Download NC Real Estate Law and Legal Concepts: 250 Questions and Answers and more Quizzes Commercial Law in PDF only on Docsity!
POST LICENSING 303 - NC LAW, RULES, AND LEGAL
CONCEPTS 250 QUESTIONS WITH CORRECT
ANSWERS LATEST VERSION 2024/2025 RATED A+
"For a sale, a commercial real estate broker lien should be filed: - CORRECT ANSWER=> No more than
30 days prior to the closing date."
"What are the major components of a Graduated lease: - CORRECT ANSWER=> Rent increases or
decreases at certain graduated intervals."
"Basic duties of a landlord include: - CORRECT ANSWER=> Obligation to landscape the and maintain
any green space. XX Obligation to remedy any dangerous conditions. Obligation to supply laundry facilities. Obligation to repaint the property to the tenant's wishes"
"Which of the following is generally NOT a protected tenant activity: - CORRECT ANSWER=> XX Renting
property to subletters. Exercising rights under state law. Complaining to a government agency. Joining a tenants' rights association." "After engaging in a protected tenant activity, within what period can a tenant raise the defense of
retaliatory eviction: - CORRECT ANSWER=> 12 Months.
A tenant engaging in a protected tenant activity can raise the defense of retaliatory eviction in response to a landlord's eviction attempt within 12 months of such activity." "Which of the following is NOT one of the landlord's obligations according to the Residential Rental
Contract: - CORRECT ANSWER=> Repairing any imminently dangerous condition after being notified by
tenants. XX Providing backyard, balcony, roof, or other outdoor access. Repairing all facilities and appliances provided as part of the premises.
Keeping all common areas clean and safe." "Investigators have discovered that dangerous radioactive materials stored at a warehouse leased by Intersect Trucking, Inc. have leaked into the nearby soil. Who is responsible for covering the costs of the
ensuing cleanup effort: - CORRECT ANSWER=> Intersect Trucking.
If a lessee allows for the environmental discharge of any hazardous material, it is responsible for any resulting cleanup costs."
"When a vacation rental is sold: - CORRECT ANSWER=> Copies of lease agreement must be provided to
the buyer within 10 days of closing. All reservations must be disclosed, and the buyer must honor the lease agreements within 180 days of closing."
"What are the major components of a percentage lease: - CORRECT ANSWER=> Usually a fixed amount
plus a percentage of gross income or sales." "Andy is leasing a warehouse to a commercial kitchen supplier. He did not include a clause in the lease
regarding his right to enter the premises. He can enter the premises: - CORRECT ANSWER=> Never.
A landlord who does not include a clause in the lease regarding his right to enter the premises can't enter the premises during the term of the lease." "Tanya donated her tenant's table, valued at $600, to a nonprofit that provides free household furnishings to people in need. How long must the nonprofit hold the table before giving it to someone: -
CORRECT ANSWER=> 30 days.
A nonprofit must hold any personal property valued at $750 or less for 30 days. If the tenant requests the property within that period, it must be returned." "Kristina is renting a vacation property in the same town as Ryan when the mandatory evacuation is
ordered. She immediately evacuates. She is entitled to: - CORRECT ANSWER=> A refund of any
payments made according to the rental agreement, prorated for each night the evacuation order is in effect." "Phil arrives at the vacation property that he had planned to rent for the next week. To his surprise, a construction crew is renovating the home, and it is currently uninhabitable. Phil is entitled to which of
the following from the landlord: - CORRECT ANSWER=> A full refund."
"Regarding the termination of a property management agreement: - CORRECT ANSWER=> Termination
is always permitted but penalties may apply.
"A municipal housing authority is the tenant under several long-term leases for multi-family dwellings and also owns several properties. It leases or subleases and manages these properties through regular
salaried employees of the housing authority as permitted under NCGS Chapter 157. - CORRECT
ANSWER=> Deal"
"Adult child is appointed as the guardian for a parent who is suffering dementia and no longer can manage their financial affairs. The guardian advertises the parent's home for lease, shows it, and after carefully vetting an applicant enters into a written lease agreement, begins collecting the monthly rent, and uses it to pay any
property-related expenses. - CORRECT ANSWER=> Deal"
"A fully competent owner of several rental properties doesn't like to be burdened with "details" and persuades her tax preparer to handle the leasing and rent collections for her rental properties, since he reports all income and expenses when he prepares her taxes each year.
