West Virginia Real Estate Salesperson Exam — All Questions

Regarding a known material defect in a property, a West Virginia licensee must:

• a.Disclose it only if the buyer requests it in writing
• b.Ignore it under caveat emptor
• c.Conceal it if the seller asks
• d.Disclose the known material defect and deal honestly with the parties✓

West Virginia licensees must disclose known material defects that could affect a reasonable buyer's decision and must deal honestly with all parties. A licensee may not conceal or misrepresent a known defect even at the seller's request.

Earnest money a West Virginia salesperson receives from a buyer must be:

• a.Sent to the Real Estate Commission for safekeeping
• b.Held by the salesperson in a personal account until closing
• c.Given directly to the seller when the offer is written
• d.Delivered promptly to the supervising broker for deposit in the brokerage trust account✓

Client funds such as earnest money must be handled through the brokerage's trust (escrow) account, which the broker maintains and keeps separate from personal funds. A salesperson who receives money must deliver it promptly to the supervising broker. Commingling or converting client money is a serious violation of West Virginia license law.

How much of a West Virginia broker's own money may sit in the brokerage trust fund account?

• a.none at all under any circumstances
• b.up to $500, to maintain a minimum balance
• c.up to $100, to maintain a minimum balance✓
• d.any amount, so long as the broker's records identify it

Commingling is prohibited and the account may not be pledged as collateral, but the statute allows the broker to deposit a maximum of $100 of his or her own money to keep a minimum balance. Cite: W. Va. Code §30-40-18(f).

A West Virginia salesperson receives an earnest money check from a buyer. The salesperson must:

• a.pay it over to the responsible broker immediately or by the next business day✓
• b.deposit it in the salesperson's own escrow account
• c.hold it until the seller accepts the offer
• d.deliver it to the closing attorney within 10 days

No salesperson or associate broker may collect money in a real estate transaction except in the name of and with the consent of the responsible broker, and trust funds received must reach the responsible broker immediately or by the next business day. Cite: W. Va. C.S.R. §174-1-15.2.

A West Virginia seller refuses to close through no fault of the buyer, and the contract is dead. The broker's claim to the earnest money is:

• a.half the deposit, as the customary brokerage share
• b.none, except by agreement of the parties or by court order✓
• c.the full commission the listing would have earned
• d.the entire deposit, since it was the seller who caused the default

The Commission's rule is flat: where the seller fails, refuses, neglects or is unable to consummate the transaction and the buyer is not at fault, the broker has no right to any portion of the earnest money except by agreement of the parties or court order. Cite: W. Va. C.S.R. §174-1-10.6.

Every West Virginia contract obligating a broker to represent a principal must:

• a.be renewed in writing every 90 days
• b.be filed with the Commission before any marketing begins
• c.contain a definite expiration date✓
• d.provide for automatic renewal unless the principal objects

The Act requires a definite expiration date and forbids any provision requiring the principal to notify the broker of an intention to cancel after that date — which is what rules out an automatic-renewal clause. Cite: W. Va. Code §30-40-26(b).

A West Virginia listing expires, and the seller signs with a different broker. A clause in the old listing requiring the seller to pay the first broker a commission in that situation is:

• a.enforceable for 90 days after expiration
• b.enforceable if the buyer was shown the property by the first broker
• c.enforceable only if the clause is initialed separately
• d.prohibited by statute✓

No provision may be inserted in a contract for representation that obligates the signer to pay a fee, commission or other consideration to the broker after the contract's expiration date if the person then enters into a contract for representation with a different broker. Cite: W. Va. Code §30-40-26(c).

A West Virginia license is NOT required of a person who:

• a.acquires or disposes of an interest in timber or minerals✓
• b.manages residential rental property for several owners
• c.collects rent and security deposits for an out-of-state owner
• d.assists in procuring a prospect for a fee

The Act's exception list reaches anyone acquiring or disposing of any interest in timber or minerals, and anyone acquiring or disposing of property for easements and rights of way — a practical carve-out in a state where severed estates are common. Property management, by contrast, is inside the licensed practice. Cite: W. Va. Code §30-40-5(c)(7); §30-40-4 ("Property management").

Under West Virginia's Cotenancy Modernization and Majority Protection Act, an operator may develop an oil or natural gas mineral property over a co-owner's objection when royalty owners consent who hold at least:

• a.a simple majority of the right to develop, operate and produce
• b.two thirds of the right to develop
• c.three fourths of the right to develop, operate and produce✓
• d.ninety percent of the right to develop

With reasonable efforts to negotiate with all royalty owners and consent from owners of at least a three-fourths interest, the use or development is permissible, is not waste, and is not trespass. Cite: W. Va. Code §37B-1-4(a); §37B-1-3 (definitions).

A West Virginia nonconsenting cotenant who receives the operator's best and final lease offer has how long to elect between a production royalty and participation in the development?

• a.30 days
• b.45 days✓
• c.60 days
• d.six months

If no written election reaches the operator before the 45 days run out, the cotenant is deemed to have chosen the production royalty option, and then has 30 days to appeal to the commission on whether the royalty offered matches the highest royalty paid in the same mineral property. Cite: W. Va. Code §37B-1-4(b), (c).

Under West Virginia's Oil and Gas Production Damage Compensation article, the right to receive surface damage compensation:

• a.may not be assigned apart from the surface estate, except to a tenant✓
• b.may be sold separately like a royalty interest
• c.belongs to the mineral owner, not the surface owner
• d.passes to the county when the surface is sold at tax sale

The developer owes the surface owner for lost income, crops destroyed, damage to a water supply in use before the permit, repair of personal property and diminution in value of the surface. The statute then locks that claim to the surface estate. Cite: W. Va. Code §22-7-3(a), (b).

West Virginia's excise tax on the privilege of transferring title to real estate is imposed at a state-level rate of:

• a.$0.55 for each $500 of value or fraction of it
• b.one percent of the sales price
• c.$2.20 for each $1,000 of value or fraction of it
• d.$1.10 for each $500 of value or fraction of it✓

A separate additional county excise tax of 55 cents for each $500 runs alongside it, which a county commission may raise to as much as $1.65 for each $500. A $20 fee for the Affordable Housing Fund is also collected before the clerk records a transfer for consideration. Cite: W. Va. Code §11-22-2(a), (b).