Rhode Island 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 state entity issues and disciplines real estate broker licenses in Rhode Island?

• a.The Rhode Island Association of Realtors, through its rules for members
• b.The Rhode Island Secretary of State, through its Business Services Division
• c.The tax assessor of the city or town in which the property is located
• d.The Department of Business Regulation, Division of Commercial Licensing✓

R.I. Gen. Laws § 5-20.5-6(a) puts the licensing decision in the hands of the director of business regulation, and § 5-20.5-14 gives the same director the power to refuse, suspend or revoke a license for cause; the Department runs that work through the Real Estate Section of its Division of Commercial Licensing under 230-RICR-30-20-2. The Secretary of State keeps the state's public records and business filings, so a brokerage's corporate registration there is a filing, not a license. A municipal tax assessor values property for taxation, which says nothing about who is fit to be paid for selling it. A trade association's rules bind those who join it by agreement rather than by law, and no association can grant or take away a license.

What role does the Rhode Island Real Estate Commission play in the licensing examination?

• a.It drafts and scores every examination item itself, using no testing service
• b.A policy-making role in preparing it, and a review of it after it is given✓
• c.It may waive the examination for any applicant it interviews and approves
• d.It has no examination role at all, because the governor sets that policy

R.I. Gen. Laws § 5-20.5-12(e) states that the commission “shall have a policy-making role in the preparation and composition of the examinations to be administered by the real estate division within the department of business regulation” and that “subsequent to the administration of the examination, the commission shall review the examinations to evaluate their effectiveness.” The commission is nine gubernatorial appointees, at least one from each county, plus the attorney general and the director as ex-officio voting members. It does not write or score items; the Department contracts that work to a testing service, and the examination fee under § 5-20.5-11(a)(2) is set by that service's contract. Waiver of the examination is statutory, not discretionary: § 5-20.5-4(d) grants a license without examination only to an attorney admitted by the state supreme court. And the governor appoints the members but sets no examination policy.

In Rhode Island, which activity may a licensed broker perform that a licensed salesperson may not?

• a.Show a listed property to a prospective buyer during ordinary business hours
• b.Attend the closing of a transaction that the licensee personally negotiated
• c.Complete the continuing education required before a license may be renewed
• d.Operate a brokerage and hold clients' deposit money in its escrow account✓

The line between the two licenses is independence and custody of other people's money. 230-RICR-30-20-2 § 2.5 provides that a salesperson “must be affiliated with a licensed principal broker in order to engage in any real estate activity requiring licensure” and “shall not operate, supervise, or manage a real estate brokerage,” and § 2.18(B)(1) requires an affiliated licensee to turn all deposit monies over to the principal broker rather than hold them. Showing property and attending a closing are the everyday work of a salesperson under a broker's supervision. Continuing education under § 2.30 is a renewal condition for every licensee, broker and salesperson alike, so it marks no boundary between them.

A Rhode Island salesperson applies to renew a license that lapsed fourteen months ago. What is required?

• a.The renewal fee plus the one hundred dollar late fee for a lapsed license
• b.A statement from her principal broker that she kept practicing throughout
• c.A new application and a passing score on the licensing examination again✓
• d.Nothing beyond the fee, because a Rhode Island license does not truly expire

R.I. Gen. Laws § 5-20.5-11(b) closes with the operative sentence: “At no time shall any license be renewed without examination if the license has expired beyond a period of one year.” 230-RICR-30-20-2 § 2.6(C) says the same thing from the other side — “if a license has expired for more than one (1) year, the former licensee must complete a new application and retake the examination.” The hundred-dollar late fee in § 5-20.5-11(a)(7) is real, but it reinstates a license only inside that one-year window. A broker's certification cannot substitute for the examination, and practicing on a lapsed license is itself prohibited by 230-RICR-30-20-2 § 2.15(A). Licenses do expire: § 5-20.5-6(a) caps any license term at three years and § 2.9 sets a two-year renewal cycle.

How much continuing education must a Rhode Island licensee complete for each two-year renewal?

