Free Florida Real Estate Practice Exam Questions (June 2023) 100+

A seller who pays a commission to a broker under false pretenses would be able to apply for compensation from the Florida Real Estate Recovery Fund. While the other instances are more than likely illegal, this is the only case that grants access to the fund.

Condominium often shortened to condo, is a type of living space which is similar to an apartment but which is independently sellable and therefore regarded as real estate. Unlike apartments, which are leased by their tenants, condominium units are owned outright. The answer is all the condominium owners in the form of percentage undivided interests because all condominium owners legally own a portion of all the facilities there.

Real estate liens are financial claims against property. Liens can be divided into two categories: Voluntary and Involuntary liens. Involuntary liens aren’t created by the homeowner. It is a claim imposed against a property without the consent of its owner. Involuntary liens are placed usually by government revenue authorities for unpaid duties or taxes. Read More Here

Functional obsolescence refers to the loss of property value due to an obsolete design feature. Outdated plumbing would be considered functionally obsolete because it is outdated. Who determines what is obsolete or not? Usually the buyer or homeowners. If a neighborhood is filled houses with new bathrooms and/or new plumbing, and your's isn't, It would be considered functionally obsolete. Read More Here

The surface rights are the rights to use the surface of the earth. Subsurface rights are the rights to the natural resources lying below the earth's surface. Interestingly an owner may transfer rights without transferring the subsurface rights. For example, a landowner can sell his rights to an oil and gas company in his land but still can own the land itself.

Condemnation is the procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate. eminent domain is the right which grants the government to take privately owned land from someone while condemnation is the action of taking that land.

Hypothecation occurs when an asset is pledged as collateral to secure a loan. A rental property, for example, may undergo hypothecation as collateral against a mortgage issued by a bank.

There are two types of inactive license status in Florida, voluntary inactive and involuntary inactive. A licensee with an inactive license (whether voluntary or involuntary) cannot legally perform or be compensated for real estate services. After someone passes their real estate exam their license is voluntarily inactive until they come under agreement with a real estate broker/company.

A fiduciary is NOT a neutral third party. Fiduciary is a term that refers to a legal relationship that is confidential between two parties. The fiduciary responsibility is to protect the privacy of the client and to keep all of the client’s information confidential. An example of a neutral third party is an escrow agent is a person or entity that holds property in trust for third parties while a transaction is finalized or a disagreement is resolved.

The primary public land-use control is zoning. The primary private land-use control is deed restrictions or restrictive covenants, which limit what can be done on the property by the owner. Deed restrictions are limitations to the use of the property imposed by a past or current owner and are usually legally bound forever.

Once the appraisal has been performed on a property being bought with a VA loan, the Department of Veterans Affairs (VA) issues a Certificate of Reasonable Value. A Certificate of Real Estate Value documents the price at which a property was sold as well as any unique terms that were added to the transaction prior to its completion.

When you hear rule-making, remember its legislative, legislative makes the rules. The rule-making authority of the Florida Real Estate Commission (FREC) is called Quasi-Legislative.

The Commission consists of 7 members, 5 who must hold a real estate license. “Four members must be licensed brokers, each of whom has held an active license for the 5 years preceding appointment; one member must be a licensed broker or a licensed sales associate who has held an active license for the 2 years preceding appointment; and two members must be persons who are not, and have never been, brokers or sales associates.” Per Florida Statutes 475.02 Florida Real Estate Commission.

Remember initial renewal is different from subsequent renewal periods. The initial renewal of a Sales Associate license requires the passing of 45 hours of post-license education. The initial renewal of a Broker license requires the passing of 60 hours of post license education.

A land trust is a legal agreement in which a property owner transfers the title to a property to a trustee. The property owner is typically the beneficiary and directs the trustee in all matters relating to the management of the property, as outlined in the trust agreement or deed. The property owner also retains all property rights including the freedom to develop, rent and sell the property. One of the main advantages of this trust is that the actual property owner remains anonymous. Land trusts can not only bring some legal protection, but it can also help the property owner negotiate prices if he or she is particularly wealthy and wants to remain anonymous.

The Florida Real Estate Commission is located in Orlando.

Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. In our instance since the washer and dryer were included in the contract, the buyer may sue the seller for specific performance.

Owning real estate carries with it a "bundle of legal rights” The bundle of rights is the right of possession, the right of control, the right of exclusion, the right of enjoyment and the right of disposition. When a person purchases property, he or she is given the rights to the property. Interestingly the rights can be split up and given to different parties. Think of the bundle of rights as a bundle of sticks. Read More Here

A testate estate means that the decedent or deceased person left a will. An intestate estate means that the decedent did not leave a will. If this occurs then a probate court will determine the distribution of his or her property to the appropriate parties.

The Florida Real Estate Commission can imprison real estate professionals but they can do just about anything else if a professional violates the state mandated rules.

