Louisiana Real Estate Salesperson Exam — All Questions
14 questions
Which body administers the real estate license law in Louisiana?
- a.The Louisiana Department of Revenue
- b.The Louisiana Association of Realtors
- c.The Louisiana Real Estate Commission✓
- d.The Louisiana Public Service Commission
The Louisiana Real Estate Commission (LREC) administers and enforces the Louisiana Real Estate License Law found in Title 37 of the Louisiana Revised Statutes. It licenses salespersons and brokers, approves education, and imposes discipline.
In Louisiana, a licensed real estate salesperson must:
- a.Be sponsored by and work under a licensed Louisiana broker✓
- b.Operate independently once licensed
- c.Hold a separate notary commission
- d.Register directly with each parish clerk
A Louisiana salesperson must be sponsored by and licensed under a Louisiana broker. The sponsoring broker is responsible for the salesperson's activity and for the handling of client funds; a salesperson cannot practice independently.
Louisiana is notable among states for requiring which of the following of its active real estate licensees?
- a.Membership in the National Association of Realtors
- b.Errors and omissions (E&O) insurance coverage as a condition of active licensure✓
- c.A four-year college degree
- d.A separate appraisal license
Louisiana requires all active real estate licensees to carry errors and omissions (E&O) insurance. The Louisiana Real Estate Commission makes a group policy available, but licensees may obtain equivalent coverage independently; active licensure is contingent on maintaining this coverage.
Before appointment to the Louisiana Real Estate Commission, what does Louisiana law require of a member?
- a.Five years of continuous residency in the parish he will represent
- b.Active engagement as a real estate broker for at least five years✓
- c.A Louisiana appraiser certification in addition to a broker license
- d.Completion of the commission's forty-five-hour post-license course
Members of the commission must be citizens and qualified electors of this state, and each must have actively engaged in the real estate business as a broker for at least five years next preceding the date of appointment. Each appointment runs four years and no commissioner may serve more than two four-year terms consecutively. Cite: La. R.S. 37:1432(B) and (C).
What is the largest civil penalty the Louisiana Real Estate Commission itself may impose on a licensee for a violation of the license law?
- a.One thousand dollars
- b.Ten thousand dollars
- c.Twenty-five thousand dollars
- d.Five thousand dollars✓
The commission may censure a licensee, suspend or revoke a license, impose extra continuing education, and levy fines or civil penalties not to exceed five thousand dollars. That is an administrative penalty; a separate criminal penalty of a fine up to two thousand dollars, imprisonment up to five years, or both, applies to violations prosecuted in court. Cite: La. R.S. 37:1455(A); La. R.S. 37:1458.
A Louisiana seller refuses to pay the fee he promised an unlicensed person who found his buyer. What does the license law say about suing for that fee?
- a.No suit for the compensation may be brought in any Louisiana court✓
- b.He may sue if the seller's promise to pay the fee was in writing
- c.He may sue only in the Nineteenth Judicial District Court
- d.He may sue if a licensed broker afterward ratifies the transaction
No action or suit may be instituted, and no recovery had, in any court of this state for compensation for an act whose performance requires a license unless the person was duly licensed before offering to perform it. A person who engaged in real estate activity without a license has no right to receive compensation, and the commission may order any fees collected returned. Cite: La. R.S. 37:1445; La. R.S. 37:1459(D).
Two Louisiana licensees disagree over which of them earned the commission on a closed sale. What will the Louisiana Real Estate Commission do?
- a.Appoint a hearing officer to divide the commission between them
- b.Suspend both licenses until the dispute has been settled
- c.Nothing, because it is barred from entering that dispute✓
- d.Order the funds deposited into the registry of the district court
The license law provides that the commission shall not become involved in disputes between licensees or registrants in any matter regarding entitlement to or payment of commissions, fees, or compensation involving the sale or lease of real estate. The rules repeat this for broker-licensee disputes and for team or group disputes, which must be settled by the parties or by a court of competent jurisdiction. Cite: La. R.S. 37:1453(D); LAC 46:LXVII.1703(A) and 1911(A).
Payments from the Louisiana Real Estate Recovery Fund are capped at which amounts?
