Pennsylvania 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.

Five of the members the Governor appoints to the State Real Estate Commission must be licensed Pennsylvania brokers who, at the time of appointment, have been engaged in the real estate business in this Commonwealth for at least:

• a.Ten years✓
• b.Five years
• c.Three years
• d.Fifteen years

Section 202(a) of RELRA requires that the five broker seats be filled by persons each of whom "shall have been engaged in the real estate business in this Commonwealth for a period of not less than ten years immediately prior to his appointment." The same subsection builds the rest of the board around them: the Commissioner of Professional and Occupational Affairs, the Director of the Bureau of Consumer Protection or a designee, three public members, and one member who has been licensed as a broker or cemetery broker for at least five years and has sold cemetery lots for at least ten. Three years is the salesperson experience a broker candidate needs under section 511(4) before sitting for the examination, not the standard for a Commission seat. Five years is the cemetery member's licensure minimum and also the term of office under section 202(b), and fifteen years appears nowhere in the act.

A Pennsylvania salesperson is found to have violated RELRA. The employing broker's own license may be suspended or revoked for that violation only if the hearing establishes that the broker:

• a.Had received a fee out of the same transaction
• b.Had signed the salesperson's license application
• c.Had actual knowledge of the violation✓
• d.Had failed to attend the Commission's hearing

Section 702(a) is explicit: no violation by a salesperson, associate broker or other employee "shall be grounds for the revocation or suspension of the license of the employer" unless it appears at the hearing "that such employer had actual knowledge of such violation." Section 702(c) supplies the one shortcut the Commission gets, providing that a course of dealing shown to have been followed by the employee is prima facie evidence of the employer's knowledge. Certifying on the application that the broker will actively supervise and train the applicant, which section 522(b) requires, creates the supervisory duty but is not itself knowledge of a later violation. Sharing in the commission does not impute knowledge either, and non-attendance at a hearing is a procedural matter under section 701 rather than a substitute for the actual-knowledge finding.

The Real Estate Recovery Fund's liability on judgments against Pennsylvania licensees is capped at:

• a.$20,000 for any one claim and $50,000 per licensee
• b.$20,000 for any one claim and $100,000 per licensee✓
• c.$50,000 for any one claim and $250,000 per licensee
• d.$50,000 for any one claim and $100,000 per licensee

Section 803(d) states that "the liability of that portion of the fund allocated for the purpose of this act shall not exceed $20,000 for any one claim and shall not exceed $100,000 per licensee." When valid claims against a single licensee exceed the $100,000 ceiling, the same subsection prorates the money among the claimants in the ratio their claims bear to the total, so a large fraud does not simply pay the first person through the door in full. The other figures are not in the statute; Pennsylvania has left these two numbers alone while other states raised theirs. Note also that section 803(b) lets a claimant reach the fund only after a final judgment for fraud, misrepresentation or deceit, after exhausting collection remedies, and on an application filed no more than one year after the proceedings end.

When the Commission pays a claim out of the Real Estate Recovery Fund on a licensee's behalf, that licensee's license:

• a.Is automatically revoked and may not be reinstated for five years
• b.Is unaffected, because the fund exists to absorb the loss
• c.Is placed on probation for the balance of the biennial period
• d.Is automatically suspended until the amount is repaid with 10% interest✓

Section 803(f) provides that the license "shall automatically suspend upon the effective date of the payment" and that no licensee "shall be granted reinstatement until he has repaid in full plus interest at the rate of 10% a year, the amount paid from the Real Estate Recovery Fund." The suspension is therefore tied to repayment rather than to a fixed period, and it is automatic rather than the outcome of a separate disciplinary hearing. Revocation with a five-year bar is a different mechanism, created by section 501(c) and section 35.251 for licensees whose licenses have been revoked. Probation is not the statutory consequence, and the fund is expressly not a licensee's insurance policy: section 803(f)(3) lets the Commission take judgment against the licensee for whatever it paid.