Safe Drinking Water Act (SDWA) was established in 1974. It allowed greater control by EPA to control contaminant levels, take legal action against public water auth. for violations, and require periodic water testing and notification to state authority and homeowners if contaminated.

Proration is the allocation or division of money items at the closing. Proration mainly comes into play when a seller prepays their home taxes for the year. Because they paid for the full year and are selling the property, the buyer will then owe the seller the remaining months of taxes.

Dower and Curtesy was an old law. Oftentimes, back in the day, real property owned by a husband was typically not inherited by the wife nor was the wife's property inherited by her husband. Instead, the property would either go to the children or some other member of the husband or wife's line. Since the late 1800’s the law has been largely abolished, however some states still hold the law true, but not Florida.

Remember initial renewal is different from subsequent renewal periods. The initial renewal of a Sales Associate license requires the passing of 45 hours of post-license education. The initial renewal of a Broker license requires the passing of 60 hours of post license education.

Members shall be appointed for 4-year terms. Per Florida Statutes 475.02 Florida Real Estate Commission.

An individual seeking to be excused from the requirements of a zoning ordinance needs a variance. Or a conditional use permit. A conditional use permit is a zoning exception that allows you to use your property in non-conforming ways. A variance is a request to deviate from current zoning requirements.

In this example the answer is indefinitely, since they are a past client. If their business was terminated or expired it would be 18 months. Since they are a past client, and there's no mention of expiration, or termination they can reach out indefinitely. Per 16 CFR 310.2

Trusts can be created during an individual's lifetime, or they can be established following someone's death. A trust works as it follows: the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary. The trustee is required to manage the trust property in accordance with the trustor's wishes and in the beneficiary's best interests. A trustor can be an individual or organization.

The formula for finding commission is pretty simple. Just times whatever percentage you have by the total price of the house. So in this case take $250,000 and multiply it by .06 or 6%. Doing the math that gives you $15,000.00.

Florida is NOT a Community Property state. The states that have community property laws are: Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. Community property is property acquired that is considered to be obtained by mutual effort.

Each square, six miles by six miles, is called a township. Since each township is six miles by six miles, townships contain 36 square miles, each one forming a section.

Mechanic's liens are legal documents that essentially reserve the rights of the filer to seek unpaid compensation. They are usually filed by contractors, subcontractors, or suppliers that never received payment for work that they performed or materials that they provided on the property.

Under Florida law, a landlord must return the tenant's security deposit within 15 to 60 days after the tenant has surrendered the rental property to the landlord (that is, returned the keys and vacated the property), depending on whether the tenant disputes any deductions taken out of the security deposit.

Upon receiving an earnest money deposit, a Florida sales associate should give the funds to their broker or owner-developer. If a sales associate or broker associate is asked to deliver funds to the employer, they must no later than the end of the next business day following receipt.

Usually, the lender or financing organization will hire the appraiser. Technically the seller pays for the appraiser since it comes out of the final sales price, however the hiring aspect is almost always done by the lender.

Antitrust Laws are a collection of federal and state government laws that regulate the conduct and organization of business corporations, normally to promote fair competition for the benefit of consumers. While selling a house without a license is illegal and some of the other answers are too, the only clear antitrust violation is dividing territories. Which is when competing brokers agree to split territories, and divide interests accordingly. An example of this is if agencies meet up and agree to divide the town in to three separate areas to work in. This prevents competition which is bad for the consumer and a clear antitrust violation.

Remember, an open listing is truly open. Each broker has an opportunity to earn the entire commission if they can come up with a buyer.

Remember DUST and your essential elements of value. Demand: This means the desire to buy and an ability to pay. Utility: The item satisfies a human need or desire; such as shelter, income, or recreation. Scarcity: Limited in supply, as supply diminishes, value increases. Transferability: Able to transfer from one owner to another.

If an applicant for a real estate license provides false information on their application, they commit which of the following criminal violations? Giving false information when applying for or renewing a license is a felony of the third degree, punishable by a criminal court.

Depreciation. Only the Cost Approach valuation process uses depreciation.

When a home is purchased using an adjustable rate mortgage or ARM, the monthly loan payment on the mortgage will vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced. A variable-rate mortgage, adjustable-rate mortgage, or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.

The process of valuing real estate is a challenging one. There are many different techniques and sources that can be used to arrive at an estimate of the cost. It requires extensive experience to achieve accurate results with all relevant factors present. Reconciliation is the final step in a real estate appraisal where the appraiser weighs each appraisal approach and determines which one is most relevant and should be used.

Real estate has three physical characteristics that differentiate it from other assets in the economy: 1. Indestructibility meaning land cannot be destroyed or worn out. Its appearance may be altered but it always continues to exist. 2. Immobility meaning geographical location of the property remains the same & can never be changed, it is fixed. 3. Uniqueness or non-homogeneity meaning no parcels of real estate are exactly alike. Scarcity, improvements and permanence of investment are all economic characteristics of real estate.