• a.Twelve clock hours, six of them core, and two of those in fair housing
• b.Six clock hours in any approved subject, with no fair housing requirement
• c.Forty-five clock hours, fifteen of them core, five of those in fair housing
• d.Twenty-four clock hours, nine of them core, three of those in fair housing✓

R.I. Gen. Laws § 5-20.5-6(b) requires proof of “a minimum of twenty-four (24) classroom hours” completed during the preceding two-year period, of which “a minimum of three (3) classroom hours shall be comprised of instruction about federal, Rhode Island, or local laws pertaining to fair housing.” 230-RICR-30-20-2 § 2.30(B) adds the middle layer: at least nine of the twenty-four hours must come from listed CORE subjects, and at least three of those nine must be the fair housing hours. Forty-five classroom hours is the pre-licensing requirement for a salesperson under § 5-20.5-4(b), not a renewal requirement. Two exemptions exist and neither reduces the number: § 2.30(D) exempts licensees first licensed before December 12, 1984, and attorneys licensed under § 5-20.5-4(d).

What is the most the Rhode Island real estate recovery account will pay on account of any one licensee?

• a.Ten thousand dollars
• b.One hundred thousand dollars
• c.Two hundred thousand dollars
• d.Fifty thousand dollars✓

R.I. Gen. Laws § 5-20.5-5(h) is explicit: “the liability of that portion of the real estate recovery account allocated for the purposes of the real estate recovery account shall not exceed fifty thousand dollars ($50,000) for any one licensee,” and § 5-20.5-5(a)(1) sets the same ceiling on any single aggrieved person's recovery for fraud, misrepresentation or deceit. Two hundred thousand dollars is a different figure in the same section: under § 5-20.5-5(b), if the account balance falls below that on December 31, every licensee pays an extra twenty-five dollars at the next renewal. A claimant must first exhaust all other remedies against the licensee, and under § 5-20.5-5(c)(5) a payment from the account automatically revokes the licensee's license until the money is repaid with twelve percent annual interest.

Rhode Island conditions a real estate license on the licensee carrying which coverage?

• a.A fidelity bond running in favor of the Department of Business Regulation
• b.Errors and omissions insurance for the business activities contemplated✓
• c.Flood insurance on the premises occupied by the licensee's fixed office
• d.Life insurance on the licensee naming the principal broker as beneficiary

R.I. Gen. Laws § 5-20.5-25(a) requires that all holders of brokers' and salespersons' licenses “shall, as a condition of retaining that license, carry and maintain errors and omissions insurance covering all business activities contemplated,” and § 5-20.5-25(d) requires a certificate of coverage to be filed with the Department by each annual license renewal date. Note the section number: the Pearson VUE outline cites § 5-20.5-27 under a different heading, and that section is License required for ownership, not insurance. 230-RICR-30-20-2 § 2.28(A)(1) sets the minimum for an individual licensee at fifty thousand dollars per claim and one hundred fifty thousand in the aggregate, and § 2.28(B) and (C) require the licensee to stop all licensed activity immediately if the coverage lapses and to notify the Department within five business days. No bond, flood policy or life policy is a condition of licensure.

Beyond passing the examination, what must a Rhode Island broker applicant show under § 5-20.5-4(b)?

• a.One year full time as a salesperson and forty-five classroom hours of study
• b.Three years full time as a salesperson and sixty classroom hours of study
• c.Two years full time as a salesperson and ninety classroom hours of study✓
• d.Five years full time as a salesperson and thirty classroom hours of study

R.I. Gen. Laws § 5-20.5-4(b) requires the broker applicant to prove that he or she “has been engaged full time as a real estate salesperson for at least two (2) years immediately prior to the date of application” and “has successfully completed at least ninety (90) hours of approved classroom study” in a school defined by § 5-20.5-19. Forty-five hours is the salesperson requirement in the same subsection, and 230-RICR-30-20-2 § 2.7(C) forbids counting those forty-five hours toward the ninety and disregards classroom hours older than four years. The application must also carry the names of at least three Rhode Island residents who have known the applicant for three years, are unrelated to the applicant, and will attest to a good reputation for honesty and trustworthiness (§ 5-20.5-3(c)).

In advertising by a Rhode Island real estate team, how must the brokerage name appear?