A person puts a Pennsylvania house under an agreement of sale and, without ever taking title, assigns that contract to an investor for a fee. Under RELRA as amended by Act 52 of 2024, that person is acting as:

• a.A broker, whether the person acts for another or for himself✓
• b.An attorney-in-fact, because the assignment is a private contract
• c.An owner, because the equitable interest belongs to the person
• d.A transaction licensee, because no party is being represented

Act 52 of 2024 added a second paragraph to the definition of "broker" in section 201 covering "any person who, whether for the person or for another, engages or attempts to engage in a wholesale transaction," and defined a wholesale transaction as promoting the sale, exchange or purchase of an equitable interest in residential property with intent to assign it for consideration "without having taken title as the owner of record." The words "whether for the person or for another" are what close the old gap, because wholesalers had argued they were acting only for themselves. The owner exclusion is no longer available either: the same act added to section 304(1) the sentence "This exclusion shall not apply to a wholesale transaction." An attorney-in-fact is excluded only when acting under an executed and recorded power of attorney under section 304(4), and a transaction licensee is a licensed broker or salesperson under section 201, so that status presupposes the license rather than excusing it.

Pennsylvania issues several licenses beyond broker and salesperson. A cemetery broker's license authorizes its holder to act as a broker:

• a.Exclusively in cemetery lots, plots and mausoleum spaces or openings✓
• b.Exclusively in residential property of four or fewer dwelling units
• c.In any real estate, but only under another broker's active supervision
• d.In any real estate, but only for a builder-owner who employs the holder

Section 201 defines a cemetery broker as a person acting in the capacity of a broker "exclusively within the limited field or branch of business which applies to cemetery lots, plots and mausoleum spaces or openings," and Subchapter D of Chapter 5 gives that license its own qualifications, including three years as a salesperson or cemetery salesperson under section 531(2). The residential limit belongs to a different definition: "residential property," added by Act 52 of 2024, means property of not less than one and not more than four dwelling units, and it bounds wholesale transactions rather than a license class. Selling under a broker's active supervision describes the time-share and campground membership salespersons of Subchapters I and J, whose section 201 definitions carry those words. Acting only for an employing builder-owner describes the builder-owner salesperson of Subchapter F, and the rental listing referral agent of Subchapter G is different again, being the one category section 561 does not require to affiliate with a broker.

A Pennsylvania salesperson has held an active license for three years. For purposes of eligibility to sit for the broker examination, that fact alone:

• a.Is enough, because the regulation sets a bright-line time test
• b.Is enough, and it also excuses two of the sixteen credit hours
• c.Is not enough, because the experience must satisfy the Commission✓
• d.Is not enough, because a bachelor's degree is also required

Section 35.271(a)(3) requires the candidate to have "worked at least 3 years as a licensed salesperson, with experience qualifications that the Commission considers adequate for practice as a broker," and section 35.271(a)(5)(ii) makes the candidate file a detailed resume of activities performed plus the employing broker's sworn confirmation. Commonwealth Court read the rule exactly that way in Bhala v. State Real Estate Commission, holding that possession of a salesperson's license for three or more years does not by itself entitle a person to sit for the broker examination. The education requirement is separate and is not reduced by experience: section 511(3) requires 240 hours, and section 35.271(b)(2) allocates 16 credits including 2 in office management and 2 in law. A degree is one route to satisfying that education requirement under section 35.271(b)(1), not a general prerequisite, since section 511(2) asks only for high school graduation or its equivalent.

A Pennsylvania standard broker's license has been inactive for more than five years. Before the license can be reissued, the licensee must:

• a.Retake and pass the licensing examination✓
• b.File a hardship waiver with the Commission
• c.Obtain a certification from another state
• d.Complete 14 hours of continuing education

Section 501(b) provides that any person who remains inactive for five years without renewing "shall, prior to having a license reissued to him, submit to and pass the examination pertinent to the license for which the person is reapplying," and section 404.1(e) requires the Commission to warn licensees of exactly this in the renewal notice. Fourteen hours of continuing education is the right answer for a licensee who acts within the five years: section 35.382(b) makes that the condition for reactivating and renewing a noncurrent standard license, and section 35.382(a) makes the same 14 hours the condition for an ordinary renewal by the May 31 deadline. A hardship waiver under section 35.383 excuses continuing education for illness, emergency or hardship; it does not revive a lapsed license. A certification from another state's licensing authority belongs to the reciprocal-license route under section 35.255.

A Pennsylvania associate broker is moving from one employing broker to another. RELRA requires written notice to the Commission no later than:

• a.Ten days after the intended date of the change✓
• b.Ten days before the intended date of the change
• c.Thirty days after the intended date of the change
• d.Thirty days before the intended date of the change

Section 603(a) requires the licensee to "notify the commission in writing no later than ten days after the intended date of change, pay the required fee, and return his current license," and the Commission then issues a new license once the new broker acknowledges the change. The notice is therefore a follow-up rather than an advance filing, and the same subsection lets the licensee keep working in the interim by holding a copy of that notification as a temporary license. The thirty-day figure in this section runs the other way: it is the point at which the licensee has a duty to chase the Commission if no new license or other communication has arrived. Thirty days is also the reporting window in section 35.290 for a conviction or another state's discipline, which is a different obligation entirely.