Fee simple absolute or (fee simple for short) is an estate in land. It is the highest form of real estate ownership that is recognized by law, in which the owner can enjoy the property to its fullest extent and is only limited by government powers which we’ll cover later on. Fee simple absolute is the greatest interest in a parcel of land that one can possibly own. The fee simple estate has unlimited duration and can be passed on to heirs. Read More Here

Trusts can be created during an individual's lifetime, or they can be established following someone's death. A trust is a three-party relationship in which the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary. The trustee is required to manage the trust property in accordance with the trustor's wishes and in the beneficiary's best interests. A trustee can be an individual or a financial institution such as a bank.

Severance is the opposite of attachment. Severance is taking an item that is attached to the land and removing it as personal property.

Fee packing, equity stripping, and balloon payment abuses are all examples of predatory lending practices. Predatory lending typically refers to lending practices that impose unfair, deceptive, or abusive loan terms on borrowers. While these practices are wrong, unfortunately sometimes they are perfectly legal.

Radon is a GAS not a liquid.

As a general rule of thumb all written offers must be presented to the seller. It is a serious breach of a real estate agent's fiduciary duty to the seller not to present all purchase offers.

The income approach is a real estate valuation method that uses the income the property generates to estimate fair value. It's calculated by dividing the net operating income by the capitalization rate.

There are four main elements of a valid real estate contract: The party must be the legal age of 18 or older and deemed legally competent. The contract must be legal or hold a legal purpose. A clear and specific consideration must be included in the agreement. The contract must hold mutual consent or be agreed upon by both parties. If a minor signs the contract it is considered voidable.

A tenant who continues to occupy property after his or her rights have expired is said to occupying the property under an Estate at Sufferance.

The statute of frauds requires certain types of contracts to be executed in writing. The statute covers contracts for the sale of land, agreements involving goods worth over $500, and contracts lasting one year or more.

Closing is always the final step in executing a real estate transaction. Closing is known by many names. Some areas may call it settlement and transfer, some may call it passing papers. Traditionally it is called closing.

A mechanic’s lien also called a construction lien is a lien placed on your property for nonpayment for work you had done on the property. It is a claim made against a property by a contractor or other professional who has supplied labor or materials for work on that property. They are designed to protect professionals from the risk of not being paid for services. A mechanic’s lien is involuntary and specific.

Florida is a lien theory state which means banks or mortgage lenders never retain title to the property. Instead, the mortgage lender holds a lien against the property. In these states, the deed stays with the borrower, and the lender places a lien on the property using a mortgage. The lien ends when the loan is paid in full.

Most real estate sales contracts include contingency clauses, making them voidable. A voidable contract is a legal agreement between two parties that may be unenforceable for any number of reasons. If a contract has a contingency it's voidable. It still can be considered valid but only after the contingencies are met or no longer exist.

The U.S. Department of Housing and Urban Development's Office (or HUD) administers and enforces federal laws and establishes policies that make sure all Americans have equal access to the housing of their choice.

Tax liens are imposed by the federal, state, or local government based upon back property taxes that are due. Not only can these seriously impact your credit report, but until they're paid off, they can prevent you from selling the property. Tax liens are involuntary and usually specific. The important thing to remember is the government always gets paid first in terms of money distribution.

Appraisals are the best way to determine fair value. The overall appraisal process is based on a number of factors, such as its cost, the income it generates or its fair market value as compared to similar assets.

An amendment typically changes terms of a contract. An addendum “adds” terms to a contract. For example, let's say a buyer and seller have agreed to an April 10th closing date but later both agreed to change the closing date to April 25th. They would use an amendment. Addendums are used to add or delete terms or conditions NOT previously agreed to. That's the difference.

Percolation is the process of a liquid slowly passing through a filter. It's how coffee is usually made. For real estate, a percolation test is a test to determine the water absorption rate of soil in preparation for the building of a septic drain field or infiltration basin. The results of a percolation test are required to properly design a septic system.

They belong to Trinity Real Estate LLC. The listings belong to brokerage, not the salesperson who listed the property.

A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual. Lenders are required to disclose prepayment penalties at closing in the form of a prepayment penalty clause.

A warranty deed can include six forms of covenants for title. A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer). The general warranty deed offers the grantee the most protection. With this type of deed, the grantor makes a series of legally binding promises (called covenants) and warranties to the grantee agreeing to protect the grantee against any prior claims and demands of all persons whomsoever in regards to the conveyed land. Typically a warranty deed has five to six covenants.

If a dispute is pending, the court will likely issue an injunction preventing Mr. Joe from cutting down the trees until they are entirely resolved. Injunctions can be used to protect interests in real property. A court ordered injunction can be used to prevent a harmful action, stop ongoing or repeated conduct, or force a defendant to take action to prevent harm.