- a.Twenty thousand dollars per transaction and fifty thousand dollars per licensee✓
- b.Ten thousand dollars per transaction and twenty-five thousand per licensee
- c.Twenty thousand dollars per transaction and twenty thousand per licensee
- d.Fifty thousand dollars per transaction and one hundred thousand per licensee
A claimant may be paid the unsatisfied portion of his judgment or twenty thousand dollars, whichever is less, and claims arising out of the same transaction are limited in the aggregate to twenty thousand dollars regardless of how many claimants or parcels are involved. Claims based on judgments against any one broker or salesperson are capped in the aggregate at fifty thousand dollars, and only actual damages qualify, never attorney fees, court costs, or punitive damages. Cite: La. R.S. 37:1463(A), (C), and (D).
What happens to a Louisiana licensee's license when the Real Estate Recovery Fund pays a claim on a judgment against him?
- a.It is suspended for a year
- b.It is automatically revoked✓
- c.It is moved to inactive status until the fund is repaid
- d.It is unaffected, but he must double his errors and omissions limits
Upon payment of any amount from the recovery fund in settlement of a claim or in satisfaction of a judgment against a broker or salesperson, that person's license is automatically revoked, and a discharge in bankruptcy does not relieve him of that penalty. The commission is subrogated to the claimant's rights in the judgment to the extent of what it paid. Cite: La. R.S. 37:1463(B) and (G).
A Louisiana seller offers a broker everything above $250,000 as the broker's fee on the sale of her house. Under the license law this arrangement is:
- a.permitted if the seller initials the arrangement on the listing
- b.permitted for commercial property but never for residential
- c.permitted if the broker's total fee is disclosed before closing
- d.unlawful for residential property and for land✓
That is a net listing agreement: one that lets the broker take as his commission the difference between the higher price obtained and a stipulated net price agreed upon for the seller. Louisiana makes it unlawful for a broker to enter into, advise, or encourage a net listing for the sale of residential real estate property or land. Cite: La. R.S. 37:1448.3; La. R.S. 37:1431(19).
A Louisiana buyer learns a homicide once occurred in the house she is under contract on. Was that a material defect the seller or licensee had to disclose?
- a.No, Louisiana declares such an impact not to be a material fact✓
- b.Yes, it belongs on the property disclosure document
- c.Yes, but only for a death within the preceding three years
- d.Only if the buyer had asked the question in writing
Under Louisiana's psychologically impacted property statute, the fact or suspicion that a property was the site of a homicide, another felony, or a suicide, or that an occupant had HIV or AIDS, is not a material fact or material defect regarding the condition of real estate that must be disclosed. No cause of action arises against an owner or his agent for failing to disclose it. Cite: La. R.S. 37:1468.
Which purchase agreement must a Louisiana licensee use when writing an offer on a three-unit residential building?
- a.Any purchase agreement approved in writing by the sponsoring broker
- b.The standard contract published by the local Realtor association
- c.The Residential Agreement to Buy or Sell prescribed by the commission✓
- d.A form drafted by a Louisiana attorney for that particular sale
A licensee representing either the buyer or the seller of residential real property must complete the purchase agreement form prescribed by the Louisiana Real Estate Commission, the Residential Agreement to Buy or Sell, and no person may alter that form, although addenda and amendments may be used. Residential real property for this purpose means one to four dwelling units. Cite: La. R.S. 37:1449.1(A) and (C); LAC 46:LXVII.3900.
A Louisiana broker asks a sponsored salesperson to sign a two-year non-compete. What does the license law require for that clause to be enforceable?
- a.Registration of the agreement with the commission within five days
- b.A separate payment to the licensee in exchange for the covenant
- c.A right to rescind it until midnight of the third business day✓
- d.Approval by the Nineteenth Judicial District Court before signing
A broker-licensee non-compete of up to two years is unenforceable and an absolute nullity unless the licensee has the right to rescind it until midnight of the third business day following execution or delivery of the agreement, whichever is later. The clause must also be prominently displayed in bold-faced block lettering of not less than ten-point type. Cite: La. R.S. 37:1448.1(A).
A person contracts to buy a Louisiana house intending to assign the contract for a profit rather than close on it. What right must the seller be given?
- a.The right to a second appraisal paid for by the wholesaler
- b.The right to cancel without penalty for at least five calendar days✓
- c.The right to demand the assignment price before the closing
- d.The right to void the contract within seventy-two hours of signing
Louisiana's wholesaling law requires the wholesaler to disclose in writing, before each related contract is executed, that it intends to assign or market its contractual rights for a higher price, that the seller should seek legal advice, and that the seller may cancel any related contract for any reason and without penalty for at least five calendar days. A cancellation notice in prescribed language must sit next to the seller's signature, and the commission publishes the mandatory form. Cite: La. R.S. 37:1448.5(A) and (C), enacted by Acts 2026, No. 807, effective August 1, 2026.