An unlicensed person is employed by the owner of an apartment building to manage and maintain it. Relying on the exclusion in section 304, that employee may lawfully:

• a.Negotiate the terms and conditions of occupancy with a new tenant
• b.Show apartments and give out the rental amounts and building rules✓
• c.Sign a lease on the owner's behalf under the owner's standing authority
• d.Hold a tenant's security deposit in an account in the employee's name

Section 304(10) excludes a person employed by an owner to manage or maintain multifamily residential property only where that person is not authorized to enter into leases for the owner, to negotiate terms or conditions of occupancy with current or prospective tenants, or to hold money belonging to tenants other than on the owner's behalf. Within those limits the statute says in terms that the employee "may show apartments and provide information on rental amounts, building rules and regulations and leasing determinations," and section 35.202(11) repeats the boundary. Negotiating occupancy terms and executing leases are the two activities the exclusion expressly withholds, and doing either turns the work into the management of real estate for another, which the section 201 definition of broker covers. Holding tenants' money in the employee's own name fails the third limb and would raise the escrow rules besides.

RELRA lists duties a Pennsylvania licensee owes to every consumer and states that they may not be waived. The one exception the statute itself carves out is:

• a.Dealing honestly and in good faith with every consumer served
• b.Disclosing a conflict of interest to the consumer in good time
• c.Accounting in a timely manner for money received from a consumer
• d.Presenting written offers while the property is under contract✓

Section 606.1(a)(3) requires the licensee to present all written offers, notices and communications in a timely manner, "except that the duty of a licensee under this paragraph to present written offers may be waived by a seller of a property that is subject to an existing contract for sale" where the waiver is in writing and in the manner the Commission prescribes by regulation. Section 35.292(a)(3) carries the same carve-out into the rules. Every other duty in section 606.1(a) is introduced by the words "which may not be waived," so honesty and good faith under paragraph (2), accounting for money under paragraph (5), and timely conflict disclosure under paragraph (7) stay in place no matter what the parties agree. The distinction matters in practice because the waiver is the seller's to give, is limited to a property already under contract, and must be written.

An agency relationship between a Pennsylvania licensee and a principal has ended. The licensee may reveal the former principal's confidential information when:

• a.A cooperating broker asks for it in the course of a later transaction
• b.The transaction has been closed for more than six months
• c.The licensee believes the information has become public anyway
• d.A subpoena or court order requires the information to be disclosed✓

Section 606.1(g) forbids a licensee to reveal or use a principal's confidential information "during or following the termination of an agency relationship" and then lists five closed exceptions, of which one is that "the information is required to be disclosed under subpoena or court order." Section 35.311(d) states the rule and the same five exceptions in the regulations. The other four exceptions are the principal's consent, disclosure to a licensee or third party acting solely on the principal's behalf, disclosure necessary to prevent the principal from committing a crime, and use in the licensee's own defense against an accusation of wrongdoing. A cooperating broker in a later deal is not acting on the former principal's behalf, the passage of time is not one of the exceptions, and the licensee's own belief that a fact has become public is not the test the statute applies.

A Pennsylvania seller's agent is told by the seller, in confidence, that the basement floods every spring. The agent must:

• a.Withhold it, because confidentiality binds the agent to the seller's instruction
• b.Reveal it, because the confidentiality duty does not reach material defects✓
• c.Withhold it unless a prospective buyer asks a direct question about flooding
• d.Reveal it only once a buyer and the seller have signed an agreement of sale

Section 35.312(a)(2) states the seller's agent's duty of confidentiality and immediately qualifies it: "except that a licensee has a duty to reveal known material defects about the property." The Consumer Notice in section 35.336 makes the same point to consumers in plain words for seller agents, buyer agents, dual agents and transaction licensees alike, and section 35.284a(c) requires a licensee to disclose to the buyer in writing all material defects not otherwise disclosed of which the licensee has actual knowledge. Loyalty under section 35.312(a)(1) does not override that, because the duty runs to the buyer rather than being owed to the seller. Waiting for a direct question would be the caveat emptor rule Pennsylvania abandoned when it enacted the Real Estate Seller Disclosure Law, and disclosure after signing comes too late, since 68 Pa.C.S. section 7303 requires the disclosure statement before the agreement is signed.

