Subsection 2 requires the Division to make copies available to licensees, "which the licensee must distribute to prospective buyers and sellers in the sale of residential property in accordance with the regulations adopted by the Commission," and subsection 3 gives the Commission approval over the booklet's format and content. So the guide is a state-authored consumer summary that the licensee hands out - it is not a seller's statement about a particular house, not an assessor's product, and not something a brokerage writes for itself. The Seller's Real Property Disclosure under NRS 113.130 is a different document with a different author, a different audience and a different subject. "Residential property" here carries the meaning given in NRS 113.100.

Under NRS 113.130, the completed Seller's Real Property Disclosure form must be served on the purchaser or the purchaser's agent:

• a.at least 5 days before the residential property is conveyed to the purchaser
• b.within 10 days after the purchase agreement is signed by both of the parties
• c.at least 10 days before the residential property is conveyed to the purchaser✓
• d.at any point before the close of escrow, so long as escrow has not yet closed

NRS 113.130(1)(a) requires that "[a]t least 10 days before residential property is conveyed to a purchaser," the seller complete a disclosure form and the seller or the seller's agent serve the purchaser or the purchaser's agent with the completed form. The clock runs backwards from conveyance, not forward from the signing of the contract, which is why both the five-day figure and the post-signing window are wrong, and why an open-ended "any time before closing" is wrong as well. The section lists the sales it does not reach - foreclosure under Chapter 107, transfers between co-owners, spouses or relatives within the third degree of consanguinity, the first sale of a residence built by a licensed contractor, and certain temporary-title and fiduciary transfers - and subsection 3 forbids waiver: the purchaser may not waive the subsection 1 requirements and the seller may not make waiver a condition of sale.

A Nevada seller asks his listing agent to fill out the Seller's Real Property Disclosure for him, since the agent has seen the house more recently. Under NRS 113.130:

• a.the agent may complete the form if the seller signs it and the purchaser initials the change
• b.the agent may not complete the form for the seller, and the purchaser cannot waive the requirement✓
• c.the agent may complete the form, because the agent is the seller's authorized representative
• d.the agent may complete the form if the brokerage keeps the draft in the transaction file

NRS 113.130(1)(a) assigns the completing of the form to the seller and then says so in terms: "A seller's agent shall not complete a disclosure form regarding the residential property on behalf of the seller." No signature, initial or file note cures that, and being the seller's authorized representative is exactly the status the sentence is written to exclude. Subsection 3 adds that the purchaser may not waive the requirement and the seller may not require waiver as a condition of sale. The division of responsibility runs through the section: NRS 113.130(1)(c) protects the seller's agent from damages where the seller conceals a defect on the form or fails to report a newly discovered or worsened defect - but that protection expressly does not affect the agent's own duty under NRS 645.252(1)(a) to disclose material facts the agent knows. NRS 113.140 completes the picture: the form warrants nothing, the seller need not disclose defects he does not know about, and the buyer still owes himself reasonable care.

A Nevada seller never serves the disclosure form required by NRS 113.130. Under NRS 113.150(1), the purchaser may:

• a.rescind the purchase agreement without penalty within 4 working days after the closing
• b.recover treble damages only, rescission not being available for a failure to serve the form
• c.rescind the purchase agreement without penalty at any time before conveyance of the property✓
• d.compel the seller to complete the form, but may not rescind on that ground alone

NRS 113.150(1) provides that if a seller or the seller's agent fails to serve a completed disclosure form as NRS 113.130 requires, "the purchaser may, at any time before the conveyance of the property to the purchaser, rescind the agreement to purchase the property without any penalties." The remedy is rescission before conveyance, so answers that push it past closing or that deny rescission altogether misstate it. The four-working-day figure belongs to a different situation: NRS 113.150(2) and (3) cover a defect the seller does disclose before conveyance, and rescission on that ground is effective only if made in writing, notarized and served within 4 working days after the purchaser is informed of the defect. Treble damages exist too, under NRS 113.150(4), but they apply where the seller conveys without complying and a known defect surfaces - an action to be brought within 1 year after discovery or 2 years after conveyance, whichever is later - and they are an additional remedy rather than the only one.

