South Carolina 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 body licenses and regulates real estate brokers in South Carolina?

• a.The South Carolina Real Estate Commission✓
• b.The South Carolina Department of Consumer Affairs
• c.The South Carolina Department of Revenue
• d.The South Carolina Bar's real property section

Section 40-57-10 creates "the South Carolina Real Estate Commission under the administration of the Department of Labor, Licensing and Regulation," and Section 40-57-60 gives that commission the power to set qualifications for licensure, conduct disciplinary hearings, promulgate regulations and set the fee schedule. The Department of Consumer Affairs administers the Consumer Protection Code in Title 37 and takes consumer complaints, but it issues no occupational license and disciplines no licensee. The Department of Revenue collects the deed recording fee imposed by Section 12-24-10 and administers property and income taxes, which is a revenue function rather than a licensing one. The Bar's real property section is a voluntary group of practicing lawyers with no statutory authority over anyone; attorneys are admitted and disciplined by the Supreme Court, not by any real estate body.

South Carolina real estate license law is found primarily in:

• a.Title 12 of the South Carolina Code (Taxation)
• b.The South Carolina Constitution
• c.Title 56 of the South Carolina Code (Motor Vehicles)
• d.Title 40, Chapter 57 of the South Carolina Code✓

South Carolina's real estate license law sits in Title 40, Chapter 57 of the state code, the code title devoted to professions and occupations, and it is there that license categories, qualifying standards, and grounds for discipline are set out. The broker exam tests those state provisions alongside the national body of knowledge. The taxation title governs how property and income are taxed, not who may be licensed to sell real estate. The motor vehicles title covers driving and vehicle regulation and has no bearing on brokerage practice. The state constitution establishes the framework of government; occupational licensing requirements are enacted by the legislature as statutes rather than written into the constitution itself.

In South Carolina's license ladder, which credential is the supervisory tier responsible for a brokerage's trust account and licensees?

• a.Broker-in-charge✓
• b.Property manager-in-training
• c.Notary broker
• d.Provisional sales associate

Section 40-57-30(7) defines the broker-in-charge as "the sole broker designated by the commission to have responsibility over the actions of all supervised licensees," and Section 40-57-135(A)(7) makes that same person answerable for an active trust account whenever the firm holds other people's money. A broker license is the prerequisite step below that, which is why the broker exam already introduces the supervisory and trust duties a broker-in-charge later carries, and property management has its own parallel manager-in-charge role. The remaining choices name credentials this ladder does not use. Notarial authority is a separate commission unconnected to brokerage supervision, and a title implying trainee or provisional status describes someone working under supervision rather than the licensee who provides it.

A South Carolina broker who holds client earnest money must:

• a.Send it to the Real Estate Commission
• b.Hold it in cash until closing
• c.Deposit it into a designated trust account✓
• d.Keep it in the broker's personal savings account

Money that belongs to a client, earnest money above all, goes into a designated trust account and stays separate from the broker's own funds: Section 40-57-136(A)(1) requires "an active real estate trust account which must be a demand deposit account designated and titled to include the word 'trust' or the word 'escrow'," and Section 40-57-136(B)(3) forbids commingling. Sending the deposit to the licensing agency misreads its role, which is to regulate licensees rather than to hold the parties' funds; Section 40-57-60(B) even bars the commission from resolving money disputes between licensees. Holding the money as cash until closing leaves it untraceable and outside the accounting the trust rules exist to produce. Putting it in the broker's personal savings is the classic commingling violation, since the client's money becomes indistinguishable from the broker's own.

The South Carolina Vacation Rental Act (Title 27, Chapter 50, Article 2) is especially relevant to which market?

• a.Commercial office subleases
• b.Industrial warehouse sales
• c.Coastal and resort short-term rentals✓
• d.Farmland and pasture leasing in the upstate

The Vacation Rental Act reaches short-term rentals of residential property, which is why it matters most in the coastal and resort markets where that business is concentrated and where brokers who manage vacation rentals must know it. Cite it precisely: the Act is Article 2 of Title 27, Chapter 50, beginning at Section 27-50-210, while Chapter 50 as a whole is the Residential Property Condition Disclosure Act — so citing the chapter alone points at a different statute. A commercial office sublease is neither residential nor a short-term vacation stay, so it sits outside the Act's subject matter. An industrial warehouse sale is a conveyance of commercial property rather than a rental arrangement at all, and nothing in it involves the vacation-rental relationship the statute regulates. Leasing farmland or pasture is agricultural use rather than residential vacation use, whichever part of the state the acreage happens to lie in.