A Pennsylvania licensee's first substantive discussion of a buyer's real estate needs happens over the telephone, so the licensee gives the required oral disclosure. The written Consumer Notice must then be delivered no later than:

• a.The later of the first in-person meeting or the first showing
• b.The signing of a written agreement between the broker and consumer
• c.The earlier of the first in-person meeting or the first showing✓
• d.The presentation of the consumer's first written offer to purchase

Section 608(d) sets the deadline at the earlier of "the first meeting that the licensee has in person with the consumer after the initial interview" or "the time a property is first shown to the consumer by the licensee or any person working with the licensee," and section 35.284(a)(2) repeats it. The initial interview is defined in section 608(a) and section 35.201 as the first contact at which a substantive discussion about real estate needs occurs, so a phone call counts and triggers the oral script in section 35.339, which warns the consumer that nothing said is confidential yet. Choosing the later of the two events would let a licensee show property before the notice arrives, which is precisely what the rule prevents. Waiting for a written agreement or an offer is later still, and section 35.286(a)(1) then requires the signed or refused acknowledgment to be kept for six months where no transaction follows.

Before acting as a dual agent in Pennsylvania, a licensee must have written consent from both parties following the disclosures given at the initial interview. That consent must also include:

• a.A waiver of the duty of confidentiality
• b.A statement of the terms of compensation✓
• c.An acknowledgment of the recovery fund
• d.A release of the broker from all liability

Section 606.4(a) allows dual agency "only with the written consent of both parties to the transaction following the disclosures given at the initial interview required by section 608," and adds the requirement in one sentence: "The consent must include a statement of the terms of compensation." Section 35.314(a) states the written-consent rule, and section 604(a)(7) makes acting for more than one party without the written knowledge and consent of all of them a prohibited act. Confidentiality is not waived by consenting to dual agency; section 35.314(b)(3) keeps the dual agent's confidentiality duty in place, subject to the standing obligation to disclose known material defects. Recovery Fund language belongs in written broker agreements and sales contracts under sections 608.1(6) and 608.2(2), and a blanket liability release is not a component of dual-agency consent at all.

Under RELRA, a Pennsylvania subagent is:

• a.A broker outside the listing broker's employ who acts for the seller✓
• b.A licensee inside the listing broker's employ who acts for the seller
• c.A licensee inside the listing broker's employ who acts for the buyer
• d.A broker outside the listing broker's employ who acts for the buyer

The section 201 definition is precise on both points: a subagent is "a broker, not in the employ of the listing broker, who is engaged to act for or cooperate with the listing broker in selling property as an agent of the seller," and "a subagent is deemed to have an agency relationship with the seller." Section 35.312(c) lets a seller's agent compensate other brokers as subagents if the seller agrees in writing and gives subagents the same duties and obligations to the seller as the seller's agent has. A cooperating broker who acts for the buyer is a buyer agent under the section 201 definition, and section 35.313(c) confirms that such a broker represents the buyer even when the seller's side pays. A licensee employed by the listing broker is already the seller's agent by virtue of section 35.312(e) unless designated otherwise, so there is nothing sub about that relationship. Pennsylvania still defines and uses subagency, unlike states that have repealed or deleted it.

A Pennsylvania transaction licensee owes limited confidentiality. Under that duty the licensee may not disclose that:

• a.The property has a known material defect in the roof
• b.The seller would take a price below the listed price✓
• c.The seller has received a competing offer this week
• d.The listing broker is paying the licensee's fee here

Section 606.6 and section 35.316(2) confine limited confidentiality to three specific facts: that the seller will accept a price less than the asking or listed price, that the buyer will pay more than the price in a written offer, and that either party will agree to financing terms other than those offered. A known material defect is on the other side of the line, because the closing words of section 606.6 and the Consumer Notice in section 35.336 both say that transaction licensees, like licensees in agency relationships, must disclose known material defects about the property. The existence of a competing offer is not among the three protected facts. Who is paying the licensee is a matter to be disclosed rather than concealed, since section 606.6(1) requires the transaction licensee to tell the consumer that the licensee is not acting as an agent or advocate and should not be given confidential information.

