New York Real Estate Broker Exam — All Questions

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.