• a.Anywhere on the piece, in whatever size the principal broker has approved
• b.On the reverse of the material only, so that the team name leads the front
• c.Larger and more prominent than the team name, and in close proximity to it✓
• d.In the advertisement only when it runs in a printed newspaper or magazine

230-RICR-30-20-2 § 2.25(C)(1)(a) states that “the name of the Brokerage shall be displayed so that it is larger and more prominent than any included name of a Licensee or Team” and “should be in close proximity to the Licensee's name and/or Team's name.” Subsection (b) adds that a licensee or team name, except on a business card, must be smaller and less conspicuous than the brokerage name. The rule is medium-neutral: § 2.25(A) sweeps in signs, billboards, email, websites, social media and broadcast, and § 2.25(E)(2) requires the brokerage name and contact information on the home page and every viewable page of a licensee or team website. A team name must also contain the word “Team” or “Group” and may not use words such as Realty, Agency, Associates or Company that would read as a brokerage name.

A Rhode Island salesperson runs a classified ad for a listing giving only her own mobile number. What is this?

• a.A prohibited advertisement, because it reads as a sale by a private party✓
• b.A compliant advertisement, because classified listings are exempt from the rules
• c.A compliant advertisement, so long as the seller approved its exact wording
• d.A compliant advertisement, because her license number appears in the listing

R.I. Gen. Laws § 5-20.5-14(29) makes it a ground for discipline to advertise the property of another “in a manner indicating that the offer to sell, buy, exchange, rent, or lease that property is being made by a private party not engaged in the real estate business, or inserting advertisements in any publication containing only a post office or other box number, telephone number, or street address,” and it closes with the flat rule that “no salesperson shall advertise the property of another under his or her own name.” 230-RICR-30-20-2 § 2.25(C)(1) requires the brokerage name in all advertising and creates no exemption for classified advertisements. A seller cannot consent the licensee out of a licensing rule, and a license number is not a substitute for the brokerage name the rule demands.

From whom may a Rhode Island salesperson accept a commission for licensed activity?

• a.Only from the licensed broker with whom the salesperson is affiliated✓
• b.From the cooperating broker who represented the buyer in the same transaction
• c.From any party to the transaction who agrees in writing to pay the salesperson
• d.From the seller directly, whenever the listing agreement expressly allows it

R.I. Gen. Laws § 5-20.5-14(12) makes it a ground for discipline for a salesperson to accept “a commission or any valuable consideration ... from any person, except the licensed real estate broker with whom he or she is affiliated.” The matching prohibition runs the other way in § 5-20.5-14(31), which bars a licensee from sharing a commission with anyone who is neither a licensed broker nor a salesperson employed by that licensee. Even a seller's extra incentive payment is routed through the broker: 230-RICR-30-20-2 § 2.21(C) requires a written agreement and requires the payment to be distributed to the licensee by the principal broker with whom he or she is affiliated. Cooperating brokers settle between brokers, not with the other firm's salesperson.

How long does a Rhode Island employing broker have to notify the director that a salesperson's affiliation has ended?

• a.Thirty days, in writing
• b.Ninety days, in writing
• c.Sixty days, in writing
• d.Ten days, in writing✓

R.I. Gen. Laws § 5-20.5-14(33) makes it a ground for discipline where there is a “failure of the employing broker to notify the director, in writing, within ten (10) days of the termination of a salesperson's employment or contractual relationship,” and it imposes the identical ten-day written duty on the salesperson for any change in broker affiliation. Ten days is the recurring interval in this scheme: 230-RICR-30-20-2 § 2.3 gives a licensee ten days to report a change of name, firm affiliation or address, § 2.4(E)(3) gives a principal broker ten days to report a change in that status, and § 2.11 gives ten days to return licenses on dissolution of a brokerage. On disaffiliation § 2.10 also requires the new brokerage's principal broker to sign and submit a transfer form.

Within what period must a Rhode Island principal broker account for and pay an affiliated licensee's share of a commission?

• a.Ten calendar days from the principal broker's receipt of the commission✓
• b.Thirty calendar days from the end of the month in which it was received
• c.Sixty calendar days from the recording of the deed in the land records
• d.Three business days from the closing of the underlying real estate sale

230-RICR-30-20-2 § 2.21(A) provides that unless a written agreement between the principal broker and the affiliated licensee, cooperating broker and referring broker expressly says otherwise, all commissions due “shall be subject to an accounting and payment ... no later than ten (10) calendar days from the receipt of such commission by the principal broker.” The clock therefore runs from the broker's receipt of the money, not from the closing or from the recording of the deed. A separate and longer clock covers departures: under § 2.21(B) every principal broker must have a written, signed policy on commissions payable after termination and must render a complete written accounting within thirty days of the termination.

