New York Real Estate Broker Exam — All Questions

A new environmental ordinance leaves a landowner with no economically viable use of a parcel, although the government takes no title to it. The owner's strongest constitutional claim is:

• a.The ordinance is void because zoning cannot restrict use
• b.A regulatory taking entitling the owner to payment✓
• c.Escheat has occurred and the state now owns the parcel
• d.Spot zoning, since only this parcel lost its value

Regulation that goes so far it denies an owner all economically viable use is treated as a regulatory taking, and just compensation is owed even though the government never took title. Arguing that zoning simply cannot restrict use fails, because regulating land is a valid exercise of the police power and owners have no right to the most profitable use. Escheat moves property to the state only when an owner dies with no will and no heirs, which has nothing to do with an ordinance. Spot zoning describes singling out one parcel for a different classification, not a general environmental rule applied to a class of land.

Reviewing a title report, a broker finds an old recorded covenant, written decades ago, that bars resale of the lot to members of a specified race. Its legal effect today is:

• a.It binds the buyer because it was recorded before purchase
• b.It is void, so a court will never enforce it or enjoin it✓
• c.It stays valid until the homeowners association removes it
• d.It is enforceable by the association but not by an owner

A private restriction that discriminates on a protected basis is void and unenforceable under the federal Fair Housing Act and the Civil Rights Act of 1866, so no court will order compliance or enjoin a violation, and the association has no power the courts would back. Recording rescues nothing, because an illegal restriction gains no force from sitting in the public record. No association vote is required to strip it of effect, although many states let an owner have the language formally struck. Valid CC&Rs, by contrast, are enforced privately by injunction brought by an owner or the association. A broker must never repeat or give effect to such language.

A grantor signs and notarizes a deed naming a nephew as grantee, locks it in a safe deposit box, and tells no one. The grantor later dies. What is the deed's effect?

• a.Title passed when the grantor signed the deed
• b.Title passed because the deed was acknowledged
• c.No title passed, because delivery never occurred✓
• d.Title passes when the estate later records it

A deed operates only when the grantor delivers it with the present intent to pass title and the grantee accepts, and both must happen while the grantor is alive. Signing accomplishes nothing while the instrument stays under the grantor's control in a box no one knows about. Acknowledgment before a notary serves recording, not validity, so notarizing it changes nothing here. An estate representative cannot supply the delivery the grantor failed to make, and recording an undelivered deed does not revive it. The nephew takes only through the will or the intestacy statute, which is why closings hand over the executed deed rather than merely signing it.

A deed is signed by a competent grantor and handed to a grantee who accepts it, but the grantor's signature was never notarized. As between those two parties, the deed is:

• a.Void, since notarizing is a validity requirement
• b.Valid, though it cannot be recorded as it stands✓
• c.Valid only if the grantee later pays a recording fee
• d.Voidable at the option of the grantor's creditors

Acknowledgment is a recording requirement, not an element of a valid deed. Delivered and accepted, the deed transfers title between grantor and grantee even with no notary, but the recorder will reject it, leaving the grantee exposed to later purchasers and lienholders who record first. Calling it void confuses the two ideas: validity turns on a competent grantor, an identifiable grantee, words of conveyance, an adequate legal description, the grantor's signature, and delivery and acceptance. Paying a fee cannot cure a missing acknowledgment, because the recorder cannot accept the instrument at all. Creditors of the grantor gain no power to undo a completed conveyance.

In a deed, which clause opens with the words 'to have and to hold' and defines the extent of the estate the grantee is receiving?

• a.The granting clause containing the words of conveyance
• b.The habendum clause, following the granting clause✓
• c.The acknowledgment taken before a notary public officer
• d.The legal description identifying the land conveyed

The habendum clause follows the granting clause, begins with the traditional phrase 'to have and to hold,' and spells out the estate conveyed, for example a fee simple absolute or a life estate. The granting clause holds the words of conveyance that actually transfer the interest and names the grantee. The acknowledgment is the notary's certificate that the signature is genuine, which the recorder requires but the transfer does not. The legal description identifies the land by metes and bounds, lot and block, or government survey, and it fixes what is conveyed rather than how much of an estate. Reading both clauses tells a broker exactly what the buyer is getting.

A relocation company that has owned a home for three months conveys it, warranting title only against defects that arose during its own ownership. The deed it delivers is a:

• a.Bargain and sale deed implying ownership without covenants
• b.General warranty deed covering the entire chain of title
• c.Quitclaim deed conveying only the interest actually held
• d.Special (limited) warranty deed covering the grantor's period✓

Warranting only against defects created or suffered while the grantor held title describes the special or limited warranty deed, the customary instrument for corporate, relocation, and fiduciary sellers who cannot vouch for what earlier owners did. A general warranty deed reaches back through the whole history of the property and offers the broadest protection, which is more than this seller is giving. A quitclaim carries no warranties at all and passes only whatever interest the signer happens to hold. A bargain and sale deed implies that the grantor owns the property but adds few or no covenants. A buyer taking narrower covenants should lean on an owner's title policy.

A title search shows that a seller's former spouse may still hold a possible interest in the property. What is the usual instrument used to release that interest and clear the record?

• a.A quitclaim deed from the former spouse✓
• b.A general warranty deed from the former spouse
• c.A trustee's deed issued after a foreclosure
• d.A correction deed fixing the legal description

A quitclaim releases whatever interest the signer may hold, with no warranties attached, which makes it the standard tool for removing a cloud such as a possible marital interest, a stale easement claim, or a name discrepancy. Demanding a general warranty deed asks the former spouse to guarantee title he or she may never have owned, and it is normally refused. A trustee's deed is what the trustee under a deed of trust issues to the purchaser at a foreclosure sale. A correction deed reforms a mistake in an earlier deed between the same parties and cannot release an outsider's claim.