Under South Carolina's Residential Property Condition Disclosure Act, when must the owner deliver the completed disclosure statement to the purchaser?

• a.Only when the purchaser requests it in writing
• b.Before the contract is signed by both the purchaser and the owner✓
• c.At closing, along with the deed and the seller's affidavits
• d.Within ten days after the purchaser's offer is accepted

Section 27-50-50(A) is explicit: the owner "shall deliver to the purchaser the disclosure form required by this article before a real estate contract is signed by the purchaser and owner, or as otherwise agreed in the real estate contract." The point of the form is to inform the purchaser's decision to contract, so handing it over at closing comes far too late to serve that purpose and leaves the purchaser bound before learning anything. A ten-day window running from acceptance describes no provision of the article; the deadline is keyed to signature, not to acceptance. Making delivery depend on a written request inverts the statute, which places an affirmative duty on the owner whether or not the purchaser asks. Note also Section 27-50-50(B): failing to deliver the form does not void the agreement, create a defect in title, or justify delaying the closing.

South Carolina separately regulates the sale of vacation time-sharing plans under:

• a.The Vacation Time Sharing Plans Act, Title 27, Ch. 32✓
• b.The Uniform Commercial Code, Title 36 of the SC Code
• c.The South Carolina Income Tax Act, Title 12, Chapter 6
• d.The federal Truth in Lending Act and Regulation Z

Time-share sales are regulated separately from ordinary brokerage under the Vacation Time Sharing Plans Act in Title 27, Chapter 32, which adds disclosure requirements and gives purchasers a statutory right of rescission; the state's resort markets make this a distinctive exam topic, and Section 40-57-135(A)(3) expressly obliges a broker-in-charge to keep supervised licensees from violating that Act. The Uniform Commercial Code, adopted in South Carolina as Title 36, addresses commercial dealings in goods and secured interests, not the sale of interests in resort real estate. The state income tax law determines how income is taxed and creates no sales regulation or purchaser protections. Federal truth-in-lending rules govern credit disclosure when a purchase is financed; they may apply to a loan, but they neither replace nor supply this state regime.

The South Carolina Residential Landlord and Tenant Act (Title 27, Chapter 40) governs:

• a.The recording of deeds and mortgages in the land records
• b.The licensing and regulation of real estate appraisers
• c.The rights and duties of residential landlords and tenants✓
• d.The formation and governance of homeowners associations

The Residential Landlord and Tenant Act is the residential rental statute: it fixes the rights and duties on both sides of a home tenancy, including security-deposit handling, habitability, and the notices each party must give, and a broker managing residential rentals works inside it daily. Recording deeds and mortgages is the business of the county register of deeds and concerns title to property rather than the landlord-tenant relationship. Appraiser licensing is occupational credentialing carried out under Title 40, Chapter 60, an entirely different regulatory scheme. Homeowners associations are creatures of Title 27, Chapter 30 and of their own recorded declarations; that body of law binds owners in a community rather than a landlord and a tenant.

A South Carolina broker who manages long-term residential rentals must handle tenant security deposits by:

• a.Depositing them in the broker's own savings account until the tenancy ends
• b.Holding and accounting for them under the trust-account rules✓
• c.Refusing to return any part of a deposit once a tenant has moved out
• d.Keeping them as additional commission earned on the lease

Security deposits are trust funds. Section 40-57-136(C)(2) requires that deposits "remain in the trust account until the lease or rental transaction expires or is terminated, at which time undisputed trust funds must be disbursed pursuant to the contract" and "a full accounting must be made to the landlord or tenant as appropriate," and the Residential Landlord and Tenant Act governs what may lawfully be withheld. Depositing them in the broker's own savings is the commingling Section 40-57-136(B)(3) forbids and puts client money beyond any separate accounting. Treating them as extra commission is conversion, defined in Section 40-57-30(12) as a breach of trust and a crime. Refusing to return any part of a deposit is equally wrong, because the tenant's claim to the balance is not the broker's to extinguish; only lawful deductions may reduce what goes back.

Which South Carolina credential specifically covers licensees whose business is managing rental property?