An unlicensed person negotiates a Rhode Island sale, is not paid, and sues the seller for the fee. What follows?

• a.The action succeeds, because the seller accepted the benefit of his work
• b.The action fails, because he held no broker license when he did the acts✓
• c.The action succeeds if he obtains a broker license before the trial date
• d.The action is stayed until the Department decides whether to license him

R.I. Gen. Laws § 5-20.5-21 provides that “no person shall maintain an action in any court of this state for the recovery of a commission, fee, or compensation for any act done, the doing of which is prohibited under this chapter to other than licensed brokers, unless that person was licensed under this chapter as a broker at the time of the doing of the act.” The test is the licensing status at the time of the act, so a license obtained later does not revive the claim, and the seller's acceptance of the benefit does not cure it. Acting without a license is separately a misdemeanor under § 5-20.5-17(a), and § 5-20.5-17(b) exposes the unlicensed person to a penalty of up to three times any money actually received. The Department has no power to stay a civil action.

When must a Rhode Island licensee disclose in writing that he intends to buy part of the property he is selling?

• a.At the closing, when the settlement statement is signed by both parties
• b.At the first point of personal contact, and no later than making an offer✓
• c.Within ten days after the purchase and sale agreement has been executed
• d.Only if the seller asks the licensee whether he holds such an interest

230-RICR-30-20-2 § 2.21(G) requires that “in any real estate transaction, a licensee shall at the first (1st) point of personal contact, but no later than making an offer to purchase, disclose in writing” whether the licensee has an ownership interest in the property, will be purchasing any portion of it, has a business interest in a party, or is representing a family or household member. R.I. Gen. Laws § 5-20.5-14(13) reaches the same conduct from the discipline side, making it a ground for revocation to fail to disclose an intention to acquire, directly or through a third party, an interest in property listed with the licensee's office. The duty is affirmative, so it does not wait for the seller's question, and disclosure at the closing or ten days after the agreement comes far too late to inform the seller's decision.

May a Rhode Island licensee act for more than one party in the same transaction?

• a.Yes, provided the licensee tells each party orally before an offer is made
• b.Yes, with the knowledge and written consent of every party acted for✓
• c.Yes, provided the principal broker approves the arrangement in advance
• d.No, a licensee may not act for more than one party in any circumstance

R.I. Gen. Laws § 5-20.5-14(7) makes it a ground for discipline to act “for more than one party in a transaction without the knowledge and consent, in writing, of all parties for whom he or she acts,” so consent is required and it must be written rather than oral. Chapter 5-20.6 supplies the machinery: § 5-20.6-6(a) permits a licensee to assist both clients only as a neutral dual facilitator, and § 5-20.6-6(c) requires the informed written consent of the principal broker and of all parties before an offer is presented. The principal broker's approval is necessary but not sufficient, since the parties' own consent is what § 5-20.5-14(7) demands. And the arrangement is not forbidden outright — § 5-20.6-6(b) contemplates it, subject to the neutrality and confidentiality duties in § 5-20.6-6(c)(1) through (4).

What does the Department's regulation require of a Rhode Island client representative about property facts?

• a.Verifying facts only where the buyer pays for a separate investigation
• b.Repeating only what the seller has entered on the state disclosure form
• c.A diligent effort to learn them, and written disclosure of material facts✓
• d.Withholding facts likely to reduce the price the client would accept

230-RICR-30-20-2 § 2.22(B) requires every licensee to “make a diligent effort to ascertain all pertinent information and facts, including but not limited to lot size, zoning, presence or absence of town water or sewer connection,” and provides that the client representative “shall reveal, in writing, all information and facts material to any transaction to his or her client and when appropriate to any other party,” expressly including any conflicts of interest the licensee can reasonably anticipate. Section 2.22(A) adds that all licensees shall deal fairly with all parties. Passive repetition of the seller's form is not a diligent effort; the licensee's duty does not depend on who pays for an inspection; and suppressing a material fact to protect a price is the “bad faith, dishonesty, untrustworthiness, or incompetence” that § 5-20.5-14(20) punishes.

How does Rhode Island treat the fact that a homicide once occurred in a house being sold?