The tax preparer is authorized to withhold 8% of all rents collected as his fee. - CORRECT ANSWER=>
No Deal"
"Of the forms of business ownership, which one is NOT an entity: - CORRECT ANSWER=> Sole
proprietorship Entities: LLC, Partnership and Corporation"
"A licensee who is responsible for an office location is a: - CORRECT ANSWER=> BIC"
"Regarding firm licenses the following are true: - CORRECT ANSWER=> Failure to have a BIC with a firm
license results in an inactive license. Failure to renew a firm license results in an expired license. Every firm license must be renewed each year by June 30th."
"All of the following is true regarding a BIC: - CORRECT ANSWER=> Full brokers may work for more
than one BIC with mutual consent of all BICs. A BIC can only be the BIC of more than one firm provided they share the same location. Every real estate location must have a BIC."
"BIC and BIC eligible status can be maintained by: - CORRECT ANSWER=> Renewing license by June 3rd
and taking BICUP plus one elective by June 10th."
"Regarding a BICs: - CORRECT ANSWER=> A BIC is responsible for an office location."
"An active real estate license is required for: - CORRECT ANSWER=> Providing brokerage services.
**Selling could be FSBO and salaried employees are allowed to show units without having a license." "A broker who is qualified to serve as a BIC but not currently serving as the BIC of any office location is: -
CORRECT ANSWER=> BIC Eligible"
"A successful broker with a broker's assistant, closing coordinator and brokers exclusively for listing and
buyers describes the: - CORRECT ANSWER=> Evolution of a team."
"The NCREC BIC Update recommends that BICs do all of the following EXCEPT: - CORRECT ANSWER=> X
Take the blame for a provisional broker's mistake." "Following a sale, the broker representing the buyer is surprised to learn that the listing brokerage, which isn't a member of the same cooperative listing service, will not share any compensation for the
transaction. The broker should have: - CORRECT ANSWER=> Requested a fee sharing agreement with
the brokerage before submitting the buyer's offer." "An active broker works for a firm whose license expired on July 1. Which of the following statements are
true: - CORRECT ANSWER=> The broker may no longer be entitled to compensation for services
performed before July 1." "A broker recommends a plumber to new tenants. The broker and the plumber have an agreement that the plumber will the broker 5% of the first fee paid by referred clients. The broker is required to inform
the tenants of: - CORRECT ANSWER=> The kickback arrangement orally. Brokers must disclose kickback
arrangements to any relevant party. Altough written disclosure is highly recommended, it is not required."
"When is a broker required to share some of the brokerage fee with the party principal: - CORRECT
ANSWER=> Never. Though a broker can share a portion of a brokerage fee with a party principal,
regardless of whether the party principal has a real estate license, the broker is never REQUIRED to share such a fee." "A description of the compensation made in sufficient time to aid a reasonable person's decision-making
is known as: - CORRECT ANSWER=> Timely Disclosure"
"Which of the following properties could be subject to a commercial real estate broker lien: - CORRECT
ANSWER=> An office building. A commercial real estate broker lien can only apply to a property that is
used"... primarily for sales, office, research, institutional, or mining purposes for multifamily residential purposes involving five or more dwelling units"... or property that is zoned to permit such use, or which is subject to a petition for rezoning, or which is in good faith intended to be immediately used for such purposes."
Can be sales or leasing fees. XX Can be by any licensed broker in the U.S. Commercial real estate broker liens must be by either NC licensed brokers or licensed non-resident limited commercial brokers."
"What is the overall intention of RESPA: - CORRECT ANSWER=> Prohibit the payment of kickbacks to
settlement service providers that unnecessarily increase costs to the consumers."