A Pennsylvania broker designates one licensee to act for the seller and another to act for the buyer in the same transaction. In that transaction the broker:

• a.Is a transaction licensee and owes no agency duty to either party
• b.Is a dual agent and must direct and supervise both designated agents✓
• c.Is the seller's agent, because the listing reached the firm first
• d.Is free of agency duties once the two designations are made

Section 606.5(a)(1) states that a broker who represents both the seller/landlord and the buyer/tenant in the same transaction is a dual agent, and section 606.5(a)(3) adds that the broker "has the responsibility to direct and supervise the business activities of designated agents and thereby owes duties to both the seller/landlord and the buyer/tenant as a dual agent." Section 35.315(f) repeats the point and pairs it with a duty to take reasonable care to protect the confidential information each principal gave to that principal's own designated agent. Designation therefore narrows the agency of the individual licensees, not of the broker: section 35.315(d) provides that licensees who are not designated have no agency relationship with either party. Section 606.5(b)(3) also requires each designated agent to tell the principal, before writing or presenting an offer, that the other party is represented within the same firm and that the broker is a dual agent.

A Pennsylvania licensee provides services to a consumer before any written agreement has been signed. The licensee:

• a.May do so and may recover a reasonable fee for the work performed
• b.Has violated RELRA merely by working before an agreement is signed
• c.May recover a fee if the consumer later acknowledges the work orally
• d.May do so, but cannot recover a fee without a signed agreement✓

Section 606.1(b)(1) bars a licensee from taking a fee paid by or on behalf of a consumer unless the nature of the service and the fee are set out in a written agreement signed by the consumer, then adds: "This paragraph shall not prohibit a licensee from performing services before such an agreement is signed, but the licensee is not entitled to recover a fee, commission or other valuable consideration in the absence of such a signed agreement." Section 35.281(c) states the rule in the same two halves, which is why doing the work is not itself the violation. A quantum meruit recovery is exactly what the sentence forecloses, and an oral acknowledgment afterwards does not supply the signature the statute demands. The narrow exceptions in section 606.1(b)(2) and section 35.281(b)(1) let an open listing or a nonexclusive buyer agency agreement be oral, but only if the consumer receives a written memorandum of the terms.

A Pennsylvania salesperson earns compensation on a completed sale. RELRA permits that compensation to be accepted from:

• a.The seller directly, where the listing agreement authorizes it
• b.The cooperating broker who produced the successful buyer
• c.The employing broker with whom the salesperson is affiliated✓
• d.The settlement agent, out of the proceeds held at closing

Section 604(a)(12) makes it a prohibited act for a salesperson or associate broker to accept "a commission or any valuable consideration ... from any person, except the licensed real estate broker with whom he is affiliated," and section 604(a)(12.1) closes the loop from the paying side by barring a broker from paying anyone other than the broker's own licensed employees or another real estate broker. That is why cooperative compensation moves broker to broker and reaches the salesperson only through the employing broker. A seller cannot pay the salesperson directly however the listing reads, and a settlement agent disbursing to the salesperson would be paying a person the broker's own funds have to reach first. The single carve-out is the qualified association added by Act 14 of 2009: section 604(c) permits a broker to pay a qualified association, and a salesperson to be paid by one in which the salesperson holds an interest, but section 201 requires that entity to be owned solely by licensees all affiliated with the same broker.

An advertisement placed by a Pennsylvania salesperson for a listed property must contain:

• a.The salesperson's license number and the Commission's telephone
• b.The business name and license number of the employing broker
• c.The business name and telephone number of the employing broker✓
• d.The salesperson's own telephone number and business mailing address

Section 35.305(c) requires that an advertisement by an associate broker, salesperson, cemetery associate broker or cemetery salesperson "shall contain the business name and telephone number of the employing broker," and that the names and telephone numbers be of equal size. Commonwealth Court has enforced the rule against advertisements that carried the broker's name with a number that in fact rang through to the individual licensee, in Campo v. State Real Estate Commission and D'Alonzo v. State Real Estate Commission, upholding it as a way of giving the public access to the licensee's supervisor. No license number is required in an advertisement, whether the broker's or the salesperson's, and the Commission's own telephone number belongs in written agreements and sales contracts as part of the Recovery Fund notice under sections 608.1(6) and 35.331(a)(1). Section 35.305(a) adds the underlying constraint that the firm may advertise only under the business name designated on its license.