A court-appointed personal representative sells a decedent's home during probate, and the buyer's broker asks what instrument will convey title. The answer is:

• a.A trustee's deed given after a nonjudicial foreclosure
• b.A sheriff's deed issued following a judicial sale
• c.A general warranty deed with full title covenants
• d.An executor's or personal representative's deed✓

Estate property is conveyed by an executor's deed when a will names the executor, or by a personal representative's or administrator's deed when the court makes the appointment; these deeds recite the court authority and give only limited covenants. A trustee's deed comes from the trustee under a deed of trust after a nonjudicial foreclosure sale. A sheriff's deed, called a referee's deed in some states, follows a judicial sale ordered by a court. A general warranty deed is not used, because a fiduciary will not personally guarantee title against the acts of the decedent or of owners further back in the chain.

After closing under a general warranty deed, a buyer discovers a recorded utility easement that the deed never disclosed. Which covenant did the grantor breach?

• a.Quiet enjoyment, a promise against eviction by better title
• b.Seisin, a promise that the grantor owns the estate conveyed
• c.Against encumbrances, a promise of no undisclosed burdens✓
• d.Further assurance, a promise to sign curative papers

The covenant against encumbrances promises that no liens, easements, or similar burdens exist beyond those the deed discloses, so a recorded easement left unmentioned breaches it at the moment of delivery. Seisin promises the grantor actually owns the estate being conveyed, which is not the trouble when ownership is sound but burdened. Quiet enjoyment shields the grantee from later eviction by someone holding superior title, and an easement holder's use is not an eviction. Further assurance obliges the grantor to sign additional documents needed to perfect title. A general warranty deed carries all of these along with the right to convey and warranty forever.

A neighbor has openly farmed and fenced a strip of an absentee owner's land, excluding others and never asking permission. To take title by adverse possession the neighbor must prove:

• a.Payment of the owner's property taxes for every year
• b.Open, notorious, continuous, hostile, and exclusive possession✓
• c.A written agreement signed by the record title owner
• d.A recorded deed describing the disputed strip of land

Adverse possession requires possession that is open and notorious, continuous, hostile in the sense of being without permission, and exclusive, held for the statutory period set by state law. Some states add payment of taxes or color of title, but those elements are not universal, so a broker should never assume them from another state's rule. A written agreement from the record owner would destroy the claim outright, since permission defeats hostility. Recording a deed creates no possession and cannot manufacture the required years of use. Adverse possession is one form of involuntary alienation, alongside descent, escheat, foreclosure, eminent domain, and accretion.

An owner dies leaving no will, and after a diligent search no heirs can be located. A broker asked to list the property should understand that title:

• a.Passes by devise to the beneficiaries named in a will
• b.Descends to the decedent's nearest surviving creditors
• c.Vests permanently in the administrator the court appoints
• d.Escheats to the state, an involuntary transfer of title✓

Escheat is the state's claim to property when an owner dies intestate and no heirs can be found, and it is a classic involuntary transfer rather than a voluntary one by deed or will. Devise is a gift of real property by will, so it cannot operate where there is no will and no named beneficiary. Descent carries property to heirs under the intestacy statute, but creditors are paid as claimants out of the estate and never inherit the land itself. An administrator has authority to manage and convey estate property during probate, not to own it permanently. Each state sets its own escheat procedure and waiting period.

A search reveals an old mortgage of record that was paid off but never released, and the lender no longer exists. Which step clears that cloud so title is marketable?

• a.Ordering an abstract of title with an attorney's opinion
• b.Buying an owner's title policy that insures over it
• c.Filing a quiet title action asking a court to clear it✓
• d.Recording a correction deed signed by the current seller

A quiet title action asks a court to determine ownership and extinguish a stale or unreleasable claim, which is the practical cure when the mortgagee has vanished and no release can be obtained. An abstract of title with an attorney's opinion summarizes and evaluates the recorded chain; it reports the cloud rather than removing it, and it offers no indemnity. An owner's policy may insure over a known risk, but insurance pays for loss and leaves the defect on the record for the next buyer to confront. A correction deed fixes a drafting error between the original parties and cannot release a third party's lien.

A seller deeds a parcel to one buyer and later deeds the same parcel to a second buyer, who records first. Which framework decides who owns the land?

• a.A federal recording statute applied in all fifty states
• b.The state's recording act, race, notice, or race-notice✓
• c.The order in which the two deeds were signed and dated
• d.The county recorder's discretion over competing claims

Priority between competing grantees is governed by the recording act of the state where the land lies, and the schemes differ: a pure race state protects whoever records first, a notice state protects a later purchaser who took without notice of the earlier deed, and a race-notice state protects one who took without notice and recorded first. No federal statute governs land recording. Signing dates do not decide the contest, which is precisely why a public recording system exists. Recorders act ministerially and have no power to resolve claims. Because the gap between closing and recording is the danger zone, a broker should press for prompt recording.

A buyer pays for a lender's title policy at closing and asks the broker whether it also protects the buyer's equity in the home. The correct answer is that the policy:

• a.Protects both parties equally up to the full purchase price
• b.Protects the buyer once the mortgage has been fully repaid
• c.Protects the buyer against defects arising after closing
• d.Protects only the lender, declining with the balance✓

A lender's, or mortgagee's, policy insures only the lender's security interest, and its coverage shrinks as the principal is paid down, ending altogether when the loan is satisfied. It never covers the buyer's equity, which is why a separate owner's policy is offered at closing for a one-time premium and lasts as long as the insured holds an interest. Repaying the mortgage does not convert the lender's coverage into the buyer's; it extinguishes it. And no title policy insures defects that first arise after its date. Brokers should explain this plainly before a buyer waives owner's coverage to save money.