"Which of the following regarding a firm license is TRUE: - CORRECT ANSWER=> XX Entities must have
a firm license to receive brokerage compensation. Entities do not need a firm license to receive brokerage compensation. BICs may pay a licensee's entity even if the entity does not have a firm license. BICs may pay a licensee's entity if the entity has a firm license but it is not current or active" "Following a sale, the broker representing the buyer is surprised to learn that the listing brokerage, which isn't a member of the same cooperative listing service, will not share any compensation for the
transaction. The broker should have: - CORRECT ANSWER=> Requested a fee sharing agreement with
the brokerage before submitting the buyer's offer" "A description of the compensation made in sufficient time to aid a reasonable person's decision-making
is known as: - CORRECT ANSWER=> Timely disclosure. Timely disclosure is known as a description of
the compensation made in sufficient time to aid a reasonable person's decision-making."
"When filing a Commercial Lien, what is the proper timeline:: - CORRECT ANSWER=> Cannot be filed
until within 30 of closing or possession; Leaseholds within 90 days of possession or within 60 days of nonpayment" "A broker left a firm shortly after participating in a transaction. To whom should the closing attorney pay
the commission: - CORRECT ANSWER=> The firm."
"Which of the following is a primary benefit of a multiple listing service (MLS): - CORRECT ANSWER=>
It helps member/participant individual real estate companies find other firms that could cooperate in the sale/lease of a property. An MLS helps firms cooperate with each other in transactions. A member/participant can only be a real estate company, entity, or owner thereof that has paid dues to be a member of that service. Individual brokers are called users or subscribers."
"To a settlement service provider, things of value include all of the following EXCEPT: - CORRECT
ANSWER=> Family photo albums."
"A description of the compensation, incentive, or bonus, including the value and party paying it is known
as: - CORRECT ANSWER=> Full disclosure."
"A provisional broker assistant's BIC is currently working out of another office. Which services can the
assistant provide at the moment, if any: - CORRECT ANSWER=> Administrative services."
"When sharing Commissions with Firms: - CORRECT ANSWER=> May pay any brokerage with a license
that is current and active in any state provided the don't engage in NC brokerage activities. Firms may pay any brokerage with a license that is current and active in any state provided they don't engage in NC brokerage activities." "The act of receiving compensation for an act that is considered real estate brokerage without a license
is: - CORRECT ANSWER=> A misdemeanor."
"The following is TRUE regarding compensation : - CORRECT ANSWER=> A licensee can receive
compensation earned when his license is current and active." "Following a sale, the broker representing the buyer is surprised to learn that the listing brokerage, which isn't a member of the same cooperative listing service, will not share any compensation for the
transaction. The broker should have: - CORRECT ANSWER=> Requested a fee sharing agreement with
the brokerage before submitting the buyer's offer." "Which of the following scenarios demonstrates the legal sharing of compensation for brokerage
services: - CORRECT ANSWER=> A buyer's agent shares a portion of his brokerage fee with his buyer-
client, as long as the buyer's lender is made aware of the agreement."
"Licensees may create an entity: - CORRECT ANSWER=> When they get a Firm License."
"After a period in which an active broker provided brokerage services, she is now inactive. May the firm
pay her for the services she provided while she was active? - CORRECT ANSWER=> Yes."
"A provisional broker assistant's BIC is currently working out of another office. Which services can the
assistant provide at the moment, if any: - CORRECT ANSWER=> Administrative services."
"What agency enforces RESPA: - CORRECT ANSWER=> Consumer Financial Protection Bureau. The
CFPB regulates RESPA, they are a new agency that also regulates TILA and are very active."
"When collecting on a commercial lien: - CORRECT ANSWER=> Costs and attorney fees go to the
prevailing party, and there are 18 months to collect calculated from filing dates. When collecting on a
Paying a commission to any person for services performed in violation of North Carolina License Law." "In her spare time, provisional broker Helen helps her friend Kwame find a buyer for his house. In thanks,
Kwame gives her $500. In taking the money, has Helen violated License Law? - CORRECT ANSWER=>
Yes, because she accepted a commission for brokerage services from a person other than her BIC."
"The Commission could suspend or revoke which of the following brokers' licenses: - CORRECT
ANSWER=> Tasha's license is inactive after she failed to pay her renewal fee.
XXBrian acquired his license after faking the completion of his pre-licensing coursework. Jake's license is inactive after he failed to complete his continuing education. Alicia's paid her license renewal fee on June 30."
"A closing statement must contain information about all of the following EXCEPT: - CORRECT
ANSWER=> The sale price.
