Nevada Real Estate Broker Exam — All Questions

Nevada issues three add-on credentials to people who already hold a license under NRS Chapter 645 or who work in association management. Which pairing of credential to the noun the statute actually uses is correct?

• a.Business broker - certificate; property management - certificate; community manager - permit
• b.Business broker - permit; property management - certificate; community manager - permit
• c.Business broker - certificate; property management - permit; community manager - certificate
• d.Business broker - permit; property management - permit; community manager - certificate✓

Nevada uses two different nouns and uses them consistently. NRS 645.863 is headed "Permit to engage in business as business broker" and lets a licensee apply to the Division for that permit. NRS 645.6052 is headed "Permit to engage in property management" and does the same for property managers. Community association management sits outside Chapter 645 altogether: NRS 116A.400(1) provides that "a person shall not act as a community manager unless the person holds a certificate." So business broker and property manager are permits and the community manager credential is a certificate. Reaching for "permit" on the community manager is the natural error precisely because Nevada does issue permits in this field - just not for that role. The three other pairings each swap at least one noun. Each of the two permits carries its own instruction requirement under its own section, and the certificate is governed by Chapter 116A rather than by Chapter 645.

A Nevada salesperson wants to manage rental property for owners. Under NRS 645.6052, before the Division will issue the permit she must show that she has completed:

• a.at least 12 classroom hours of instruction in property management
• b.at least 45 classroom hours of instruction in property management
• c.at least 60 classroom hours of instruction in property management
• d.at least 24 classroom hours of instruction in property management✓

NRS 645.6052(2)(a) requires an applicant for a property management permit to furnish proof "that the applicant has successfully completed at least 24 classroom hours of instruction in property management," plus any other requirements the Commission sets. The permit expires and renews with the holder's license, and NRS 645.6052(4)(a) makes renewal conditional on at least 3 of the licensee's continuing education hours being in an approved property management course, seminar or conference. Twelve, 45 and 60 hours are not the figure; the larger totals belong to the college-level course work a broker applicant documents under NRS 645.343, which is a different requirement attached to a different credential. Note also NRS 645.6054: a partnership, corporation or limited-liability company may not engage in property management unless the person it designates has been issued the permit, and a sole-proprietor broker must designate someone licensed under the broker.

NAC 645.600 allows a Nevada broker to use a broker-salesperson to help administer the brokerage's supervision system. The limit the regulation places on that arrangement is that the broker:

• a.must first obtain the Division's written approval of the delegation of those duties
• b.may delegate the review of advertising only, and not the review of transactions, documents or trust accounts
• c.must reduce the delegation to an independent-contractor agreement with that licensee
• d.does not relinquish overall responsibility for supervising the acts of the associated licensees✓

NAC 645.600(4) requires the broker to establish a system for monitoring compliance with the brokerage's policies and then adds: "The real estate broker may use a real estate broker-salesperson to assist in administering the provisions of this section so long as the real estate broker does not relinquish overall responsibility for the supervision of the acts of the licensees associated with the real estate broker." Responsibility is what cannot be handed over; the tasks can be. No Division approval is involved, no subject-matter limit confines the delegation to advertising, and the independent-contractor agreement in subsection 5 is an optional arrangement with an associated licensee, not a condition of delegating supervisory administration. Subsection 1 states the underlying duty - the broker must teach associated licensees the fundamentals and ethics of the practice and supervise their activities, the employees and the operation of the business - and subsection 2 spells out what supervision covers: transactions, documents affecting the parties' rights, filing and storage of documents, money received on the broker's behalf, advertising, and the licensees' familiarity with federal and state law including the prohibitions on discrimination.