A buyer of a Nevada condominium receives the association's resale package on a Monday. Under NRS 116.4109, the buyer may cancel the purchase contract by written notice until:

• a.midnight of the third business day following the date the resale package was received
• b.midnight of the fifth calendar day following the date the resale package was received✓
• c.midnight of the tenth calendar day following the date the purchase contract was signed
• d.the close of escrow, because the resale package carries no separate cancellation period

NRS 116.4109(2) gives the purchaser the right to "cancel the contract of purchase until midnight of the fifth calendar day following the date of receipt of the resale package," and requires the contract itself to say so. The clock runs from receipt of the package, not from the signing of the contract, and it is measured in calendar days. Cancellation is without penalty and all payments made before cancellation must be refunded promptly, but a purchaser who has already accepted a conveyance of the unit loses both the cancellation right and any claim for damages or rescission based solely on the package not having been furnished. The rest of the section fixes the association's own obligations: within 10 calendar days after a written request from the unit's owner or the owner's authorized agent, the association must furnish the declaration, bylaws, rules, information statement, current budget and year-to-date financial statement, plus a certificate carrying the assessment and unpaid-obligation information. If the association misses those 10 days the purchaser is not liable for the delinquent assessment, and a resale package stays effective for 90 calendar days.

A Nevada licensee is buying a rental house for a limited-liability company she has an ownership interest in. Under NAC 645.640, the written disclosure she must make first has to state that she is acting for that entity and that:

• a.she holds a Nevada real estate license, whether that license is active or inactive✓
• b.she holds an active Nevada real estate license, no disclosure being needed if it is inactive
• c.she will not claim a commission on the purchase from any party to the transaction
• d.she has notified the Division of the purchase on a form the Division supplies

NAC 645.640(1) bars a licensee from acquiring, leasing or disposing of any time share, real property or interest in either for himself or herself, a member of the immediate family, the firm or a member of it, or any entity in which the licensee has an interest as owner, unless the licensee first discloses in writing both that he or she is doing so for that person, firm or entity and that he or she "is a licensed real estate broker, licensed real estate broker-salesperson or licensed real estate salesperson, whether his or her license is active or inactive." The phrase "active or inactive" is the point of the rule - a licensee cannot step out of the disclosure by deactivating. Nothing in the regulation turns on a commission or on a filing with the Division. Subsection 2 extends the same disclosure into any advertisement of the property or of the licensee's wish to enter such a transaction, and NRS 645.252(1)(c) requires disclosure to each party as soon as practicable that the licensee is a principal to the transaction or has an interest in one.

NRS 40.770 makes certain facts about a Nevada property not material to a sale, lease or rental. Which of the following is NOT sheltered by that statute?

• a.That the property was the site of a homicide unrelated to any condition of the property
• b.That a registered sex offender resides or is expected to reside in the community
• c.That a facility for transitional living for released offenders is located near the property
• d.That the property was used to manufacture methamphetamine and has not been remediated✓

NRS 40.770(1)(b) shelters the fact that a property was the site of a felony, but it writes one crime out of the shelter on its face - "a crime that involves the manufacturing of any material, compound, mixture or preparation which contains any quantity of methamphetamine." Subsection 6 then restores the shelter for that crime only if all methamphetamine materials and substances have been removed or remediated by a certified or licensed entity, or the board of health has deemed the property safe for habitation. An unremediated methamphetamine property therefore falls outside the statute. The other three are squarely inside it: subsection 1(a) covers a homicide, suicide or any other death except one resulting from a condition of the property; subsection 2 covers a sex offender residing or expected to reside in the community and expressly removes any duty to disclose it; and subsection 3 covers a nearby licensed facility for transitional living for released offenders. Subsection 1(c) adds occupancy by a person exposed to or suffering from a disease not known to be transmitted through occupancy. None of this touches the separate duty to disclose known material defects in the property's physical condition.