Rhode Island Real Estate Broker Exam — All Questions

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)).