A Nevada broker who is the only broker in her office plans to be away from the business for six weeks. Under NAC 645.665 she must:

• a.inactivate her license, or notify the Division in advance and designate an office manager✓
• b.post notice of the absence at the office and leave a licensee in charge of the trust account
• c.transfer the office's listings to a cooperating broker and notify each client in writing
• d.do nothing, because the regulation reaches only absences of 90 days or more

NAC 645.665 provides that a broker "shall not be absent from his or her business for 30 days or more if the broker is the only broker in his or her office unless the broker inactivates his or her license or otherwise notifies the Division in advance," that failure to observe the requirement is a ground for suspension, and that a broker who will be absent for 30 days or more must designate an office manager in accordance with NAC 645.178 or make other arrangements approved by the Division in advance. Six weeks is well past the 30-day trigger, so the do-nothing answer fails on the threshold as well as on the substance. Posting a notice and handing the trust account to a licensee addresses neither the Division notice nor the management gap - and NAC 645.655(6) separately forbids a salesperson from being the only required signatory on a trust account. Moving the listings to another broker is not what the regulation asks for. Under NAC 645.178, the manager may be a broker-salesperson with at least 2 years of active licensed experience in the immediately preceding 4 years, who must notify the Division that he or she is acting in that capacity.

A Nevada salesperson closes a sale and asks the escrow officer to wire her share of the commission straight to her. Under NRS 645.280(2), she:

• a.may accept it directly, provided her broker consents to the arrangement in writing
• b.may accept it directly, provided the amount matches her written commission split
• c.may accept it directly, because escrow is a neutral third party rather than a principal
• d.may not accept compensation from anyone other than the broker under whom she is licensed✓

NRS 645.280(2) provides that "[a] real estate broker-salesperson or salesperson shall not be associated with or accept compensation from any person other than the broker or owner-developer under whom he or she is licensed at the time of the real estate transaction." The rule is about the source of the payment, so neither the broker's written consent, nor an accurate split, nor escrow's neutrality changes the answer. NRS 645.630(1)(c) makes accepting a commission from anyone but the associated broker or owner-developer an independent ground for discipline, and NRS 645.280(3) closes the circle from the other direction: a broker-salesperson or salesperson may not pay a commission to anyone except through that broker or owner-developer. A licensee may be associated with only one broker or owner-developer at a time (NRS 645.520(3)).

Under NRS 645.280(1), a Nevada broker may lawfully pay part of a commission arising from a real estate transaction to:

• a.an unlicensed neighbor who introduced the buyer
• b.an unlicensed assistant who prepared the listing
• c.a licensed real estate broker of another state✓
• d.an unlicensed relative who arranged the showings

NRS 645.280(1) makes it unlawful for a licensed broker, broker-salesperson or salesperson to give or pay, directly or indirectly, any part of a commission, compensation or finder's fee arising from a real estate transaction "to any person who is not a licensed real estate broker, broker-salesperson or salesperson, in consideration of services performed or to be performed by the unlicensed person," and then carves out one exception in the next sentence: "A licensed real estate broker may pay a commission to a licensed broker of another state." Introducing a buyer, preparing a listing and arranging showings are all services performed in the transaction, so paying an unlicensed person for any of them is exactly what the subsection forbids - the relationship to the licensee makes no difference. NRS 645.633(1)(c) repeats the prohibition as a ground for discipline, again excepting payments to a broker licensed in his or her state of residence.

A Nevada broker-salesperson posts one of the brokerage's listings on social media. Under NRS 645.315 and NAC 645.610, the post must carry:

• a.the licensee's license number and the seller's written consent to the posting
• b.the name of the brokerage and the Division's advertising approval number
• c.the licensee's license number and the property's assessor parcel number
• d.the licensee's license number and the name of the brokerage, identified with prominence✓

NRS 645.315(1) requires a licensee advertising services for which a license is required to include his or her license number and to disclose the name of the brokerage with which the licensee is associated. NAC 645.610(1)(c) adds that the brokerage's name "must be clearly identified with prominence in any advertisement," and directs the Division to weigh the style, size and color of the type and the placement of the name in deciding whether it is prominent; paragraph (1)(e) requires the license number to appear "in a conspicuous way." NAC 645.610(4) defines advertisement broadly enough to reach the post: unsolicited printed media, brochures and flyers, broadcast media, unsolicited email and social media, the internet, billboards and signs, plus business cards, stationery and forms used in a transaction. The Division issues no advertising approval numbers to Chapter 645 licensees, a seller's consent is not what the advertising rules require, and no parcel number is called for. NRS 645.315(2) adds that a broker-salesperson or salesperson may never advertise solely under his or her own name; the advertising must be under the direct supervision of and in the name of the brokerage.