Six months after closing, a contractor the buyer hired records a mechanic's lien against the home. The buyer files a claim under the owner's title policy. The insurer will most likely:

• a.Deny, because the defect arose after the policy was issued✓
• b.Pay, because owner's policies cover all future liens
• c.Pay, because the standard exceptions were removed
• d.Deny, because only a lender may file a title claim

Title insurance looks backward: it covers defects that already existed when the policy was issued but were not discovered or excepted, not events that happen later. A lien for work the buyer ordered after closing is a new problem the buyer must resolve directly. Buying extended coverage removes standard exceptions and broadens what is insured as of the policy date, but it does not push coverage forward in time. Owners plainly may claim under their own policies; the lender's policy is the one limited to the lender. Extended coverage typically depends on a current survey, which reveals encroachments and boundary issues a records search alone cannot.

A buyer tours a house and finds an occupant who is not the seller living there under an unrecorded lease. What kind of notice does that occupancy give the buyer?

• a.Actual notice, given by the seller's written disclosure
• b.Constructive notice, given by the public record
• c.No notice at all, since the lease was not recorded
• d.Inquiry notice, requiring the buyer to ask about it✓

Someone in possession who is not the seller puts a buyer on inquiry notice: the buyer is charged with whatever a reasonable investigation of that occupancy would have turned up, including an unrecorded lease or an option to purchase. Actual notice is what a party genuinely knows, typically from a disclosure or a conversation, and no one has told this buyer anything. Constructive notice comes from the public record, which by definition cannot reveal an unrecorded lease. Treating an unrecorded interest as invisible is the classic error, because possession is itself notice. A broker should always ask who occupies a property and on what terms.

Which agency issues, renews and revokes real estate broker licenses in New York?

• a.The Department of State, Division of Licensing Services✓
• b.The Office of the Attorney General, Real Estate Finance Bureau
• c.The Division of Housing and Community Renewal
• d.The Department of Financial Services, Real Estate Bureau

Real Property Law § 441 directs a broker applicant to file the application with the Department of State at its office in Albany, § 441-a has the Department issue the license and pocket card, and § 441-c gives the Department the power to revoke or suspend a license or impose a fine. Within the Department that work is done by the Division of Licensing Services. The Department of Financial Services supervises banks, insurers and mortgage bankers, so a real estate credential does not begin or end there. The Attorney General does have a real estate role, but it is reviewing cooperative and condominium offering plans and prosecuting article 12-A crimes under § 442-e(2), not licensing. The Division of Housing and Community Renewal administers rent regulation, which reaches what an owner may charge, not who may broker.

New York's real estate license law and the rules that implement it are found at:

• a.Banking Law article 12-D and 3 NYCRR parts 38 to 42
• b.Real Property Law article 12-A and 19 NYCRR parts 175 to 179✓
• c.Real Property Law article 9-A and 19 NYCRR parts 190 to 194
• d.General Business Law article 23-A and 13 NYCRR parts 20 to 24

The Department of State's own broker syllabus names the pairing verbatim: “article 12A and the Rules and Regulations (R&Rs) found in 19NYCRR, Parts 175 to 179.” Article 12-A runs from § 440 to § 443-a and carries the definitions, the license requirement, discipline and the agency disclosure form; part 175 carries the conduct rules, 176 course approval, 177 continuing education, 178 nonsolicitation orders and 179 the experience point system. Real Property Law article 9-A governs the sale of subdivided land, a separate DOS program. General Business Law article 23-A is the Martin Act, which is where cooperative and condominium offering plans are filed rather than where licensees are regulated. Banking Law article 12-D covers mortgage bankers and brokers, a different license entirely.

A New York licensee who has qualified for a broker license but elects to work under the name and supervision of another broker is:

• a.a supervising branch broker
• b.an associate real estate broker✓
• c.a provisional real estate licensee
• d.a designated sales associate

Real Property Law § 440(2) defines an associate real estate broker as a licensed broker who by choice elects to work under the name and supervision of another broker, keeps the broker license, and is then governed by the provisions of article 12-A that apply to salespersons. New York has no provisional license class, so that label describes nothing in article 12-A. A designated sales agent is defined at § 443(1)(j) as a licensee assigned to represent one client when the same broker also represents another client in the same transaction, which is a role in a particular deal rather than a license level. A supervising branch broker is not a statutory class either; § 441-a(3) puts each branch office under the broker to whom the license is issued, a representative broker, a manager of the limited liability company, or a duly appointed office manager.

Before an associate broker may be appointed an office manager, Real Property Law § 440(6) requires that the licensee have been:

• a.active as a licensed real estate salesperson for at least five consecutive years
• b.employed by the same brokerage for at least four of the six preceding years
• c.active as a licensed associate broker for at least two of the four preceding years✓
• d.licensed as an individual real estate broker for at least three of the past six years

Section 440(6) defines an office manager as a licensed associate real estate broker who elects to work as an office manager, and it adds one qualifying condition in the operative sentence: the person “shall be required to have been active as a licensed associate broker for at least two of the four years preceding appointment as an office manager.” The statute then requires the office manager to exercise the same duty of supervision over salespersons and associate brokers as a licensed broker. Salesperson service does not count toward the condition, because the text asks for time as an associate broker. Nothing in § 440(6) measures time at a single firm, and the statute does not set a separate seasoning period for an individual broker license.