A licensed Pennsylvania broker advertises her own home for sale by owner, without listing it. Section 35.304 requires that the advertisement:

• a.Disclose that the seller is a real estate licensee✓
• b.Appear only through a licensed real estate company
• c.Carry the Commission's prior written approval to run
• d.Disclose the name of the brokerage that employs her

Section 35.304 provides that a licensee who sells or leases his own real estate "shall disclose that he is a real estate licensee in advertisements for the property," and exempts only the case where the property is listed with a real estate company, because the firm's own advertising identification then does the work. Section 35.288(b) is the companion obligation off the page: the licensee must disclose licensed status to a prospective buyer or lessee before that person enters into an agreement of sale or lease. Naming an employing brokerage is the requirement of section 35.305(c) for advertisements of listed property, which is a different situation. Nothing in the act or Chapter 35 routes a licensee's own for-sale-by-owner advertisement through a brokerage or requires the Commission to approve advertising copy in advance.

A Pennsylvania broker advertises the brokerage's "sales volume." Under Chapter 35 that figure may include:

• a.Only the listings the brokerage took during the year advertised
• b.All listings the brokerage held at any point during that same year
• c.All properties the brokerage currently has under agreement of sale
• d.Only closed transactions, as the Commission's rule defines them✓

Section 35.307(a) provides that an advertisement about "sales volume" or "production" shall refer only to closed transactions, and defines a closed transaction as "either a listing sold or a sale made after a fully executed deed is delivered." Pending agreements have not closed on that definition, so counting them inflates the number in exactly the way the rule forbids. Listings taken and listings held are inventory rather than volume, and the rule speaks to what was sold. Two neighboring provisions do similar work: section 35.307(b) requires an advertisement about production or market position to identify the municipality that the market comprises, and section 35.307(c) limits a claim about the number of offices to those for which the Commission has issued branch office licenses.

Which of the following does RELRA make a ground for discipline that applies specifically to a broker licensee?

• a.Failing to attend the Commission's annual public meetings
• b.Failing to hold membership in a local board of Realtors
• c.Failing to exercise adequate supervision over affiliated licensees✓
• d.Failing to carry errors and omissions coverage on the firm

Section 604(a)(16) reaches, "in the case of a broker licensee, failing to exercise adequate supervision over the activities of his licensed salespersons or associate brokers within the scope of this act," and section 604(a)(27) extends the same duty to campground membership and time-share salespersons the broker supervises. Section 522(b) is where the duty starts, because the broker's sworn statement that he will actively supervise and train the applicant is part of the salesperson's application. The public meetings in section 202(e), one each year in Pittsburgh, Philadelphia and Harrisburg, exist to gather comment from the public and impose no attendance duty on licensees; it is a Commission member who forfeits a seat for missing three consecutive meetings under section 202(c). Trade association membership is voluntary, and section 604(a)(4) in fact makes it a prohibited act to claim membership in an association the licensee does not belong to. Neither RELRA nor Chapter 35 imposes an errors and omissions insurance requirement.

A Pennsylvania salesperson assists the employing broker with the firm's property management work. The salesperson may not:

• a.Collect rent from tenants and pay it over to the employing broker
• b.Show available units to prospective tenants while a unit is vacant
• c.Negotiate lease terms independently or execute a lease for the lessor✓
• d.Prepare routine correspondence and file records for the broker

Section 35.287 permits a salesperson to assist in property management where the work is supervised and controlled by the employing broker, then draws the line in one sentence: "The salesperson may not independently negotiate the terms of a lease nor execute a lease on behalf of the lessor." Showing units and preparing records fall within supervised assistance, and the section 201 definition of salesperson expressly includes leasing or renting real estate and collecting rent when done for the employing broker. Money the salesperson receives does not stop there, because section 608.5(c) requires every associate broker and salesperson to pay a deposit or other escrow over to the employing broker promptly on receipt, and section 608.5(k) forbids a salesperson to hold escrow at all. Rents are handled differently again: sections 608.5(h) and (i) and section 35.321(b) exempt rents from escrow but require the broker to keep them in a rental management account separate from the escrow and general business accounts.

A Pennsylvania exclusive listing agreement is defective under Chapter 35 if it:

• a.Runs for a stated period of one year from the date the parties sign it
• b.Contains a clause renewing the listing automatically at the end of the term✓
• c.States in bold that the broker earns a fee on a sale made by anyone
• d.States the commission or other compensation expected on the sale price

Section 35.332(c) lists what an exclusive listing agreement may not contain, and an automatic renewal clause is the second item on that list, alongside a listing period exceeding one year, a requirement of cancellation notice to end the agreement at the term's close, authority for the broker to execute an agreement of sale or lease for the owner, an option for the broker to purchase the listed property, and authority to confess judgment against the owner. Section 604(a)(10) makes the same point from the statute's side by making it a prohibited act to fail to specify a definite termination date not subject to prior notice in any listing contract. A one-year term is therefore lawful, being the maximum rather than a violation. The sale price, the commission and the duration are all required by section 35.332(b), and the bold-face statement that the broker earns a commission on a sale by whomever made, including the owner, is required by section 35.332(b)(4) for an exclusive right-to-sell.