A Nevada salesperson advertises for lease a rental house she owns herself. Under NAC 645.610(1)(b), the advertisement:

• a.may carry her name only if it says "for lease by owner-agent" or substantially similar words✓
• b.may carry her name only if the brokerage's name is left out of the advertisement entirely
• c.may say "for lease by owner" without more, because she is the owner rather than a listing agent
• d.may carry her name only if she first places her salesperson license on inactive status

NAC 645.610(1)(b) forbids a licensee from using his or her name or telephone number in any advertisement containing the words "for sale by owner," "for lease by owner" or similar words, then supplies the exception: a licensee with an ownership interest in the advertised property may use his or her name or telephone number if the advertisement says "for sale by owner-broker" or "for lease by owner-broker" where the licensee is a broker, or "for sale by owner-agent" or "for lease by owner-agent" where the licensee is an agent, or substantially similar words. A salesperson is in the agent category. A bare "for lease by owner" is the very phrasing the rule prohibits, because it hides the license from the public. Omitting the brokerage name would breach NAC 645.610(1)(c), and no rule asks a licensee to inactivate a license in order to advertise her own property. NAC 645.640 requires a parallel written disclosure whenever a licensee acquires, leases or disposes of property for herself, her family, her firm or an entity she has an interest in - including in the advertising.

Under NRS 645.2515, a broker's price opinion prepared by a Nevada licensee for an existing or potential lienholder:

• a.may be used in lieu of an appraisal if the lienholder accepts it in writing beforehand
• b.may not be used in lieu of an appraisal for deciding whether to approve a mortgage loan✓
• c.may not be prepared at all, because lienholders are outside the permitted list of recipients
• d.may be used in lieu of an appraisal if the licensee also holds a property management permit

NRS 645.2515(2)(d) puts an existing or potential lienholder on the list of persons a licensee may prepare a broker's price opinion for - so the answer that bars lienholders altogether is wrong - but attaches the limit in the same paragraph: such an opinion "may not be used in lieu of an appraisal for the purpose of determining whether to approve a mortgage loan." That limit is statutory and cannot be waived by the lender's written acceptance, and a property management permit has nothing to do with it. Subsection 1 lets a licensee prepare a price opinion and charge a fee only while the license is active and in good standing and only if the opinion meets subsection 3, which requires the intended purpose, a description of the property and interest, the basis used including market data and any capitalisation computation, assumptions and limiting conditions, the date of issuance, a disclosure of every preparing licensee's existing or contemplated interest, and each preparer's license number, name and signature.

A Nevada salesperson receives a buyer's earnest-money check on a contract that all parties have signed. Under NAC 645.657, she must pay it over to her broker or to the escrow designated in the contract:

• a.within 3 business days after receiving the fully executed contract
• b.within 5 calendar days after receiving the fully executed contract
• c.within 1 business day after receiving the fully executed contract✓
• d.before the end of the next banking day after receiving the fully executed contract

NAC 645.657 provides that a licensee who receives a deposit on a transaction in which he or she is engaged on behalf of a broker or owner-developer "shall pay over the deposit to that broker or owner-developer, or to the escrow business or company designated in the contract, within 1 business day after receiving a fully executed contract." The three-day and five-day answers stretch the rule. The next-banking-day answer names a real Nevada deadline attached to the wrong person: NRS 645.630(1)(k) sets the broker's own deadline for banking earnest money after an agreement is accepted, and it is measured in banking days rather than business days. The salesperson's clock runs to the broker; the broker's clock runs to the bank. NRS 645.310(2) states the same principle generally: a salesperson or broker-salesperson who receives money on a broker's behalf shall pay it over to the broker promptly.