Real Property Law § 440-a sets New York's minimum licensing ages at:

• a.twenty-one years of age for a broker, and over eighteen for a salesperson
• b.twenty-five years of age for a broker, and over twenty for a salesperson
• c.eighteen years of age for a broker, and over sixteen for a salesperson
• d.twenty years of age for a broker, and over eighteen for a salesperson✓

Section 440-a states that no person is entitled to a broker license “unless they are twenty years of age or over” and no person is entitled to a salesperson license “unless they are over the age of eighteen years.” Twenty is unusual enough that candidates reach for eighteen or twenty-one by habit, and both are wrong on the face of the statute. The same section adds two further gates that are easy to miss: a criminal conviction bars licensure unless the Secretary makes a finding consistent with Correction Law article 23-A, and the applicant must meet the requirements of General Obligations Law § 3-503.

The 152 hours of qualifying education a New York broker applicant must show consists of:

• a.a 90-hour broker course plus 62 hours of continuing education
• b.the 77-hour salesperson course plus the 75-hour broker course✓
• c.the 77-hour salesperson course plus 75 hours of experience credit
• d.a single 152-hour broker qualifying course taught in one program

Real Property Law § 441(1)(b) requires proof that the applicant “has attended for at least one hundred fifty-two hours and has successfully completed a real estate course or courses approved by the secretary of state.” The regulation says how that number is built: 19 NYCRR § 176.4 requires completion of an approved salesperson's course and an approved broker's course, and its two tables print 77 hours and 75 hours. Experience is a separate requirement in the same subdivision and cannot be traded for classroom hours. There is no single 152-hour course; a school must see proof that the salesperson course is finished before enrolling a student in the broker course.

Under 19 NYCRR part 179, the experience credit that equates to two years of full-time experience is:

• a.5,000 points, with a residential sale worth 100 points
• b.2,000 points, with a residential sale worth 500 points
• c.3,500 points, with a residential sale worth 250 points✓
• d.1,750 points, with a residential sale worth 125 points

Section 179.2(b) states flatly that “3500 points shall equate to two years of full-time experience,” and the schedule at § 179.3 values a residential sale — a single family, condominium, cooperative unit, two-to-eight-unit multi-family or a farm under 100 acres with a residence — at 250 points. The same schedule pays 10 points for an exclusive listing and 1 point for an open listing, so listings alone will not carry an applicant. Section 179.1 keeps the statutory alternative alive: two years of full-time licensed salesperson experience under a broker, or the equivalent full-time experience in the general real estate business for at least three years. Section 179.2(c) lets the Department demand documentation before or after licensure, and a false claim of experience is grounds to deny, suspend or revoke.

19 NYCRR § 175.21(a) defines a New York broker's supervision of a salesperson as:

• a.written approval of each listing agreement before it is presented to a seller
• b.regular, frequent and consistent personal guidance, instruction and oversight✓
• c.an annual written performance review signed by both licensees and retained
• d.a monthly office meeting at which every open transaction is reviewed

The rule's operative sentence says supervision “shall consist of regular, frequent and consistent personal guidance, instruction, oversight and superintendence by the real estate broker with respect to the general real estate brokerage business conducted by the broker, and all matters relating thereto.” It is a continuing standard, which is why a single scheduled event — a yearly review or a monthly meeting — does not meet it, however well documented. Nor does the rule pick out one document for the broker to sign off on; it reaches the whole of the brokerage business. Subdivision (b) adds a records duty on both licensees, and subdivision (c) measures participation for licensing purposes at 35 hours a week for 50 weeks in each qualifying year.

After a New York salesperson's association with a broker is terminated, Real Property Law § 442-b provides that the salesperson may:

• a.operate independently so long as commissions are escrowed with a title company
• b.hold listings personally until the Department of State issues a new pocket card
• c.continue to work the existing pipeline for ninety days while seeking a new broker
• d.perform no licensed act until they become associated with another licensed broker✓

Section 442-b requires the broker to notify the Department of State as soon as the association ends, and it closes with the operative words: “No real estate salesperson shall perform any act within any of the prohibitions of this article from and after the termination for any cause of his association until he thereafter shall have become associated with a licensed real estate broker.” There is no grace period, so a pipeline of pending deals does not license further activity. Authority comes from the association, not from a card, so waiting on paperwork changes nothing. And escrowing money elsewhere does not cure unlicensed activity; 19 NYCRR § 175.14 separately makes the departing salesperson turn all listing information over to the broker.

A New York salesperson violates article 12-A. Under Real Property Law § 442-c, the sponsoring broker's own license is at risk only if the broker:

• a.employed more than one salesperson at the branch office where it occurred
• b.had actual knowledge of it, or retained the transaction's benefits✓
• c.failed to file a termination of association notice after learning of the conduct
• d.signed the listing agreement or the buyer agency agreement in the transaction

Section 442-c is unusually protective of the broker's license: no violation by a salesperson “shall be deemed to be cause for the revocation or suspension of the license of the broker, unless it shall appear that the broker had actual knowledge of such violation or retains the benefits, profits or proceeds of a transaction wrongfully negotiated by their salesperson.” Constructive knowledge is not enough, so signing the paperwork or running a larger office does not by itself expose the license. That is a narrower rule than the broker's separate duty to supervise under 19 NYCRR § 175.21, which the Department enforces on its own terms. The one absolute in § 442-c is different in kind: a broker is guilty of a misdemeanor for having an unlicensed person associated with the firm.