• a.Property manager✓
• b.General contractor
• c.Home inspector
• d.Notary public

Section 40-57-30(29) defines a property manager as a supervised licensee who meets the educational requirements and passes the property manager examination in order to manage rental real estate for compensation, and Section 40-57-510 adds the property manager-in-charge above that; it is a track parallel to the associate-and-broker ladder. A general contractor license authorizes construction work, a different trade regulated under its own chapter with its own examination. A home inspector is credentialed to evaluate the physical condition of a property for a buyer, not to manage it for an owner. A notary public is commissioned to witness signatures and administer oaths, authority unrelated to leasing or managing property.

The South Carolina Fair Housing Law (Title 31, Chapter 21) primarily:

• a.Governs property tax exemptions
• b.Bars housing discrimination by protected class✓
• c.Requires all closings to use an attorney's escrow
• d.Sets maximum commission rates

The South Carolina Fair Housing Law prohibits discrimination in the sale, rental, and financing of housing on the basis of protected class, paralleling the federal Fair Housing Act, so licensees must comply when advertising, showing, and negotiating, and may not steer on that basis. Property tax exemptions such as the homestead exemption in Section 12-37-250 are a matter of tax administration and belong to a different body of law altogether. Commission rates are a matter for negotiation, not something a fair-housing statute fixes; setting them would be a price control rather than an antidiscrimination measure. The requirement that a South Carolina attorney supervise a residential closing comes from the Supreme Court's unauthorized-practice decisions, not from this chapter, which is concerned with who may be denied housing, and why.

A South Carolina owner is selling a house that has been rented out. Under the state's smoke detector law, what must the seller give the purchaser at closing?

• a.A certificate of inspection issued by the State Fire Marshal or a fire official
• b.Nothing; the purchaser's own inspection satisfies the statute
• c.An affidavit stating the smoke detectors are installed and functioning✓
• d.A receipt showing that new batteries were purchased within the past year

Section 5-25-1340 provides that "the seller shall provide to the purchaser at closing an affidavit stating that the smoke detectors have been installed and are functioning in accordance with this article," and giving that affidavit relieves the seller of further liability for detector performance after closing. Article 11 applies to one-family and two-family rental dwellings, including manufactured housing, which is why a rented house is covered. A battery receipt proves nothing about installation and is not mentioned anywhere in the article. The State Fire Marshal and local fire officials enforce the article under Section 5-25-1360, but the statute asks them to enforce, not to certify a sale. Leaving it to the purchaser's inspection is also wrong: Section 5-25-1340 lets the purchaser inspect the detectors before closing, yet that right sits alongside the seller's affidavit rather than replacing it.

Which owner qualifies for South Carolina's homestead exemption on the first fifty thousand dollars of the dwelling place's fair market value?

• a.Any owner who occupies the property as a legal residence
• b.A first-time buyer purchasing a primary residence
• c.A debtor protecting a residence from levy and sale
• d.A resident of the State for a year who has reached age sixty-five✓

Section 12-37-250(A)(1) exempts "the first fifty thousand dollars of the fair market value of the dwelling place" from county, municipal, school and special assessment real property taxes for a person who "has been a resident of this State for at least one year and has reached the age of sixty-five years on or before December thirty-first," or who is totally and permanently disabled, or who is legally blind, and who holds fee simple title or a life estate. Mere owner-occupancy is not enough; that qualifies a home only for the four percent legal residence assessment ratio in Section 12-43-220(c), which is a separate benefit. First-time buyer status appears nowhere in the section, which turns on age, disability or blindness rather than on how many homes the buyer has owned. The debtor answer names South Carolina’s other homestead exemption — Section 15-41-30(A)(1)(a) shields a debtor’s aggregate interest of up to fifty thousand dollars in a residence from attachment, levy and sale, capped at one hundred thousand dollars per living unit — which protects equity from creditors rather than reducing a tax bill. The tax exemption is claimed by written application to the county auditor before July sixteenth.

2024 Act No. 204 substituted two terms throughout South Carolina's real estate license law. Which pair of substitutions did it make?