How long must a Pennsylvania broker retain the records of a real estate transaction?

• a.Six months following consummation of the transaction
• b.Two years following consummation of the transaction
• c.Three years following consummation of the transaction✓
• d.Seven years following consummation of the transaction

Section 604(a)(6) makes it a prohibited act to fail "to preserve for three years following its consummation records relating to any real estate transaction," and section 35.286(a) restates the three-year rule for brokers and cemetery brokers. Six months is the shorter period section 35.286(a) assigns to four specific acknowledgments rather than to transaction files: the Consumer Notice acknowledgment where no transaction follows, the time-share and lease consumer notices, and the written disclosure statement that establishes a subagent or transaction licensee relationship under section 35.281(b)(3). Neither two nor seven years appears in the act or the chapter. Section 35.286(b) adds that these records, and the corporate or partnership records of an entity holding a broker's license, must be produced on written request or during an office inspection under section 35.246.

A Pennsylvania salesperson intends to buy, through a relative, a property listed with her own office. Before going forward she must:

• a.Resign from the brokerage and wait for the listing to expire
• b.Disclose her intention and true position to the owner in writing✓
• c.Obtain the Commission's written approval for the purchase
• d.Refer the listing to a cooperating broker outside the firm

Section 604(a)(13) makes it a prohibited act to fail "to disclose to an owner in writing his intention or true position if he directly or indirectly through a third party, purchased for himself or acquires or intends to acquire any interest in or any option to purchase property which has been listed with his office to sell or lease." The words "indirectly through a third party" are what capture a purchase in a relative's name. Section 35.283(a) states the same duty in the rules, barring a licensee from participating in a transaction involving property in which the licensee has an ownership interest without first disclosing that interest in writing to all parties, and section 35.283(f) imposes a continuing duty to disclose conflicts as they arise. Resigning, seeking Commission approval or handing the listing to another firm are not what the statute asks for; written disclosure to the owner is.

The Commission's rules treat a licensee's attempt to bring about "panic selling" in a neighborhood in order to profit from it as:

• a.Acceptable where the licensee's own market data support the claim
• b.A summary offense to be prosecuted by the district attorney
• c.A matter reserved to the Pennsylvania Human Relations Commission
• d.Bad faith within the meaning of RELRA's prohibited acts section✓

Section 35.303(a) says the Commission "will regard an attempt by a licensee to bring about panic selling in order to profit from it as bad faith under section 604(a)(20) of the act," and defines panic selling as frequent efforts to sell residential real estate in a neighborhood because of a fear of declining values "when the fear is not based on facts relating to the intrinsic value of the real estate itself." Section 35.303(b) adds that proof of systematic solicitation of sales listings may be sufficient, though not conclusive, evidence of the attempt. Summary and criminal penalties under section 303 attach to practicing without a license, not to this conduct. A discrimination complaint may well go to the Human Relations Commission under section 604(a)(22), but section 35.303 gives the State Real Estate Commission its own independent ground, and the definition's own words exclude any claim resting on the property's intrinsic value.

RELRA requires a Pennsylvania licensee to furnish a copy of any listing, sale or lease contract to every person who signed it:

• a.Within ten days after settlement occurs
• b.Only when a signatory asks for a copy
• c.Within thirty days of the contract date
• d.At the time the contract is executed✓

Section 604(a)(9) makes it a prohibited act to fail "to voluntarily furnish a copy of any listing, sale, lease, or other contract relevant to a real estate transaction to all signatories thereof at the time of execution." Two words carry the rule: "voluntarily," which removes any need for the consumer to ask, and "at the time of execution," which removes any grace period. Waiting for settlement or for a thirty-day window would leave signatories without the terms they had just agreed to, which is the harm the paragraph addresses. Section 609(b) reinforces the same idea in the time-share and campground context, requiring that copies of all documents placing an obligation on a purchaser be given to the purchaser upon execution.