19 NYCRR § 175.1 requires a New York broker who receives a buyer's deposit to place it in a separate, special bank account within:

• a.three business days, and to safeguard it in a secure location until then✓
• b.five business days, and to notify the Department of State of the deposit
• c.thirty calendar days, and to credit any interest to the brokerage account
• d.one business day, and to obtain the seller's written consent to the deposit

Section 175.1 forbids commingling, requires a separate special bank account used exclusively for such money, sets the deposit deadline at “within three business days,” and says that until the money reaches that account “it shall be safeguarded in a secure location so as to prevent loss or misappropriation.” The same rule limits where the money may sit: nothing but a federally insured bank account, not a fund or an investment. Interest is the trap in the other options. Accrued interest “shall not be retained by, or for the benefit of, the broker except to the extent that it is applied to, and deducted from, earned commission, with the consent of all parties,” so routing it to the brokerage is exactly what the rule stops. No notice to the Department and no seller consent is part of the deposit step.

19 NYCRR § 175.23 requires a New York broker to keep records of each residential sale effected through the office for:

• a.seven years, in electronic form only, including the buyer's loan file
• b.ten years, in paper or electronic form, including the title report
• c.three years, in paper or electronic form, with the listing agreement✓
• d.one year, in paper form only, including the seller's closing statement

Section 175.23(a) says each licensed broker “shall keep and maintain for a period of three years, paper and/or electronic records of each transaction effected through his or her office” concerning one-to-four family dwellings, condominium units and cooperative apartments. The rule then lists what those records must contain: the names and addresses of seller and buyer; the purchase contract or binder, or else the price and the deposit amount if the broker did not prepare it; the commission paid; any gross profit if the broker bought for resale; any document required under article 12-A; and the listing, commission or buyer-broker agreement. The medium is the broker's choice, so a paper-only or electronic-only answer misreads the text. Subdivision (b) forgives the broker where a copy of a required document was never provided to the office.

Real Property Law § 442 permits a New York broker to share a commission with:

• a.an unlicensed referral service that advertises the listing on its own website
• b.a person regularly engaged in the brokerage business outside New York✓
• c.an attorney who reviewed the contract of sale on behalf of the seller's estate
• d.an unlicensed assistant who showed the property while the salesperson was away

Section 442 bars paying any part of a commission for help in a real estate transaction “unless such a person be a duly licensed real estate salesperson regularly associated with such broker or a duly licensed real estate broker or a person regularly engaged in the real estate brokerage business in a state outside of New York.” That last clause is the one candidates forget, and it is what lets a New York broker split with an out-of-state cooperating firm. Paying an unlicensed referral service or an unlicensed assistant who performed licensed activity is squarely outside the list. Paying the seller's attorney for legal review is compensation for a different service, not a permitted share of a brokerage commission, and § 442-a separately bars a salesperson from taking compensation from anyone but the associated broker.

Under 19 NYCRR § 175.19, a New York broker may not enter into a listing in which the broker's compensation is:

• a.a flat fee agreed in advance and payable whether or not the property sells
• b.a percentage of the sale price that varies with the marketing package chosen
• c.a share of the listing commission paid to a cooperating broker's firm
• d.the difference between the sale price and a net amount fixed by the seller✓

Section 175.19(a) defines a net listing as an agreement authorizing a sale at “a specified net amount to be paid to the seller and authorizing the broker to retain as commission, compensation, or otherwise, the difference between the price at which the property or interest is sold and the specified net amount to be received by the seller.” Subdivision (b) then bans it outright: “No real estate broker shall make or enter into a ‘net listing’ contract for the sale of real property or any interest therein.” The reason is the conflict it builds in — every dollar above the seller's number is the broker's, so the broker's interest runs against the client's. Flat fees, tiered percentages and co-brokerage splits are all lawful; none of them turns the seller's price floor into the broker's fee.

The explanation 19 NYCRR § 175.24 requires on an exclusive listing of New York residential property tells the owner that under an exclusive agency listing:

• a.the owner owes the listing broker a commission on any sale, however the buyer was found
• b.the owner owes no commission on any sale that closes after the listing termination date
• c.the owner owes nothing for a buyer the owner finds, but owes a broker who finds one✓
• d.the owner owes a commission only to the broker who first entered the listing in the MLS

The rule prints the wording the broker must attach or print on the listing and have the owner sign or initial, in type no smaller than six point. Of exclusive agency it says: “if you, the owner of the property find a buyer, you will not have to pay a commission to the broker. However, if another broker finds a buyer, you will owe a commission to both the selling broker and your present broker.” The first distractor states the exclusive right to sell instead, which the same explanation describes as owing the agreed commission whoever finds the buyer. Termination dates and multiple listing service entry are governed elsewhere — § 175.15 forbids an exclusive listing that automatically continues past its fixed termination date, and § 175.24(c) requires an MLS member's listing to give the owner the option of receiving offers through either broker.

Under 19 NYCRR § 175.25, a team advertising in New York must use a team name that:

• a.includes the word “agency” and the full name of a licensed team member
• b.includes the word “group” and the county in which the team is operating
• c.includes the word “team” and avoids “group”, “realty” and “associate”✓
• d.includes the word “realty” and the license number of the team leader

Section 175.25(e)(1) says team names “shall use the term ‘team’” and that “the use of any other terms besides ‘team,’ such as ‘associate,’ ‘realty’ or ‘group’ is prohibited.” The same paragraph requires either the full licensed names of the team members or the team name followed immediately by “at/of [full name of the broker/brokerage],” and it forbids using an unlicensed individual's name in the team name. Nothing in the rule asks for a county or a license number. Two related traps sit next to it: § 175.25(b)(1) allows only a real estate broker to place advertisements, and § 175.25(c)(4) prohibits the titles “sales associate”, “licensed sales agent” and the bare word “broker”.