• a."Salesperson" replaced "associate", and "associated licensee" replaced "supervised licensee"
• b."Broker-in-charge" replaced "broker", and "firm" replaced "real estate brokerage"
• c."Transaction broker" replaced "facilitator", and "client" replaced "customer"
• d."Associate" replaced "salesperson", and "supervised licensee" replaced "associated licensee"✓

The 2024 amendment notes record both changes: in Section 40-57-20 and Section 40-57-310 the Act "substituted 'associate' for 'salesperson'", and in Sections 40-57-136 and 40-57-350 it "substituted 'supervised licensees' for 'associated licensees'". The chapter now defines an associate at Section 40-57-30(5) and a supervised licensee at Section 40-57-30(39). Reversing the pair states the old vocabulary as though it were the new one, which is exactly the trap. Broker and broker-in-charge remain two separate license classifications under Section 40-57-110(A), so neither replaced the other. Transaction broker, client and customer were all already defined terms before 2024 and each still carries its own distinct meaning; facilitator is not a term this chapter has ever used.

An applicant taking the education-and-experience route to a South Carolina broker license must show how much active associate licensure?

• a.Ten years of active associate licensure within the past fifteen years
• b.Five years of active associate licensure within the past seven years✓
• c.Two years of active associate licensure within the past five years
• d.Three years of active associate licensure at any time in the past

Section 40-57-320(A)(2)(a) requires "completion of sixty hours of commission-approved real estate classroom instruction, to include completion of the thirty hour Unit III A Broker Management and of the thirty-hour Unit III B Brokerage Principles courses in advanced real estate principles and practices and five years active associate licensure within the past seven years." Two years within five is the pattern several other states use and is simply not South Carolina's figure. Three years with no recency window ignores the seven-year limit, which exists so that the experience is current rather than remote. Ten years within fifteen overstates the requirement by double. An applicant holding a juris doctor, a bachelor of law, or a real estate baccalaureate or master's degree may instead qualify under subitem (b) without the experience showing at all.

Under Section 40-57-345, added by 2025 Act No. 27, who may renew an expired South Carolina license and be exempt from continuing education?

• a.A licensee who completes a sixty-hour reinstatement course and pays the penalty fee
• b.A licensee who has been on inactive status for at least five years
• c.A licensee in good standing with twenty-five years of licensure who is sixty-five✓
• d.Any licensee whose license expired fewer than twenty-four months ago

Section 40-57-345 lets "an individual with an expired license who, at the time of expiration, was in good standing, has twenty-five years or more of licensure in South Carolina, and who is sixty-five years of age" apply to renew, pay the renewal fee, and be "exempt from continuing education requirements as provided by law." Expiry within twenty-four months matters for a different rule: Section 40-57-110(E) says a lapsed license is canceled if not reinstated by the last day of the twenty-fourth month, but that window carries no continuing education relief. A sixty-hour reinstatement course is invented; nothing in the section prescribes coursework, and prescribing it would contradict the exemption the section grants. Time spent on inactive status suspends the continuing education duty while the license is inactive under Section 40-57-340(B)(1)(b), but it does not renew an expired license.

A company wants to offer South Carolina real estate courses. Under Article 9 of Chapter 57, when must commission approval be obtained?

• a.Only if a student complains to the commission
• b.Before instruction begins✓
• c.Within thirty days after the first class is taught
• d.At the end of the first calendar year of operation

Section 40-57-920(A) requires providers and instructors to apply on prescribed forms with the applicable fee, and states flatly that "approval from the commission must be attained prior to commencement of instruction." Teaching first and applying within thirty days reverses that sequence and would leave students holding credit hours the commission never sanctioned. Waiting until the end of a year of operation compounds the same problem across a full year of enrollments. Treating approval as something triggered by a complaint confuses prior approval with after-the-fact discipline: the commission may under Section 40-57-920(B) deny, reprimand, fine, suspend or revoke a provider's approval when it finds violations, but that power operates on top of the prior-approval requirement rather than in place of it.

Which activity falls outside South Carolina's real estate license law under Section 40-57-240?