• a.It is a material fact that the seller's agent must disclose in writing
• b.It is a material fact that must be entered on the seller disclosure form
• c.It is not a material fact, so this chapter requires no disclosure of it✓
• d.It must be disclosed only to a buyer who intends to occupy the property

R.I. Gen. Laws § 5-20.8-6(a) provides that “the fact or suspicion that real property may be or is psychologically impacted is not a material fact requiring disclosure in any real estate transaction,” and it defines psychologically impacted to include property suspected of having been the site of “a homicide, other felony, or suicide” as well as occupancy by a person with HIV or AIDS or a similar condition unlikely to be transmitted by occupying a dwelling. Section 5-20.8-6(b)(1) bars any cause of action against the seller or agent for not disclosing it. The rule has one hard limit that candidates miss: § 5-20.8-6(b)(2) says the provision is never authorization “for an agent or seller to make any misrepresentation of fact or false statement,” so a licensee asked directly may not lie. The buyer's intended use makes no difference.

When must a Rhode Island licensee furnish a copy of a listing, sale, or lease contract to those who signed it?

• a.Within three days after its execution
• b.At the closing of the transaction
• c.Within ten days after its execution
• d.At the time the contract is executed✓

R.I. Gen. Laws § 5-20.5-14(9) makes it a ground for discipline to fail “to furnish a copy of any listing, sale, lease, or other contract relevant to a real estate transaction to all signatories of the contract at the time of execution.” The phrase is “at the time of execution,” so nothing later satisfies it, and the duty runs to every signatory rather than to the client alone. Related timing rules do use days, which is what makes the wrong answers tempting: § 5-20.5-14(37) gives a broker ten days from a written release signed by all parties to pay out escrowed money in a failed transaction, and § 5-20.8-4(a) gives a buyer a ten-day inspection period. Neither governs handing over the signed contract itself.

How long must a Rhode Island licensee preserve the records of a real estate transaction?

• a.Three years following its consummation✓
• b.Five years following its consummation
• c.Seven years following its consummation
• d.One year following its consummation

R.I. Gen. Laws § 5-20.5-14(6) makes it a ground for discipline to fail “to preserve for three (3) years following its consummation records relating to any real estate transaction as described in the regulations issued by the department.” The same three-year period governs escrow records under § 5-20.5-26(a)(1)(i) and under 230-RICR-30-20-2 § 2.20(A), which requires records of all funds and property of others to be kept for not less than three years from the date of receipt. Section 2.20(B) then lists what those records must include — bank statements, canceled checks, journals or check stubs, contracts and leases, and closing statements — and requires the ledgers to be reconciled to the bank statements monthly. Section 2.20(C) makes all escrow records available to the Department on demand.

At what point must a customer's deposit money reach a Rhode Island broker's escrow account?

• a.Upon execution of the purchase and sales agreement✓
• b.Upon the buyer's mortgage commitment being issued
• c.Upon the seller accepting the buyer's first written offer
• d.Upon the closing attorney requesting the deposit funds

R.I. Gen. Laws § 5-20.5-14(5) makes it a ground for discipline to fail to deposit customers' funds “into an escrow account maintained by the broker that complies with the requirements set forth in § 5-20.5-26, upon execution of a purchase and sales agreement.” 230-RICR-30-20-2 § 2.18(A)(4) tracks it: funds designated for escrow are deposited “promptly after the execution of the purchase and sales agreement” or, for a rental, promptly after receipt — and § 2.2(A)(10) defines “promptly” as not more than ten calendar days. Section 2.18(A)(3) sends the funds to the escrow account of the principal broker of the seller or landlord unless the parties agree otherwise in writing. Neither a mortgage commitment nor a request from the closing attorney has anything to do with the trigger.

A Rhode Island salesperson takes a buyer's deposit check. What does the regulation require her to do?