Real Property Law § 442-h(4) requires every New York broker to institute standardized operating procedures. As the subdivision now reads, those procedures must:

• a.state whether identification, an exclusive agreement or pre-approval is required✓
• b.require identification, an exclusive agreement and mortgage pre-approval of buyers
• c.be filed with the Department of State before the broker's license is renewed
• d.be approved by the Department of State and reprinted in every listing agreement

The operative text lists three items the procedures “shall include but not be limited to” and frames each as a question rather than a command: “whether prospective clients shall show identification; whether an exclusive broker agreement is required; whether pre-approval for a mortgage loan is required.” A brokerage that requires none of the three complies by saying so. The broker syllabus's outline of this hour still lists identification, an exclusive broker agreement and mortgage pre-approval as standard requirements, which the statute as written no longer imposes. Paragraph (b) sets the mechanics: date stamp, notarize and post the procedures on any publicly available website and mobile application, make a copy available at office locations on request, repost and archive any alteration within thirty days, and answer to § 441-c for failing to follow them. Paragraph (c) requires an affirmation of compliance at renewal, not a filing.

Real Property Law § 443 requires a listing agent to present the agency disclosure form to a seller:

• a.when the first offer is presented, and to attach it to the contract of sale
• b.before entering into the listing agreement, with a signed acknowledgment✓
• c.at the closing table, and to file the signed copy with the Department of State
• d.at the first substantive contact with the seller, and to read it aloud in full

The timing rule is not one rule but three, and the listing agent's is the one candidates get wrong. Section 443(3)(a) requires the listing agent to provide the form “prior to entering into a listing agreement with the seller or landlord” and to obtain a signed acknowledgment. First substantive contact is the trigger in the other two situations: § 443(3)(b) for a seller's or landlord's agent dealing with a buyer or tenant, and the second half of § 443(3)(c) for a buyer's agent dealing with the seller or listing agent. A buyer's agent must give the form to the buyer before entering into the buyer agency agreement. Section 443(3)(d) requires the signed acknowledgment to be kept for not less than three years, § 443(3)(e) requires a written declaration under oath if the consumer refuses to sign, and § 443(2) limits the whole section to residential real property.

One New York firm represents both the buyer and the seller, and with informed written consent the supervising broker assigns one agent to each side. This arrangement is:

• a.single agency with a broker's agent
• b.subagency through a cooperating broker
• c.dual agency with designated sales agents✓
• d.advance consent to buyer agency

Real Property Law § 443(1)(j) defines a designated sales agent as a salesperson or associate broker working under a broker's supervision “who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction.” The statutory disclosure form explains the effect: each designated agent advocates for one side, while the broker above them remains a dual agent, and neither designated agent can offer undivided loyalty. Subagency is a cooperating firm acting for another firm's principal, which is not what happens inside one office. Single agency means representing one side only, so it cannot describe a firm standing on both. Advance consent is a box on the same form that permits the arrangement in advance; it is a consent, not the arrangement itself.

A New York broker may act as a dual agent in a residential transaction only when:

• a.the listing broker approves it in the firm's written policy manual
• b.the seller consents alone because the listing agreement came first
• c.the buyer signs a waiver of the statutory agency disclosure form
• d.both buyer and seller give informed consent in writing✓

The disclosure form printed in Real Property Law § 443(4) states the condition in one sentence: “A real estate broker may represent both the buyer and the seller if both the buyer and seller give their informed consent in writing.” The form goes on to say that in a dual agency the agent cannot provide the full range of fiduciary duties and that the parties are giving up their right to undivided loyalty, which is why only the parties can agree to it. A waiver of the disclosure document is not consent to shared representation, and it comes from one side rather than two. A firm cannot consent on a consumer's behalf through its own policy manual. And a listing agreement signed first does not let the seller speak for the buyer.

Which characteristic does Executive Law § 296(5) protect in the sale or rental of a housing accommodation but omit from its list for land and commercial space?

• a.Citizenship or immigration status of the applicant
• b.Gender identity or expression of the applicant
• c.Military status of the applicant or a spouse
• d.Lawful source of income, such as a housing voucher✓

Paragraph (a) of § 296(5) governs housing accommodations and its list ends “status as a victim of domestic violence, lawful source of income or familial status.” Paragraph (b), which governs land and commercial space, runs through the same classes but stops at “status as a victim of domestic violence, or familial status” — lawful source of income is not there. Paragraph (c), which binds real estate brokers and salespersons directly, does include it. Citizenship or immigration status, gender identity or expression and military status all appear in paragraphs (a), (b) and (c) alike, so none of them marks the difference. Note that the Department's own license law booklet still prints the pre-amendment version of § 296(5); the current statute is the one that governs.

Executive Law § 292(36) defines “lawful source of income” to include:

• a.only the wages that appear on a federal Form W-2 for the prior tax year
• b.an employer's letter confirming salary, but not any public benefit
• c.the income of a guarantor rather than the income of the applicant alone
• d.child support, alimony, foster care subsidies and section 8 vouchers✓

The definition reads that the term “shall include, but not be limited to, child support, alimony, foster care subsidies, income derived from social security, or any form of federal, state, or local public assistance or housing assistance including, but not limited to, section 8 vouchers, or any other form of housing assistance payment or credit whether or not such income or credit is paid or attributed directly to a landlord, and any other forms of lawful income.” Two clauses do the work. “Whether or not paid directly to a landlord” closes the argument that a voucher is the government's money rather than the tenant's. And “any other forms of lawful income” means wages count too, so the wrong options fail because of what they exclude, not what they include. The subdivision does preserve eligibility criteria that federal or state law requires for publicly assisted housing.