The receipt of all monies related to the transaction. The disbursement of all monies relating to the transaction. XX Other monetary exchanges the broker could not have been aware of" "If the Commission finds a licensee guilty of misconduct, the Commission may suspend or revoke the
license within what time period: - CORRECT ANSWER=> Anytime.
Following a finding of guilt, the Commission may impose consequences, such as suspending or revoking a license, at any time."
"Upon receipt of a complaint, NCREC is required to: - CORRECT ANSWER=> Investigate."
"If a complaint is against a full broker, the BIC will be named if there is indication of the BIC's involvement
or the complaint falls within any of the following categories EXCEPT: - CORRECT ANSWER=> Referrals."
"Which of the following brokers has NOT committed misconduct: - CORRECT ANSWER=> XXArielle
keeps her clients' money in separate trust accounts. Stephen keeps his clients' money in cash in a highly organized office filing system. Jeremiah keeps his clients' money in his personal savings account.
Mike keeps some of his clients' money in personal savings and some in separate escrow accounts, depending on the amount."
"What kind of supervision is a BIC required to exercise over provisional brokers: - CORRECT ANSWER=>
Active and direct."
"The disciplinary process begins with a(n): - CORRECT ANSWER=> Complaint."
"When may the Commission hold a hearing on allegations of misconduct? - CORRECT ANSWER=>
Upon the finding of probable cause of violation of License Law. The Commission may hold a hearing on allegations of misconduct only after the establishment of probable cause that a licensee has violated a provision of License Law." "NCREC might impose any of the following sanctions on a licensee as a result of a disciplinary
investigation EXCEPT: - CORRECT ANSWER=> Reprimand.
Conditions or restrictions on the license. License revocation or suspension. XXPrison sentence."
"Which of the following actions would NOT result in disciplinary action: - CORRECT ANSWER=> XXA
broker is acting for the buyer and the seller in a transaction with both parties' consent. A broker is acting for the buyer and the seller in a transaction without the seller knowing. A BIC directs his provisional broker assistant to tell a potential buyer a property is off the market, even though it isn't. A broker represents a client in court." "North Carolina License Law holds the broker liable for failure of delivery of which of the following: -
CORRECT ANSWER=> Closing statement."
"Which of the following licensees who also work another job would be safe from having their license
suspended or revoked by the commission: - CORRECT ANSWER=> Greg, an attorney who was
convicted of stealing clients' jewelry. Laeticia, a mortgage broker who was convicted of breach of fiduciary responsibility. XX Keshav, a freelance writer who was convicted of reckless driving.
XX Violation of any other timeshare statutes. A,B,C are all felonies, violation of other timeshare statutes is a misdemeanor." "Regina has purchased some farmland in a remote region. The only way to access the land is via a long driveway that is not described in writing or on the public record. This example best demonstrates: -
CORRECT ANSWER=> Practical access.
This driveway is an example of practical access, a form of access to land that has no legal access established in writing or on the public record."
"What distinguishes a modular home from a manufactured home: - CORRECT ANSWER=> Modular
homes are built in sections and assembled on site whereas manufactured homes are assembled offsite and permanently affixed to the ground." "All of the following are particular rental income issues regarding office space rentals EXCEPT: -
CORRECT ANSWER=> XX Laundry provisions.
Escalator provisions. Pass through provisions. Upfits."
"The Owners' Association Disclosure Addendum must include information about: - CORRECT
ANSWER=> Pending lawsuits against the owners' association.
The addendum must describe any unsatisfied judgments or pending lawsuits involving the property, development, and/or owners' association."
"What is a characteristic of a Class A space: - CORRECT ANSWER=> Modern features."
"In the case of a conflict in the sale of a condominium between the contract and the Owners' Association
Disclosure Addendum, which document controls: - CORRECT ANSWER=> The Addendum, unless the
conflict involves the description of the property or the identity of the seller or buyer. In cases of conflict, the Addendum generally controls, but if the conflict involves the description of the property or the identity of the seller or buyer, the contract controls."
"Of the following pass through provisions, which one does NOT pass through to the tenant: - CORRECT
ANSWER=> Deed."
