Sample practice questions

A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.

1. 1. Property Ownership

   A commercial tenant bolts custom display shelving to the walls to run a retail store. Absent any agreement to the contrary, what is the usual character of that shelving?

   • a.A permanent fixture that automatically belongs to the landlord
   • b.Real property that must be conveyed with the building
   • c.A trade fixture the tenant may remove before the lease ends
   • d.An easement appurtenant to the leased space

   Answer: c

   Explanation: Items a commercial tenant installs to conduct business are trade fixtures. Even though they are attached, the law lets the tenant remove them before the lease ends (repairing any damage), because the tenant's intent was to use them in the business, not to improve the landlord's property permanently. This is an exception to the general rule that attached items become part of the realty. It is not an easement, which is a right to use another's land, not an object.

2. 2. Contracts

   An in-home caregiver persuades a frail, dependent client to sign a sale contract on terms far below market value. The resulting contract is most likely:

   • a.Valid, since the client signed it voluntarily
   • b.Void, because a caregiver may never buy property
   • c.Voidable by the client for undue influence
   • d.Unenforceable only if the price was fraudulent

   Answer: c

   Explanation: Undue influence arises when someone in a position of trust or dominance overcomes the free will of a dependent person, and the resulting contract is voidable by the influenced party. The client had legal capacity, so the agreement is not void; capacity and free assent are separate requirements. Nothing makes a caregiver categorically unable to buy, though the relationship shifts the burden of showing the bargain was fair. Calling the signature voluntary misses the point, since dependence rather than force is what taints assent. A below-market price by itself is not fraud, so limiting relief to fraudulent pricing looks at the wrong defect.

3. 3. Contracts

   A buyer and seller sign the same purchase agreement electronically, in separate counterparts, from different states. Under the federal E-SIGN Act and state UETA, the contract is:

   • a.Invalid unless both signatures appear on one page
   • b.Valid only for commercial, not residential, deals
   • c.Valid only if a notary witnesses signing
   • d.Enforceable despite the electronic signatures

   Answer: d

   Explanation: The federal E-SIGN Act and state adoptions of UETA give electronic signatures and records the same legal effect as ink on paper when the parties have agreed to transact electronically, and a contract may be signed in counterparts that together form one agreement. So a single physical page bearing both signatures is unnecessary, and no notary is required for enforceability of the contract itself. These laws are not confined to commercial deals; residential contracts are routinely signed this way. Brokers should still document consent to electronic delivery and retain a complete audit trail of who signed what and when.

4. 4. General Principles of Agency

   Two visitors at an open house begin telling the licensee holding it open about their finances and how motivated they are to move quickly. What does the principle of agency disclosure require?

   • a.Say nothing about the relationship until the visitors ask who the licensee represents
   • b.Disclose the relationship at the closing table in writing
   • c.Disclose in writing whom the licensee represents before confusion arises
   • d.Disclose the relationship only after an offer has been prepared and signed

   Answer: c

   Explanation: Agency disclosure exists to stop a consumer from confiding in someone who works for the other side, so the licensee should identify in writing whom the firm represents at or before the point where confusion could occur, which is right now. The specific timing rule and the form vary by state, but the principle does not. Waiting to be asked leaves the visitors relying on an agent of the seller. Disclosure at closing comes long after the harm. Waiting until an offer is drafted is equally late, since the confidences have already been shared.

5. 5. Financing

   A borrower misses several monthly payments, and the lender notifies her that the entire unpaid balance is now immediately due. Which clause in the loan documents permits that demand?

   • a.The defeasance clause, which cancels the lien on payoff
   • b.The prepayment clause, which penalizes early payoff
   • c.The alienation clause, triggered by a transfer of title
   • d.The acceleration clause, which makes the whole balance due now

   Answer: d

   Explanation: Acceleration is the lender's contractual right to call the entire remaining balance due upon a default such as nonpayment, and without it the lender could sue only for the missed installments. Acceleration is also the step that must occur before foreclosure of the whole debt. Defeasance works in the opposite direction, defeating the lien when the loan is satisfied. An alienation or due-on-sale clause is triggered by a transfer of the property, not by missed payments. A prepayment clause addresses paying early, which is the reverse of this borrower's problem.