• a.An unlicensed owner selling an interest identical to his own✓
• b.An unlicensed assistant hosting an open house at a brokerage's listing
• c.A licensee referring a client to a broker in another state for a fee
• d.An unlicensed person marketing a neighbor's house in exchange for a share of the proceeds

Section 40-57-240(1) puts the chapter aside for "the sale, lease, or rental of real estate by an unlicensed owner of real estate who owns any interest in the real estate if the interest being sold, leased, or rented is identical to the owner's legal interest" — the owner is dealing with his own property, not acting for another. Section 40-57-135(K)(5) squarely forbids an unlicensed person from conducting or hosting an open house, so that conduct is inside the chapter and prohibited. A referral fee between licensees is licensed activity governed by Section 40-57-120 rather than exempt from the chapter. Marketing someone else's house for a share of the proceeds is the paradigm case the chapter reaches: Section 40-57-30(44) says advertising real estate owned by another with the expectation of compensation "falls under the definition of 'broker' and requires licensure." The section's other exemptions cover attorneys acting for a client-owner, government agencies, registered foresters where a land sale is incidental to timber, and court-appointed receivers and trustees.

A South Carolina license that is not renewed by its expiration date lapses. When is it canceled?

• a.Immediately, on the day the license expires
• b.On the last day of the sixth month after expiration
• c.Three years after the commission issues a notice of lapse
• d.The last day of the twenty-fourth month following expiration✓

Section 40-57-110(D) says a license not renewed before its expiration date lapses, and Section 40-57-110(E) adds that "a license that has lapsed and is not reinstated by the last day of the twenty-fourth month following expiration is canceled." Cancellation is not immediate on expiry: the intervening lapsed period is precisely when reinstatement is still possible, although Section 40-57-110(D) warns that practicing during it may be sanctioned as unlicensed practice. Six months is not a deadline this section uses; the six-month figure in the chapter belongs to Section 40-57-135(C)(4), which lets a supervised licensee act as broker-in-charge for up to six months after the death or medical incapacity of the previous one. A three-year clock likewise belongs elsewhere — Section 40-57-730(A) bars reapplication for three years after a revocation — and cancellation under Section 40-57-110(E) runs from expiration, not from any notice the commission sends.

A South Carolina broker-in-charge moves the office and changes its telephone number. What does Section 40-57-135(A) require?

• a.Notify the commission by mail within ten days of the change✓
• b.Notify the commission by mail within thirty days of the change
• c.Report the change on the next biennial license renewal application
• d.Publish the change in a newspaper of general circulation

The last of the eight duties listed in Section 40-57-135(A) is to "notify the commission by mail within ten days of any change of office name, address, email address, or telephone number." Thirty days is the deadline attached to a different obligation — Section 40-57-310(3) gives a licensee thirty days to update personal contact information on file — and borrowing it here misses the shorter office-level clock. Waiting for the biennial renewal would leave the commission's register wrong for up to two years, which defeats Section 40-57-135(C)(1), the requirement that the office be accessible to the public, investigators and inspectors during reasonable business hours. Newspaper publication is a device used for legal notices in other bodies of law; this chapter asks for notice to the commission, not to the general public.

How long must a South Carolina broker-in-charge keep a copy of each lease, sales contract, listing agreement and property management agreement?

• a.A minimum of seven years
• b.Until the transaction closes
• c.A minimum of five years✓
• d.A minimum of three years

Section 40-57-135(D)(1) requires the broker-in-charge or property manager-in-charge "for a minimum of five years" to maintain and furnish on request a written copy of each lease, contract of sale and addenda, listing contract or buyer agency agreement, transaction broker agreement, option contract, property management agreement and residential property disclosure form; Section 40-57-136(F)(1) sets the same five-year floor for trust account records. Three years is shorter than the statute allows and would destroy records the commission can still demand. Seven years is a tax-records habit rather than a license-law rule, and while keeping documents longer is harmless, it is not what is required. Stopping at closing is the worst answer of the four, because complaints and investigations almost always arrive after the transaction has ended. Section 40-57-135(D)(2) permits electronic storage provided a backup copy is kept in a separate, off-site location.

A seller rejects an offer outright without countering. What must the licensee deliver to the offeror, and how soon?

• a.Nothing in writing, so long as the offer was presented to the seller
• b.A commission-promulgated offer rejection form, within forty-eight hours✓
• c.A written explanation of the seller's reasons, within forty-eight hours
• d.A commission-promulgated offer rejection form, within ten business days

Section 40-57-135(I)(5) provides that if an offer is rejected without counter, "an offer rejection form, promulgated by the commission, signed by the licensee affirming presentation of the offer must be provided to the offeror by the licensee within forty-eight hours of rejection, whether the agent of the buyer, the seller, or if acting as a transaction broker." The form affirms that the offer was presented; it does not report the seller's reasoning, and demanding reasons would cut against the confidentiality a seller's agent owes about motivation. Ten business days is far outside the statute and would leave a buyer guessing for two weeks. Doing nothing in writing is the practice the subsection was enacted to end, and the duty attaches whichever side the licensee is on, including a transaction broker representing neither.