• a.Turn it over to her principal broker promptly, meaning within ten days✓
• b.Hold it in her own client account until the parties reach a closing date
• c.Deposit it with the buyer's attorney within three business days of receipt
• d.Endorse it to the seller as soon as the seller has signed the buyer's offer

230-RICR-30-20-2 § 2.18(B) is headed “Salespersons and Teams are Prohibited from Holding Client Funds,” and § 2.18(B)(1) requires an affiliated licensee to “turn over all deposit monies received promptly to his or her principal broker or, at the direction of the principal broker, deposit the funds in the principal broker's escrow account.” Section 2.2(A)(10) defines “promptly” as not more than ten calendar days. A salesperson may not run a client account of her own, and § 2.18(B)(2) forbids a team from keeping any escrow account separate from the principal broker's. Section 2.18(C)(3) is equally blunt about the last option: a licensee who receives deposit funds payable directly to him or her shall not turn the funds over to a seller.

What must every Rhode Island listing agreement say about when the listing ends?

• a.A rolling term renewing automatically unless the owner objects in writing
• b.A term running until the property sells at the price the owner has set
• c.A term fixed by the multiple listing service to which the broker belongs
• d.A definite expiration date requiring no notice of termination by the owner✓

R.I. Gen. Laws § 5-20.5-14(21) requires all listing agreements to be in writing, properly identifying the property and containing all the terms and conditions of the sale, the commission to be paid, the signatures of all parties concerned, and “a definite expiration date in that contract that shall not require an owner to notify a broker of his or her intention to terminate.” Section 5-20.5-14(10) states the same rule as a prohibition on failing to specify a definite termination date not subject to prior notice. That is precisely what rules out an automatically renewing term. The agreement must also indicate clearly whether it is an exclusive agency or an exclusive right to sell, and under 230-RICR-30-20-2 § 2.26(A) it may not carry a pre-printed commission rate or amount.

A Rhode Island seller asks the broker to keep everything above four hundred thousand dollars as the fee. What must the broker do?

• a.Accept it, provided the arrangement is written into the listing agreement
• b.Decline the arrangement, because a net listing is prohibited in this state✓
• c.Accept it, provided the seller signs a separate written acknowledgment
• d.Accept it, provided the broker discloses the arrangement to the buyer

R.I. Gen. Laws § 5-20.5-14(22) makes “accepting a listing based on ‘net price’” a ground for discipline and prescribes the cure: “in cases where the owner wishes to list in this manner, the agreed-upon commission is added and listings made in the usual manner.” 230-RICR-30-20-2 § 2.26(D) puts it flatly — “no licensee shall enter into a ‘net listing’ contract for the sale of real property, or any interest therein” — and § 2.2(A)(9) defines the term as an authorization to sell at a specified net return with the broker keeping the difference. Because the prohibition is on the arrangement itself, no amount of writing, acknowledgment or disclosure to the buyer makes it lawful. The broker converts it instead into an ordinary listing at a stated price with a stated commission.

A Rhode Island brokerage offers a prize drawing to anyone who tours its new subdivision. How is this treated?

• a.As allowed, if the drawing is open to buyers and sellers on equal terms
• b.As prohibited, being a contest used to influence prospective purchasers✓
• c.As allowed, if the value of the prize is under five hundred dollars
• d.As allowed, if the rules of the drawing are filed with the Department

R.I. Gen. Laws § 5-20.5-14(18) makes it a ground for discipline to solicit, sell or offer real property for sale “by offering free lots or conducting lotteries or contests or offering prizes for the purpose of influencing a purchaser or prospective purchaser of real property.” The statute attaches no value threshold, no filing procedure and no even-handedness exception, so none of the conditions offered rescues the drawing. The neighboring provisions police the same instinct from other directions: § 5-20.5-14(19) forbids paying, accepting or charging any undisclosed commission, rebate or profit, and 230-RICR-30-20-2 § 2.25(H)(7) bars advertising rebates, discount plans or coupons where the offer is likely to confuse or mislead a reasonable person.

A Rhode Island licensee talks a buyer into breaking a signed contract so he can write a replacement and earn the fee. What is this?

• a.Permissible conduct, because a buyer may cancel any contract before closing
• b.Permissible conduct, if the replacement contract is on better buyer terms
• c.A matter for the courts alone, and outside the Department's jurisdiction
• d.A ground for discipline, because the substitution serves his personal gain✓

R.I. Gen. Laws § 5-20.5-14(11) makes it a ground for discipline to induce “any party to a contract, sale, or lease to break that contract for the purpose of substitution in lieu of that contract a new contract, where that substitution is motivated by the personal gain of the licensee.” The licensee's motive is the whole of the test, so terms that happen to favor the buyer do not excuse it, and a buyer's general freedom to negotiate is not a licensee's freedom to procure a breach. The Department plainly has jurisdiction: § 5-20.5-14(a) lets the director act on his own motion and obliges him to act on a written verified complaint, and § 5-20.5-14(b) authorizes an administrative penalty of up to two thousand dollars in addition to any court remedy the injured party pursues.