19 NYCRR § 175.17(a)(1) forbids a New York licensee from inducing an owner to sell or list by:

• a.offering to waive the commission if the owner lists within seven days
• b.predicting that a proposed zoning change will reduce the property's value
• c.quoting a listing price below the assessed value shown on the tax roll
• d.making representations about the entry of persons of a protected category✓

This is blockbusting, and the rule reaches it directly: no licensee “shall induce or attempt to induce an owner to sell or lease any residential property or to list same for sale or lease by making any representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, national origin, age, sex, sexual orientation, disability, gender identity, military status, familial status or any other protected category.” The prohibition turns on the subject of the representation, not on whether the statement is true or whether a sale follows. Pricing below assessed value, discounting a commission and forecasting the effect of a zoning change are ordinary market arguments; none of them is tied to a protected category. Subdivision (a)(5) defines residential property here as one-, two- or three-family houses, including a cooperative apartment or condominium.

19 NYCRR § 175.28 requires the Department's Human Rights Law disclosure notice to be given:

• a.before closing, in writing, and only for one-to-four family dwellings
• b.at first substantive contact and in writing, since oral notice fails✓
• c.on request only, in writing, and only where a listing agreement exists
• d.at the first showing, in writing or orally, whichever the consumer prefers

Paragraph (a) makes the broker responsible for ensuring that every associated licensee provides the notice “to a prospective purchaser, tenant, seller, or landlord upon first substantive contact.” Paragraph (b) allows email, text, an electronic messaging system, facsimile or hardcopy, permits a link so long as the message says what the link contains, and then states plainly that “oral disclosure does not satisfy the requirements imposed by this section.” Paragraph (c) is the reach that surprises people: the notice applies to all real property “regardless of the number of units,” and expressly includes condominiums, cooperative apartments, vacant land and commercial property. Paragraph (d) requires a signed acknowledgment where the notice is delivered on paper, a duplicate copy where it is sent electronically, retention for not less than three years, and a written declaration under oath if the consumer declines to sign.

Under 19 NYCRR § 175.29, the Department's fair housing notice must be:

• a.displayed in the listing agreement only and read aloud at each first showing
• b.displayed at the principal office only and mailed to each client once a year
• c.displayed at every office and branch office, and linked on every homepage✓
• d.displayed at open houses only and printed on the back of every business card

Paragraph (a) requires the broker to display and maintain the Department's notice “at every office and branch office operated by such broker.” Paragraph (b) says where: prominently in the window, visible from the adjacent sidewalk, if the office also posts listings in the window, and otherwise wherever the business license is posted under Real Property Law § 441-a(3). Paragraph (c) extends the duty online — every website maintained by a broker, associate broker, salesperson or team must display a conspicuous homepage link to the notice. Paragraph (d) adds open houses, and it also requires the separate § 175.28 notice to be available at all open houses and showings. Nothing in the rule turns on mailing, business cards or the listing agreement.

The $30 surcharge added to a New York broker license fee by Real Property Law § 441-b is deposited into:

• a.the anti-discrimination in housing fund, for statewide fair housing testing✓
• b.the business and licensing services account, for exam site administration
• c.the housing trust fund, for the construction of affordable rental housing
• d.the real estate education and research fund, for approved course development

Section 441-b(1) sets the broker fee at $155 “plus an additional thirty dollar surcharge,” and says the surcharge “shall be collected by the department of state and deposited into the anti-discrimination in housing fund established pursuant to section eighty-a of the state finance law to be used for statewide fair housing testing efforts.” A $10 surcharge does the same job on the salesperson fee. The business and licensing services account is a real destination, but § 441-b(1-A) sends the $15 examination fee there, not the surcharge. The other two funds are not where this money goes. Section 441-c(1)(a) points at the same anti-discrimination fund from the other direction, sending half of disciplinary fines to it.

For a violation of Executive Law article 15 committed as a licensee, Real Property Law § 441-c allows the Department of State to impose:

• a.a fine of up to $1,000, all of which goes to the general fund of the state
• b.a fine of up to $5,000, half of which goes to the complaining party's costs
• c.a fine of up to $2,000, half of which goes to the anti-discrimination fund✓
• d.a fine of up to $500, all of which goes to the licensee's continuing education

Section 441-c(1)(a) lets the Department revoke or suspend a license, or “in lieu thereof may impose a fine not exceeding two thousand dollars payable to the department of state, provided that fifty percent of all moneys received by the department of state for such fines shall be payable to the anti-discrimination in housing fund.” The same sentence lists what the Department may act on, and it now includes “a violation of article fifteen of the executive law committed in their capacity as a real estate broker or salesperson” alongside fraud, dishonest or misleading advertising, untrustworthiness and incompetency. Older material quoting a $1,000 ceiling predates the increase. Subdivision 4 adds a consequence beyond the fine: a licensee whose license is revoked is ineligible to be relicensed for one year.

A court finds that a New York licensee engaged in an unlawful discriminatory practice while performing licensed activity. Under 19 NYCRR § 175.17(b), that finding is:

• a.relevant only if the Division of Human Rights also files its own complaint
• b.outside the Department's authority, since article 15 is enforced elsewhere
• c.presumptive evidence of untrustworthiness, exposing the licensee to revocation✓
• d.conclusive proof of incompetency, requiring the Department to suspend the license

The rule says a finding “by any federal, state or local agency or court of competent jurisdiction that a real estate broker or salesperson has engaged in unlawful discriminatory practice in the performance of licensed real estate activities shall be presumptive evidence of untrustworthiness and will subject such licensee to discipline, including a proceeding for revocation.” Presumptive is not conclusive: it shifts the weight of the evidence rather than deciding the case, and the Department retains its ordinary discretion over the sanction. The finding stands on its own, so a separate Division of Human Rights complaint is not a precondition. And the sentence that follows makes clear the Department is not displaced: “Nothing herein shall limit or restrict the Department from otherwise exercising its authority pursuant to section 441-c of the Real Property Law.”