Which residential service agreement running longer than one year is unenforceable and treated as made in bad faith?

• a.An option or right of first refusal to purchase the residential real estate
• b.A maintenance agreement entered into by a homeowners association
• c.One that binds future owners or heirs of the residential real estate✓
• d.A home warranty covering the cost of maintaining a major housing system

Section 40-57-135(I)(9) makes an agreement about residential real estate lasting more than a year unenforceable, and "considered to be done in bad faith," if it purports to run with the land or bind future owners or heirs, to allow assignment of the right to provide service without notice to and consent of the owner, or to create a lien, encumbrance or other security interest or be recorded; a licensee involved in one faces discipline. Section 40-57-135(I)(10) then carves out the other three. A home warranty covering the maintenance of a major housing system such as plumbing or electrical wiring for a fixed period is expressly preserved. So is an option or right of refusal to purchase the property. So is a maintenance or repair agreement entered into by a homeowners association, along with insurance contracts, mortgage commitments, Uniform Commercial Code security agreements and regulated utility services.

A South Carolina property management agreement may contain an automatic renewal clause only if it also lets either party cancel:

• a.For cause only, with sixty days' notice at any time during the term
• b.At will and without notice once the property has been vacant for one full month
• c.Only by mutual written agreement signed by both parties and notarized
• d.For any cause or no cause on thirty days' notice✓

Section 40-57-135(J)(4) requires that a management agreement "may not contain an automatic renewal clause or provision unless the management agreement also contains a clause or provision that allows either party to cancel the management agreement for any cause or no cause with thirty days' notice after the original definite expiration date." Limiting cancellation to cause, on sixty days, would leave an owner locked into a renewed term for exactly the reason the subsection exists. A vacancy-triggered walkaway is not in the statute and would let a manager abandon a property at its least profitable moment. Requiring mutual agreement to escape gives each side a veto and so is no exit at all. Section 40-57-135(J) also fixes the agreement's other minimums: the parties' names and signatures, the property identification, the method of compensation, terms of tenant rental arrangements, and an underlined capitalized first-page clause if future lease-renewal compensation is included.

Which task may an unlicensed assistant working under a South Carolina broker-in-charge lawfully perform?

• a.Explaining the buyer agency agreement to a prospect
• b.Showing a vacant unit in a multifamily building✓
• c.Hosting an open house at one of the firm's listings
• d.Approving a rental application and settling the lease terms

Section 40-57-135(K)(6) bars an unlicensed person from showing "real property for sale other than vacant units in a multifamily building," so vacant multifamily units are the one showing the list leaves open. Hosting an open house is prohibited outright by item (5), which also covers managing an on-site sales or leasing office. Approving applications or leases, or settling or arranging lease terms, is prohibited by item (3), and item (2) separately forbids varying the rental price or terms the owner or licensee has set. Discussing, negotiating or explaining a contract, listing agreement, buyer agency agreement or lease is prohibited by item (1). The rest of the list bars indicating managerial authority, answering questions about listings, title, financing or closing beyond publicly available information, being paid solely on real estate activity, negotiating compensation on a licensee's behalf, and any other activity requiring a license.

Since 15 May 2025, what must a South Carolina licensee's advertisement of another person's property include?

• a.A statement that the commission has approved the wording of the advertisement
• b.The full name of the brokerage firm employing and supervising the licensee✓
• c.The licensee's own license number and the date the license was issued
• d.The seller's name and the price the seller originally paid for the property

Section 40-57-135(E)(2)(a) requires a licensee advertising real estate services or marketing another person's property in any medium clearly to "identify the full name of the real estate brokerage firm with which the licensee is employed and supervised in accordance with regulations"; the editor's note to 2024 Act No. 204 sets that subsection running twelve months after ratification, which is 15 May 2025. For internet or other electronic media, subitem (b) allows the requirement to be met by a link from the advertisement to the brokerage or property management company's homepage, and Section 40-57-135(E)(3) adds that a firm trading under a franchise name must reveal the franchisee's identity. A license number and issue date identify the individual, not the firm, and the subsection is aimed at telling consumers which brokerage stands behind the advertisement. The seller's name and purchase history are confidential transaction details, not advertising disclosures. The commission approves education courses and providers under Article 9, but it does not pre-approve advertising copy.