A Rhode Island licensee tells a buyer she does not need a lawyer at the closing. What does the license law say?

• a.It is a ground for discipline to advise against the services of an attorney✓
• b.It is permitted where the licensee has completed an approved contracts course
• c.It is permitted where the brokerage supplies a standard form of agreement
• d.It is permitted where the buyer pays cash and takes no mortgage financing

R.I. Gen. Laws § 5-20.5-14(25) lists “advising against the use of the services of an attorney in any real estate transaction” among the acts for which the director may refuse, suspend or revoke a license. The prohibition is unqualified: it does not turn on the licensee's education, on the form of contract the office uses, or on whether the transaction involves a mortgage. It marks the boundary of the license, and the same boundary appears in 230-RICR-30-20-2 § 2.27, which forbids a licensee who is not a certified appraiser from calling any valuation an appraisal. Rhode Island reinforces the point on the other side of the line by exempting attorneys from the licensing requirement in § 5-20.5-2(b)(1).

May an attorney admitted by the Rhode Island Supreme Court sell real estate for others without a broker license?

• a.No, an attorney must first obtain a Rhode Island salesperson's license
• b.No, unless the attorney has also completed the ninety classroom hours
• c.Yes, because attorneys at law are excluded from the chapter's definitions✓
• d.Yes, but only when acting under a written power of attorney from the owner

R.I. Gen. Laws § 5-20.5-2(b)(1) provides that the chapter “is also not to be construed to include ... any attorney at law licensed by the supreme court of the state nor any person holding in good faith an executed power of attorney from the owner, authorizing the final consummation and execution for the sale, purchase, leasing, or exchange of real estate.” Those are two separate exemptions, so the attorney needs no power of attorney to rely on the first. An attorney who does want the credential gets it on easy terms rather than hard ones: § 5-20.5-4(d) grants a license without examination on application and payment of the fee, and 230-RICR-30-20-2 § 2.30(D)(2) exempts such an attorney from continuing education. The ninety classroom hours in § 5-20.5-4(b) apply to ordinary broker applicants.

How must a Rhode Island licensee who is not a certified appraiser label a value figure prepared for a listing?

• a.As an appraisal, provided the licensee holds a broker rather than a sales license
• b.As an appraisal, provided the seller asked the licensee for a value figure
• c.As a comparative market analysis or broker price opinion, not an appraisal✓
• d.As either term, because the two words carry the same meaning in practice

230-RICR-30-20-2 § 2.27(A) prohibits licensees who are not licensed or certified under chapter 5-20.7 “from describing or referring to any valuation of real estate as an appraisal,” and § 2.27(B) permits a broker price opinion or comparative market analysis provided the licensee discloses that it is not an appraisal conforming to the Uniform Standards of Professional Appraisal Practice and includes the disclaimer the regulation sets out word for word. The statutory definition agrees: § 5-20.5-1(3) defines a licensee's “opinion of value” and expressly excludes an appraisal prepared under chapter 5-20.7. Holding a broker rather than a salesperson license changes nothing, and a client's request cannot enlarge the scope of a license.

A Rhode Island licensee pleads nolo contendere to a misdemeanor. What does the regulation require?

• a.A written report to the Department within ten days of the arraignment date
• b.No report at all, unless the offense arose out of a real estate transaction
• c.A written report to the principal broker, who decides whether to report it
• d.A written report to the Department within sixty days of the final judgment✓

230-RICR-30-20-2 § 2.13 requires that “any licensee convicted of, or otherwise pleads guilty or nolo contendere to, any felony or misdemeanor, or is disciplined by any governmental agency in connection with any other occupational license, shall file with the Department a written report of such conviction or disciplinary action within sixty (60) days of the final judgment or final order in the case.” The trigger is the final judgment, not the arraignment; the report goes to the Department rather than to the principal broker; and the duty reaches any felony or misdemeanor, whether or not it arose from a real estate transaction. A separate provision, § 5-20.5-14(14), makes conviction of or a nolo plea to a felony involving dishonesty or breach of trust its own ground for discipline.