"In a lease transfer transaction, a commercial real estate lien may be filed no later than: - CORRECT
ANSWER=> 90 days following the tenant's possession."
"A retail space that is used to offer and sell goods or services to the consuming public is a retail property.
What are the three major categories of retail property: - CORRECT ANSWER=> Strip or cluster retail
facilities, shopping centers, and stand-alone retail facilities."
"What is the timeshare 5x5 rule: - CORRECT ANSWER=> 5 or more time periods, over 5 years, 5 day
right of recission, $500 fine."
"Which is the most complex classification of commercial property: - CORRECT ANSWER=> Land.
Land, is the most complex type of commercial property, as it can be put to any legal and permissible use." "Which of the following properties may NOT be subject to a commercial real estate broker lien: -
CORRECT ANSWER=> In a region of the state where there are no regulations governing property use, a
new structure that will contain a supermarket in one year. A commercial real estate lien may apply to property in a region of the state where there are no regulations governing property use only if the property will immediately be used for commercial purposes."
"Factors that affect retail environments include all of the following EXCEPT: - CORRECT ANSWER=>
Location. Traffic Patterns. XX Weather. Income levels."
"Mark incorrectly files a commercial broker lien and pursues enforcement. He may be: - CORRECT
ANSWER=> Liable to pay the owner's attorneys' fees."
"The main purpose of a commercial real estate broker lien is to: - CORRECT ANSWER=> Protect the
broker's right to a brokerage fee."
"Which of the following is TRUE regarding timeshares in North Carolina: - CORRECT ANSWER=>
Timeshares are considered real estate, can be sale or lease, and the right to occupy can be distributed 5 or more separate time periods in 5 years."
"Which of the following characteristics of Geoff's home meets the criteria for a manufactured home: -
CORRECT ANSWER=> The property is 400 square feet.
A manufactured home must be at least eight feet or more in width or 40 feet or more in length; when erected on-site, it must be 320 or more square feet."
"What policy typically covers common areas in a condominium: - CORRECT ANSWER=> Condo master
policy. The condo master policy typically covers any damages to common areas, since the common areas are shared ownership."
"All of the following describe a townhome EXCEPT: - CORRECT ANSWER=> Individual ownership of the
exterior of the unit plus the land on which the unit sits. Usually horizontally attached and share a common wall. Often shared use of common areas. XX Common areas are owned by the homeowners. Common areas are owned by the HOA, not by the homeowners."
"Rental rates for office space will often omit what aspect: - CORRECT ANSWER=> Total square footage.
Often, total square footage is not used to calculate rental rates for office space."
"Which of the following is NOT a major category of commercial property: - CORRECT ANSWER=>
Subdivisions."
"Which of the following regarding commercial leases is FALSE: - CORRECT ANSWER=> There is no
statute for commercial leases, they are completely negotiable. A common consideration is how the tenant will improve the land. XX A common consideration is school zoning for the tenant's children. A common consideration is landlord paid upfitting."
"Which of the following is FALSE regarding the handling of funds from a timeshare: - CORRECT
ANSWER=> Brokers are required to immediately deliver all money to the project broker.
Project broker has 3 days to deposit the money in the trust account.
The money must be held in the trust account for 10 days. XX In the event of cancellation, no refund will be given."
"Timeshare public offering statements must include all of the following EXCEPT: - CORRECT ANSWER=>
Total financial obligation. Management agreements. Term of the timeshare. XX Background information on all other timeshare residents."
"What is a characteristic of a Class C space: - CORRECT ANSWER=> Older than 30 years."
"What area is generally NOT part of rented office buildings: - CORRECT ANSWER=> Living space."
"What is the definition of "Limited Common Areas" in condominiums: - CORRECT ANSWER=> Common
areas in a condo that are reserved for use by one or more units to the exclusion of other units." "Which of the following would be a correct order of events regarding abandoned property valued above
$750: - CORRECT ANSWER=> Tenant given written notice of the approximate time that the order or
writ for possession will be enforced; landlord signs a statement saying that the personal property may remain on the premises; sheriff locks the premises. The sheriff must first give the tenant written notice of the approximate time that the order or writ for possession will be enforced. Later, if the tenant does not request his personal possessions and if the landlord signs a statement saying that they stay on the premises, the sheriff will lock the premises." "The Landlord must remedy and "imminently dangerous" aspects of a property within a reasonable time and charge the tenant for the actual costs of the aspect was the fault of the tenant. Which of the
following is NOT considered an imminently dangerous aspect of a property: - CORRECT ANSWER=>
Lack of laundry facilities."