A South Carolina supervised licensee accepts an earnest money check from a buyer. When must it reach the broker-in-charge?

• a.No later than the following business day✓
• b.No later than the third business day
• c.No later than forty-eight hours, weekends included
• d.By the end of the calendar week

Section 40-57-136(B)(4) requires that trust funds a licensee receives in a transaction he is engaged in for the broker-in-charge or property manager-in-charge "must be delivered to the broker-in-charge or property manager-in-charge no later than the following business day." A third-business-day allowance would leave client money in a licensee's hands for most of a week with no trust-account record. A flat forty-eight-hour clock that counts weekends confuses this handover rule with the separate deposit deadlines in subsections (C) and (D), which do run in forty-eight hours but expressly exclude Saturday, Sunday and bank holidays. Waiting until the end of the calendar week has no basis in the section at all and would make the timing depend on which day the check arrived. Section 40-57-136(H) adds that where trust funds are held outside the firm the licensee still has to see them delivered on time to the agent named in the contract.

A tenant's check for a residential lease and a buyer's check in a sale both reach the broker-in-charge. Each must be deposited within forty-eight hours of what event?

• a.Receipt of the check by the licensee, in the rental and in the sale alike
• b.Written acceptance for the rental, the lease signing for the sale
• c.Move-in in the rental and closing in the sale
• d.Lease signing for the rental, written acceptance for the sale✓

The two clocks are keyed to different events. Section 40-57-136(C)(1)(a)(ii) says rental and lease checks "must be deposited within forty-eight hours after a lease or rental agreement is signed by the parties," while Section 40-57-136(D)(1)(a)(ii) says sales and exchange checks "must be deposited within forty-eight hours after written acceptance of an offer by the parties" — Saturdays, Sundays and bank holidays excluded from both. Receipt is the trigger only for cash or certified funds, which must be deposited within forty-eight hours of receipt under the (a)(i) of each subsection, so applying it to checks conflates the two payment forms. Swapping the two triggers is the classic error and is what the exam is testing. Move-in and closing come far too late: subsection (D)(2) treats closing as an occasion for disbursement, not for deposit, and money is meant to be in trust long before then.

What must a South Carolina broker-in-charge produce each month for a trust account that saw a deposit or disbursement?

• a.A copy of every canceled check, mailed to the commission's office
• b.An independent audit performed by a certified public accountant licensed in the State
• c.A worksheet comparing the bank balance, journal balance and ledger total✓
• d.A signed statement from the depository confirming the account's trust designation

Section 40-57-136(F)(2)(f) requires "a monthly reconciliation of each separate account except when no deposit or disbursement is made during that month," and specifies that "the reconciliation must include a written worksheet comparing the reconciled bank balance with the journal balance and with the ledger total to ensure agreement." A bank letter about the account's title proves only how the account is named, which Section 40-57-136(A)(1) already fixes at the moment the account is opened. Canceled checks are among the records the commission may demand under Section 40-57-136(F)(1), but they are held for five years and furnished on request, not mailed in monthly. An outside audit by a certified public accountant is a good practice that no provision of the chapter requires, and substituting one would still leave the monthly three-way comparison undone.

Buyer and seller dispute who gets the earnest money and the contract does not settle it. Which route does Section 40-57-136(E) NOT authorize?

• a.The broker-in-charge deciding entitlement and disbursing accordingly✓
• b.A written agreement separate from the contract, signed by all
• c.An interpleader action filed in a court of competent jurisdiction
• d.Voluntary mediation between the parties to the dispute

Section 40-57-136(E) says that where entitlement is disputed and reasonable interpretation of the contract does not resolve it, "the deposit must be held in the trust account until the dispute is resolved by" one of four routes: a written agreement directing disposition, signed by all parties claiming an interest and separate from the contract that put the money in trust; an interpleader action; an order of a court of competent jurisdiction; or voluntary mediation. The broker deciding the question personally is the one thing the subsection forecloses, and Section 40-57-136(B)(5) treats disbursing contrary to the contract as a demonstration of incompetence to act as broker-in-charge. The written agreement, the interpleader action and voluntary mediation are each squarely on the statutory list, which is why holding the funds — not choosing a winner — is the broker's job until one of them produces an answer.

