New Jersey Real Estate Salesperson Exam — All Questions

Under the federal Fair Housing Act, which of the following is a protected class?

• a.Occupation
• b.Level of education
• c.Religion✓
• d.Source of a person's income

The federal Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, and disability (handicap). Religion is therefore a protected class. Occupation, education level, and source of income are not protected under the federal act, although some state or local laws add extra protected categories such as source of income.

An agent tells prospective buyers that they would be 'more comfortable' in a different neighborhood based on the racial makeup of the area, steering them away from certain homes. This illegal practice is called:

• a.Blockbusting
• b.Redlining
• c.Puffing
• d.Steering✓

Steering is directing buyers toward or away from particular neighborhoods based on a protected characteristic such as race, and it violates fair housing law. Blockbusting is inducing owners to sell by suggesting that people of a particular protected class are moving in. Redlining is refusing to lend or insure in certain areas. Puffing is legal, non-factual sales exaggeration and is unrelated to discrimination.

Client funds such as earnest money deposits that a broker holds on behalf of others must be kept in a:

• a.Broker's general operating account
• b.Separate trust or escrow account✓
• c.Personal savings account of the agent
• d.Petty cash fund

Money belonging to others, such as earnest money, must be held in a separate trust (escrow) account to keep it distinct from the broker's own funds. Mixing client money with the broker's business or personal funds is commingling, and using it for the broker's own purposes is conversion, both of which are serious license-law violations. A general operating, personal, or petty cash account would all constitute commingling.

The federal Fair Housing Act of 1968, as amended, protects how many classes?

• a.three
• b.seven✓
• c.five
• d.ten

The federal Fair Housing Act protects seven classes: race, color, religion, national origin, sex, familial status, and disability (handicap). Race and color trace to the 1866 and 1968 acts, sex was added in 1974, and familial status and disability in 1988.

'Familial status' under the federal Fair Housing Act protects:

• a.senior citizens only
• b.married couples only
• c.households with children under 18 and pregnant persons✓
• d.people classified by marital status

Familial status protects families with one or more children under 18, pregnant women, and those securing custody of a child, guarding against discrimination such as refusing to rent to families with kids. It is broader than marital status and is not limited to seniors.

Under fair housing law, a housing provider generally must, for a tenant with a disability:

• a.pay for all of the tenant's medical costs
• b.charge a higher security deposit for a disability
• c.refuse to rent to any tenant with a disability
• d.allow reasonable modifications and permit assistance animals✓

Housing providers must allow reasonable accommodations in rules (such as permitting an assistance animal despite a no-pets policy) and permit reasonable modifications; a no-pets rule cannot bar assistance animals. They may not charge extra deposits or deny housing based on disability.

Convincing owners to sell by claiming that members of a protected class are moving into the neighborhood is the illegal practice of:

• a.blockbusting✓
• b.redlining
• c.steering
• d.puffing

Blockbusting (panic selling) induces owners to sell by exploiting fears about protected-class neighbors moving in. Steering directs buyers by protected class, redlining denies lending in areas, and puffing is lawful sales exaggeration.

A lender's refusal to make loans in certain neighborhoods based on their racial composition is:

• a.steering
• b.redlining✓
• c.a lawful underwriting practice
• d.blockbusting

Redlining is denying or restricting loans or insurance in specific areas based on race or another protected characteristic rather than the applicant's qualifications, and it is illegal. It is not a legitimate underwriting practice.

Which situation may qualify for a limited exemption under the federal Fair Housing Act?

• a.owner-occupied buildings of four or fewer units in some circumstances✓
• b.any home the owner simply wishes to sell
• c.homes sold above a set price threshold
• d.all high-end luxury properties

Limited exemptions exist (for example, owner-occupied buildings of four or fewer units, or a single-family home sold by the owner without a broker or discriminatory advertising), but they never permit discriminatory advertising and do not apply to race under the 1866 Act. Price and luxury are irrelevant.

Even where a transaction might qualify for an exemption, the Fair Housing Act still prohibits:

• a.requiring a routine credit check of applicants
• b.charging a fair market rent for the unit
• c.using a licensed broker for the transaction
• d.publishing any advertisement that states a discriminatory preference✓

Discriminatory advertising that indicates a preference or limitation based on a protected class is always prohibited, regardless of any transactional exemption. Ordinary business practices like credit checks and market rent are permitted.

The Americans with Disabilities Act (ADA) primarily requires:

• a.that every private home be made wheelchair accessible
• b.that commercial facilities and public accommodations be accessible to people with disabilities✓
• c.that lenders offer lower interest rates to disabled buyers
• d.that sellers disclose their own personal health status

The ADA requires that public accommodations and commercial facilities remove barriers and provide accessibility, such as ramps and accessible restrooms. It focuses on commercial and public spaces rather than mandating accessibility in every private residence.

Two competing brokerages that agree to charge the same commission rate have committed:

• a.illegal price fixing✓
• b.a legal tie-in arrangement
• c.lawful cooperation between firms
• d.a permissible market allocation

Price fixing - competitors agreeing on prices or commission rates - is a per se violation of antitrust law; commission rates must be set independently and are negotiable between a broker and client. Market allocation and tie-ins are also illegal, not lawful.

When competing firms agree to divide territories or customers among themselves, they have engaged in:

• a.a permitted form of subagency
• b.a legal referral network
• c.an illegal market allocation scheme✓
• d.a lawful listing agreement

Market allocation - competitors agreeing not to compete in each other's territories or for certain customers - is an antitrust violation. It is not a legitimate referral arrangement, listing, or subagency.

If several brokers agree among themselves to refuse to cooperate with a discount broker, they have engaged in:

• a.a standard open listing
• b.a lawful tie-in arrangement
• c.an illegal group boycott✓
• d.a routine escrow procedure

A group boycott - competitors conspiring to exclude or refuse to deal with another competitor - violates antitrust law. A tie-in ties one product to another, and the remaining options are unrelated transaction terms.

Depositing a client's earnest money into the broker's personal or general operating account is:

• a.a required accounting practice
• b.permitted whenever the client consents
• c.lawful as long as it is repaid quickly
• d.commingling, a serious license-law violation✓

Commingling mixes client trust funds with the broker's own money and is prohibited; funds belonging to others must stay in a separate trust or escrow account. It is not cured by prompt repayment or by client consent.

A broker who uses a client's trust funds to pay the broker's own business expenses has committed:

• a.amortization
• b.conversion✓
• c.proration
• d.subrogation

Conversion is the unauthorized use or misappropriation of client trust funds for the broker's benefit - a serious offense beyond mere commingling. Proration allocates costs, subrogation substitutes claims, and amortization is loan repayment.

A 'blind ad,' prohibited by most license laws, is one that:

• a.includes the property's street address
• b.fails to disclose that the advertiser is a real estate licensee or broker✓
• c.lists an accurate price for the property
• d.contains the brokerage's full business name

A blind ad conceals the fact that a licensee or brokerage placed it, misleading the public; most license laws require ads to identify the broker. Including the broker's name, an accurate price, or the address does not create a blind ad.

Real estate advertising must be:

• a.printed only in a local newspaper
• b.approved by the buyer before it is published
• c.drafted and reviewed by an attorney
• d.truthful and not misleading about the property or its terms✓

Advertising must be accurate and not deceptive about the property, price, or terms, and it must comply with fair housing rules. It need not be pre-approved by a buyer, limited to newspapers, or drafted by a lawyer.