"How should owner-landlords or brokers handle monies related to vacation rentals: - CORRECT
ANSWER=> By depositing any advance payments into a trust or escrow account within 3 banking days."
"Which of the following tenants could be at risk for expedited eviction for criminal activity: - CORRECT
ANSWER=> Jesus did not inform his landlord after his former roommate, who had been evicted from
their apartment for criminal activity, visited him at the same apartment."
"According to the Tenant Security Deposit Act: - CORRECT ANSWER=> All security deposits go into a
trust account.
Protects the lessee against acts of third-party wrongdoers. Only protects the lessee if it is expressly included in a provision in the lease. XX Is implied in every lease A promise that the property will not be claimed by someone with a better claim to title."
"What are the major components of a net lease: - CORRECT ANSWER=> XX Tenant pays all expenses
including operating expenses, property taxes, and insurance. Rent increases or decreases at certain graduated intervals. Lessee gets to deduct the rent as a business expense but improvements made become the property of the lessor and don't typically include an option to purchase. Usually a fixed amount plus a percentage of gross income or sales." "Omar's vacation rental tenant refuses to leave the property after her stay as defined in the rental agreement has ended. He calls her and says that she has three hours to vacate the premises. Which of
the following is TRUE in this scenario: - CORRECT ANSWER=> Omar improperly gave notice because it
wasn't posted on the front door of the property. XX Omar improperly gave notice because he didn't give his tenant at least four hours to vacate. Omar improperly gave notice because it wasn't in writing. Omar may immediately file a summons and complaint against the tenant. A landlord may give oral notice to a vacation renter who is holding over to leave the property, but he must give the tenant at least four hours' notice." "A category 5 hurricane is approaching the North Carolina coast, and state authorities have ordered a mandatory evacuation in certain areas. Ryan is renting a vacation property in one of the affected areas
and decides to ride out the storm there. He is entitled to: - CORRECT ANSWER=> No refund."
"Who may use the Vacation Rental Agreement Form 411-T: - CORRECT ANSWER=> An owner managing
his property for vacation rental purposes." "Babisa abandons personal property valued at $3,000. His personal property must be handled by the: -
CORRECT ANSWER=> The sheriff."
"Before pursuing expedited eviction for criminal activity, a landlord should seek: - CORRECT
ANSWER=> Legal advice.
The expedited eviction for criminal activity statutes contain detailed requirements and procedures. Landlords should seek legal advice before pursuing this type of eviction." "Four days after the execution of a writ of possession, Imani asks her landlord for her TV, valued at $350.
Is she still entitled to her TV: - CORRECT ANSWER=> No, because it is valued at over $300.
No, because it has been deemed abandoned. XX Yes, because it has not yet been deemed abandoned. Yes, because it is valued at less than $400." "In February 2019, Mena complained to the city about a persistent leak in her apartment's ceiling that her landlord refused to fix. In March 2020, her landlord informed her he was terminating the lease to sell the building. However, six months later, the building has not yet been sold. Does the landlord's
termination of the lease constitute retaliatory eviction: - CORRECT ANSWER=> No, because
complaining to a government agency is not a protected tenant activity. XXNo, because it occurred after the 12 months following Mena's complaint. Yes, because the landlord has been dishonest about his intentions for the building. Yes, because it occurred within the 18 months following Mena's complaint. While Mena's complaint is a protected tenant activity, the defense of retaliatory eviction can only be raised within 12 months of such activity."
"Permitted fees by a landlord in an eviction include all of the following EXCEPT: - CORRECT ANSWER=>
Second trial fee. Court appearance fee. Complaint fee. Annoyance fee."
"Regarding leases, subleases are typically: - CORRECT ANSWER=> XX Original tenant, not the
sublessee, is liable for damages. Sublessee is liable for damages. Discouraged in commercial agreements.