South Carolina prohibits wholesaling. Which activity remains permitted?

• a.Offering to assign a contractual right to purchase residential real estate✓
• b.Marketing the underlying real property for sale before taking legal ownership of it
• c.Advertising another owner's property for compensation without a license
• d.Representing a wholesaler who is reselling a house he has contracted to buy

The carve-out is the tested point. Section 40-57-30(44) defines wholesaling as "having a contractual interest in purchasing residential real estate from a property owner, then marketing the property for sale to a different buyer prior to taking legal ownership," and then says wholesaling "does not refer to the assigning or offering to assign a contractual right to purchase residential real estate." Section 40-57-135(E)(1) makes the same distinction operational: marketing a contractual position to acquire property, without implying or purporting to sell the underlying real property, is permissible. Marketing the underlying property before owning it is the prohibited conduct itself. Advertising another owner's property for compensation without a license falls under the definition of broker in the same subsection and requires licensure. Representing or assisting a wholesaler is barred too: Sections 40-57-350(A) and 40-57-350(L)(5) prohibit a firm and its subagents from "engaging in, representing others in, or assisting others in the practice of wholesaling."

Under Section 40-57-725, what is the maximum administrative penalty for a third violation of the same provision within five years?

• a.Five hundred dollars
• b.One thousand dollars
• c.Twenty-five thousand dollars
• d.Ten thousand dollars✓

Section 40-57-725(C) sets a three-step ladder: not more than five hundred dollars for a first violation of a particular provision, not more than one thousand dollars for the second of two violations of the same or substantially similar provision within five years, and "for the third or subsequent violation of the same or substantially similar provision in a five-year period, not more than a ten-thousand-dollar penalty." Five hundred dollars is the first rung and one thousand the second, so both understate a third offense by an order of magnitude. Twenty-five thousand dollars is above any figure in the section. Two further details travel with this rule: subsection (D) gives ten days from receipt of the citation to appeal to the commission and, absent an appeal, thirty days to pay once the citation becomes a final order; and subsection (A) lets the department assess these penalties "against any individual or entity, including unlicensed individuals," so a citation is not limited to licensees.

A South Carolina licensee uses an artificial intelligence tool to draft a listing description that misstates the property's square footage. Who is responsible?

• a.No one, because Chapter 57 does not address automated tools
• b.The multiple listing service that published the description
• c.The licensee, as if the violation were committed directly✓
• d.The software vendor that trained the artificial intelligence model

Section 40-57-820 states that a licensee "is responsible for any and all work product produced by him or with the assistance of artificial intelligence, machine learning, or similar programs," and that a violation committed through such programs "will be treated as if the violation was committed directly by the licensee." The vendor is outside the chapter entirely; Chapter 57 regulates licensees, and the statute deliberately puts the risk on the person who chose to use the tool and published its output. The claim that the chapter is silent was true before 2024 Act No. 204 added Section 40-57-820, and it is the reason the section was written. The listing service distributes what the licensee submits and has no license-law duty to verify the measurements; the misstatement remains the licensee's, alongside the duty under Section 40-57-350(G)(1) to treat all parties honestly and not knowingly give false information about the property.

Section 40-57-350(A) lists the brokerage relationships a South Carolina firm may establish. Which is NOT on that list?

• a.Disclosed dual agency with the written consent of both clients
• b.Designated agency assigned through company policy
• c.Transaction brokerage providing customer services
• d.Undisclosed subagency created by cooperation✓

Section 40-57-350(A) closes the list: "the following are the permissible brokerage relationships a real estate brokerage firm may establish," naming seller agency, buyer agency, disclosed dual agency, designated agency and transaction brokerage. Disclosed dual agency, designated agency and transaction brokerage are each on it and each carries its own consent and disclosure machinery in subsections (I), (J) and (L). Subagency is not a relationship a firm establishes with a party under this list; Section 40-57-30(37) uses the word only to describe a supervised licensee's position under his own firm, and Section 40-57-370(E) forbids any agency arising by implication, which is exactly how undisclosed subagency by cooperation would have to arise. Because the list is closed, a firm cannot invent a sixth relationship, and anything that is not one of the five leaves the firm dealing with a customer.