6. 6. Valuation and Market Analysis

   Three adjoining lots are worth $180,000 each standing alone. A broker assembles all three for a developer, and the combined site is then worth $690,000. What is the plottage increment?

   • a.$150,000
   • b.$50,000
   • c.$540,000
   • d.$690,000

   Answer: a

   Explanation: Assemblage is the act of combining adjoining parcels under one ownership; plottage is the added value that combination creates. Compute the separate total first: 3 x $180,000 = $540,000. Then subtract it from the assembled value: $690,000 - $540,000 = $150,000, which is the plottage increment. The $540,000 answer is the sum of the individual lot values, the starting point rather than the increment. The $690,000 answer is the whole assembled value, not the gain. The $50,000 answer divides the increment across the three lots ($150,000 / 3) and reports a per-lot share as if it were the total.

7. 7. Property Ownership

   A homeowner in a platted subdivision paints the house a color the recorded CC&Rs prohibit. Who can enforce the restriction, and by what means?

   • a.The city's code enforcement office, by issuing citations
   • b.Other owners or the association, by suing for an injunction
   • c.The county recorder, by rejecting future filings for the lot
   • d.No one, because private color rules are unenforceable

   Answer: b

   Explanation: CC&Rs and other private deed restrictions run with the land and are enforced privately: another lot owner or the homeowners association may sue, usually seeking an injunction ordering compliance, and a court can award damages as well. Government code enforcement polices public controls such as zoning and building codes, not private covenants, so a city citation is the wrong instrument. The recorder's office merely records documents and holds no enforcement power. Private restrictions are enforceable encumbrances on title, although a court may decline to enforce one that has been widely abandoned or that is itself illegal, such as a racial covenant.

8. 8. Property Management

   A firm's written rental policy automatically rejects any applicant who has any criminal record of any kind. Why does this policy create fair housing exposure?

   • a.Criminal history is itself a protected class under federal law
   • b.Federal law forbids any consideration of an applicant's record
   • c.Applicants may lawfully be screened only on their credit score
   • d.A blanket ban can have a disparate impact on protected classes

   Answer: d

   Explanation: Criminal history is not a protected class, and housing providers may consider it. The problem is discriminatory effect: a policy that is neutral on its face can still violate the Fair Housing Act if it disproportionately excludes members of protected classes and does not serve a substantial, legitimate interest that could be met by a less discriminatory approach. A blanket lifetime ban, especially one counting arrests that never led to conviction, is the classic example. The defensible practice is an individualized assessment of the nature, severity, and recency of the conduct. Federal law does allow exclusion based on conviction for the manufacture or distribution of controlled substances, and screening is not limited to credit scores.

9. 9. Transfer of Title

   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

   Answer: b

   Explanation: 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.

10. 10. Utah Licensee Practice

    A Utah seller wants to change two terms of a buyer's offer. Rule R162-2f-401b tells the licensee that the counteroffer may not be made by:

    • a.Striking out or writing over the language of the contract
    • b.Attaching a page of new terms that both parties then sign
    • c.Preparing a separate addendum that the parties then initial
    • d.Rejecting the offer outright and issuing a fresh written offer

    Answer: a

    Explanation: Rule R162-2f-401b(1)(p) forbids a licensee to "make a counteroffer by striking out, whiting out, substituting new language, or otherwise altering: (i) the boilerplate provisions of the Real Estate Purchase Contract; or (ii) language that has been inserted to complete the blanks of the Real Estate Purchase Contract." Rule R162-2f-401a(18) gives the required method: "use an approved addendum form to make a counteroffer or any other modification to a contract." The point is that a marked-up contract leaves no clean record of what each party actually agreed to, while an addendum is a separate signed document. Rule R162-2f-401f(1)(d) identifies the approved Addendum to Real Estate Purchase Contract among the standard forms.