Which characteristic is a protected class under the Rhode Island Fair Housing Practices Act but not under the federal Fair Housing Act?

• a.The race or color of a tenant
• b.The religion a prospective tenant practices
• c.The national origin of a prospective tenant
• d.The lawful source of a tenant's income✓

R.I. Gen. Laws § 34-37-4(a) bars an owner or agent from refusing to sell, rent or lease, or from inquiring, on the basis of “race, color, religion, sex, sexual orientation, gender identity or expression, marital status, lawful source of income, military status as a veteran with an honorable discharge ..., servicemember in the armed forces, country of ancestral origin, or disability, age, familial status,” and separately protects a person who is or has been the victim of domestic abuse or who has sought a restraining order. Lawful source of income — which reaches housing vouchers — is one of the Rhode Island additions, along with sexual orientation, gender identity or expression, marital status, military status and age. Race, color, religion and national origin are federal classes under 42 U.S.C. § 3604 as well, so none of them distinguishes the state act. Complaints go to the Rhode Island Commission for Human Rights within one year of the practice (§ 34-37-5(b)).

A Rhode Island broker managing residential rentals must ensure the firm's advertising does what?

• a.Omits the brokerage name so no firm is associated with a rental listing
• b.Complies with the Fair Housing Practices Act in wording and in targeting✓
• c.Targets tenants by protected class so that vacant units fill more quickly
• d.Promises the owner a specific rate of return on the rental investment

R.I. Gen. Laws § 34-37-4(a) forbids an owner or agent from issuing “any advertisement relating to the sale, rental, or lease of the housing accommodation that indicates any preference, limitation, specification, or discrimination” on a protected basis, and 230-RICR-30-20-2 § 2.14(C) repeats the prohibition as a licensing rule covering advertising, application forms and inquiries alike. Targeting tenants by protected class is the discrimination the Act forbids, and filling units faster is not a defense. Omitting the brokerage name breaks a different rule: § 2.25(C)(1) requires the brokerage name in all advertising, displayed larger and more prominently than any licensee or team name. Guaranteeing an owner a rate of return is a claim about money that § 5-20.5-14(2) treats as a false promise likely to induce a contract.

What does the Rhode Island Residential Landlord and Tenant Act govern?

• a.The rights and duties of residential landlords and tenants in this state✓
• b.The licensing and continuing education of real estate appraisers here
• c.The granting of variances by municipal zoning boards of review here
• d.The terms of commercial office leases and no residential tenancy at all

Chapter 34-18 sets out the rights and obligations of residential landlords and tenants — security deposits under § 34-18-19, the terms a rental agreement may and must contain under § 34-18-15, and the notice each side must give to end a periodic tenancy under § 34-18-37. A broker who handles rentals or manages property in Rhode Island works inside it, which is why 230-RICR-30-20-2 § 2.30(B)(1)(c) lists Rhode Island landlord-tenant law as a continuing education core subject and § 2.12 requires a license for anyone managing another person's property for compensation. Appraiser credentials belong to chapter 5-20.7 and a separate profession; zoning variances are decided by local boards under title 45; and the Act is residential by its own title, so a commercial-only reading omits exactly what it covers.

What limits does Rhode Island place on a residential security deposit and its return?

• a.One month's rent at most, itemized and returned within twenty days✓
• b.Three months' rent at most, itemized and returned within sixty days
• c.No limit on the amount, but it is returned within fourteen days
• d.Two months' rent at most, itemized and returned within thirty days

R.I. Gen. Laws § 34-18-19(a) provides that “a landlord may not demand or receive a security deposit, however denominated, in an amount or value in excess of one month's periodic rent.” Subsection (b) requires the landlord to deliver a written, itemized notice of any deductions together with the balance “within twenty (20) days after the later of either termination of the tenancy, delivery of possession, or the tenant's providing the landlord with a forwarding address.” The penalty for missing it is steep: under § 34-18-19(c) the tenant may recover the amount due plus damages equal to twice the sum wrongfully withheld, plus reasonable attorney fees. A separate furniture security deposit of up to one further month's rent is allowed under § 34-18-19(e), but only where the landlord's furniture is worth five thousand dollars or more.