Under Pennsylvania's Real Estate Seller Disclosure Law, the signed and dated property disclosure statement must be delivered to the buyer:

• a.Within ten days after the agreement of transfer is signed
• b.Before the buyer's mortgage commitment has been issued
• c.At the time of final settlement on the residential property
• d.Before the seller and buyer sign an agreement of transfer✓

68 Pa.C.S. section 7303 requires a seller to disclose known material defects by completing a disclosure statement satisfying section 7304, and directs that "a signed and dated copy of the property disclosure statement shall be delivered to the buyer ... prior to the signing of an agreement of transfer by the seller and buyer." Section 35.284a(a)(3) puts the same deadline on the licensee, who must deliver the completed statement, or one marked refused, to the buyer's side before the agreement of sale is executed. Delivery after signing, at settlement or on a lender's timetable would defeat the purpose, which is to inform the decision to contract; section 7312 accordingly allows amendment only before that signing. Section 7310 keeps the agent's own exposure narrow, since an agent is not liable for a violation "unless the agent had actual knowledge of a material defect that was not disclosed," while section 7311(b) gives the buyer two years from final settlement to sue.

A Pennsylvania agreement of sale for a commercially zoned parcel omits the property's zoning classification. The agreement is:

• a.Void from the outset, so that neither party may enforce any term
• b.Voidable by the seller, who may retain the deposit as damages
• c.Voidable by the buyer, whose deposit is returned without court action✓
• d.Fully enforceable, because zoning is a matter of public record

Section 608.2(3) requires the sales contract to state the zoning classification of the property, except where the property or each subdividable parcel is zoned solely or primarily for single-family dwellings, and provides that failure "shall render the sales agreement or sales contract voidable at the option of the buyer, and, if voided, any deposits tendered by the buyer shall be returned to the buyer without a requirement for court action." Section 35.333(a)(6) carries the requirement and the remedy into the regulations. Voidable is not void: the contract stands unless the buyer elects to undo it, which is why neither automatic unenforceability nor a seller-side option fits. The buyer's deposit comes back without litigation, so a seller who kept it would run into section 608.5 as well. Section 608.2(4) adds a second mandatory statement to the same contract, that access to a public road may require a highway occupancy permit from the Department of Transportation.

A housing discrimination complaint against a Pennsylvania licensee is filed with the Pennsylvania Human Relations Commission. If that body has not acted on it within 90 days, the State Real Estate Commission may:

• a.Suspend the licensee's license without any hearing
• b.Proceed with its own action against the licensee✓
• c.Refer the file to the Attorney General for prosecution
• d.Close the file, because the complaint has grown stale

Section 604(a)(22) makes a violation of the Pennsylvania Human Relations Act a prohibited act where it produced an order or consent decree of the Human Relations Commission in an area of activity RELRA authorizes, and then sets out the sequencing. Subparagraph (ii) preserves the State Real Estate Commission's power to run its own investigation and keep its own file; subparagraph (iii) provides that if the Human Relations Commission "does not act on a discrimination complaint within 90 days after it is filed ... then the State Real Estate Commission may proceed with action against such licensee"; and subparagraph (iv) limits that 90-day wait to initial complaints, so second and subsequent complaints may be brought straight to the State Real Estate Commission. Discipline still requires the hearing machinery of sections 604(a) and 701 rather than a summary suspension, the Attorney General's enforcement role under RELRA is confined to section 609, and nothing in the paragraph closes a file for delay. Subparagraph (i) lists the conduct concerned, including accepting listings on the understanding that illegal discrimination will be practiced.

A Pennsylvania buyer signs a contract to purchase a time share. The buyer may cancel until midnight of the:

• a.Third day following the date of the transaction
• b.Tenth day following the date of the transaction
• c.Fifth day following the date of the transaction✓
• d.Thirtieth day following the date of the transaction

Section 609(a) gives a purchaser the right to cancel the purchase of a time share or a campground membership "until midnight of the fifth day following the date on which the purchaser executed the purchase contract," and section 609(b) requires that right to appear in bold face type of at least ten point immediately above the purchaser's signature, separately initialed. Notice must go by certified return receipt mail or another bona fide means that gives the purchaser a receipt, and section 609(d) requires all payments to be refunded within ten business days. The right cannot be waived under section 609(e) and the purchaser incurs no damages for exercising it under section 609(f). Thirty days is the deadline in a different and much newer provision: section 610, added by Act 52 of 2024, gives a consumer in a wholesale transaction until midnight of the 30th day after execution, or until conveyance if that comes first, with the same ten-business-day refund.