Real Property Law § 441(3)(a) requires 22.5 hours of continuing education each renewal. The hours devoted to fair housing and discrimination must be at least:

• a.six hours, alongside four hours of implicit bias and four of cultural competency
• b.one hour, alongside one hour of implicit bias and one of cultural competency
• c.two hours, alongside three hours of implicit bias and three of cultural competency
• d.three hours, alongside two hours of implicit bias and two of cultural competency✓

The subdivision requires at least 22.5 hours in the two years before renewal and then itemizes a floor for several subjects: at least two hours of cultural competency training, at least three hours of instruction pertaining to fair housing and discrimination, at least two hours on implicit bias awareness and understanding, at least two and one-half hours on ethical business practices, at least one hour on recent legal matters, and at least one hour on the law of agency — two hours of agency for a salesperson's initial term. The statute defines implicit bias in the same place as “the attitudes or stereotypes that affect an individual's understanding, actions and decisions in an unconscious manner.” Paragraph (e) fixes the content of the fair housing hours, requiring courses on the legacy of segregation and unequal access to opportunity in housing, unequal access to amenities and resources, federal, state and local fair housing laws, and anti-bias training.

Real Property Law § 440(1) brings negotiating a loan secured by a mortgage within the definition of real estate broker, except when the loan is:

• a.a commercial mortgage loan made by a state-chartered bank
• b.a purchase money mortgage taken back by the property seller
• c.a construction loan secured by unimproved real property
• d.a residential mortgage loan as defined in Banking Law § 590✓

The definition in § 440(1) covers a person who “negotiates or offers or attempts to negotiate, a loan secured or to be secured by a mortgage, other than a residential mortgage loan, as defined in section five hundred ninety of the banking law, or other incumbrance upon or transfer of real estate.” The carve-out matters because residential mortgage origination is its own licensed activity under Banking Law article 12-D, supervised by the Department of Financial Services, and a real estate broker license does not authorize it. The three wrong options are all loans a real estate broker's license can reach, which is the point: the exception is drawn around residential mortgage lending, not around commercial, seller-financed or construction lending.

Under Real Property Law § 291, an unrecorded New York conveyance is void against a later purchaser who:

• a.buys in good faith for valuable consideration and records first✓
• b.records first, whether or not any value was actually paid
• c.buys at any price and records within thirty days of the closing
• d.buys with notice of the earlier deed but records the later one first

Section 291 provides that an unrecorded conveyance “is void as against any person who subsequently purchases … in good faith and for a valuable consideration, from the same vendor … and whose conveyance, contract or assignment is first duly recorded.” Three conditions travel together — good faith, value, and first recording — which is what makes New York a race-notice state rather than a pure race or pure notice state. A buyer who knew of the earlier deed is not in good faith, so winning the race to the clerk's office does not help. A buyer who paid nothing fails the valuable consideration test for the same reason. And a fixed thirty-day window appears nowhere in the section; what matters is who records first.

Lien Law § 10 sets the deadline to file a mechanic's lien, measured from the last item of work, at:

• a.eight months generally, but four months for a single family dwelling✓
• b.one year generally, but ninety days for a single family dwelling
• c.four months generally, but eight months for a single family dwelling
• d.six months generally, but three months for a single family dwelling

Section 10(1) allows a notice of lien to be filed during the progress of the work or “within eight months after the completion of the contract, or the final performance of the work, or the final furnishing of the materials,” and then shortens that to four months “where the improvement is related to real property improved or to be improved with a single family dwelling.” The pairing is easy to invert, and inverting it is the most common error. Two refinements sit in the same subdivision: a lien for retainage may be filed within ninety days after the retainage was due to be released, and a lien by a real estate broker is available only on a lease, only after the brokerage services are performed and the lease is executed by both lessor and lessee, and only with a copy of the written compensation agreement annexed.

For a non-rent-stabilized New York apartment, General Obligations Law § 7-108 caps the security deposit at:

• a.three months' rent, with narrow exceptions for month-to-month tenancies
• b.one month's rent, with narrow exceptions for seasonal use dwellings✓
• c.one and a half months' rent, with an exception for new construction
• d.two months' rent, with narrow exceptions for furnished apartments

Subdivision 1-a(a) states that “no deposit or advance shall exceed the amount of one month's rent,” and it names only two exceptions in the same sentence: a seasonal use dwelling unit under subdivisions four and five, and an owner-occupied cooperative apartment under subdivision six. The whole of subdivision 1-a is itself switched off for units subject to the city rent and rehabilitation law or the emergency housing rent control law, for licensed continuing care, assisted living and adult care facilities, and for certain senior and not-for-profit retirement communities. Furnishing, tenancy length and the age of the building change nothing. A broker who quotes “first month, last month and a month's security” on a covered unit is quoting an unlawful demand.

General Obligations Law § 7-108 requires a New York landlord to return the deposit and an itemized statement within:

• a.ninety days of vacating, or file an explanation with the county clerk
• b.thirty days of vacating, or forfeit the interest earned on the deposit
• c.fourteen days of vacating, or forfeit the right to retain any of it✓
• d.sixty days of vacating, or pay the tenant twice the amount withheld

Subdivision 1-a(e) says that “within fourteen days after the tenant has vacated the premises, the landlord shall provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and shall return any remaining portion of the deposit,” and that a landlord who misses the deadline “shall forfeit any right to retain any portion of the deposit.” The forfeiture is total, not a penalty measured by the interest or a multiple of the sum withheld. Subdivision 1-a(f) then puts the burden of proving the reasonableness of any retained amount on the landlord, and 1-a(g) allows punitive damages of up to twice the deposit for a willful violation. Paragraphs (c) and (d) add the move-in and move-out inspection rights that make the itemized statement checkable.