Water rights are appurtenant, meaning they run with the land and not with the original owner. In other words, if an oceanfront property is sold, the new owner gains the littoral rights and the seller relinquishes his or her rights. Read More Here

Remember, community property and tenants by the entirety is through marriage. You can't have that form of ownership with two unmarried individuals. Tenancy in common would be the best answer. TIC is when a parcel of real estate is owned by two or more tenants. Upon the death of a tenant in common, that share is transferred to the estate or heir of the deceased tenant. Unlike with a joint tenancy, tenants in common have no rights of survivorship. So knowing that Tina and Tom do not have a right to survivorship and are unmarried, we can assume they have a tenancy in common. The amount of interest really doesn't matter in this case.

Eminent Domain is a term used to describe the right of the government to takeover privately owned real estate usually despite the owners’ wishes. This often happens for land that is required for infrastructure like highways, major pipelines, railroads etc. The fifth and fourteenth amendments of the U.S. Constitution permit the government to exercise its power of eminent domain.

The lot and black method identifies land by reference to lot and block numbers appearing on maps or a plat map. The lot and block survey system is a method used in densely populated metropolitan areas, suburban areas and suburbs. It is sometimes referred to as the recorded plat survey system or the recorded map survey system.

Fixtures are personal property attached to the land to count as real property. Window blinds are screwed into the house, therefore they are considered a fixture in this example.

When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners. For example, if three joint tenants own a house and one of them dies, the two remaining tenants each obtain a one-half share of the property. This is called the right of survivorship.

This is a bit of a trick question. There are four main elements of a valid real estate contract: The party must be the legal age of 18 or older and deemed legally competent. The contract must be legal or hold a legal purpose. A clear and specific consideration must be included in the agreement. The contract must hold mutual consent or be agreed upon by both parties. Monetary consideration is optional. Consideration is a main element, but it doesn't necessarily have to be money. Remember, consideration is anything of legal value, it could be a promise or promise to perform an action.

The surface rights are the rights to use the surface of the earth. Subsurface rights are the rights to the natural resources lying below the earth's surface. Interestingly an owner may transfer rights without transferring the subsurface rights. For example, a landowner can sell his rights to an oil and gas company in his land but still can own the land itself.

Deed restrictions are limitations to the use of the property imposed by a past or current owner and are usually legally binded forever. Some common examples of deed restrictions are: Type and number of trees you can remove from the property, house color, window size, overall style, color, and construction materials used in a renovation.

Special use properties are properties that are there to "benefit the public," such as: Schools, Hospitals and Police Stations. These properties are described as different, because they are usually designed in a way that cannot fit in a typical zone. More examples include of religious facilities, nursing homes, assisted living facilities, hotels, truck terminals, meat processing plants, seed plants, and more. Think multiple buildings, large areas, etc.

Housing prices tend to rise with inflation. While the economy is experiencing inflation, interest rates typically rise and housing prices rise. There is a correlation between inflation and house prices. In fact, there are correlations between inflation and any good with a limited supply. When interest rates are low, buying homes can be more affordable and increase the demand for homes. If the supply of homes remains constant and the demand increases, then the prices of homes will increase.

Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A corporation has certain rights, privileges, and liabilities beyond those of partnerships. Doing business as a corporation has its advantages and disadvantages. Because a corporation is a legal entity, it can purchase property. One large disadvantage especially when it comes to corporations is when owning income producing property they experience double taxation. Since its a legal entity they must pay taxes on profits. Dividends from the remaining corporate profits are then distributed to the shareholders and then taxed again as part of the shareholder's income.

The alienation clause is a contract provision that comes into effect when ownership of a specified asset is transferred or sold. It ensures that if a transfer of property happens the lender is paid in full from the original borrower. It's a legal clause lenders add for protection.

The assessed value is a property's determined valuation to calculate the appropriate tax rates.

Tenancy at Will is a property tenure that can be terminated at any time by either the tenant or the owner or landlord. It exists without a contract or lease and usually does not specify the length of a tenant's duration or the exchange of payment. If you do not have a lease, but you do have your landlord's permission to live in your apartment, you are a tenant at will.

A property owner or homeowner can sue to obtain the required just compensation through the process of inverse condemnation. Inverse condemnation is the event in which the government takes private property but fails to pay compensation or just compensation. Read More Here

The Department of Business and Professional Regulation is the agency charged with licensing and regulating State of Florida businesses and professionals, such as cosmetologists, veterinarians, real estate agents and pari-mutuel wagering facilities.

The execution date or date executed is the day the contract is signed. The effective date is the day the contract goes into effect. Both dates can both be found in a contract. In many instances, the execution and effective dates are the same; however, that is not the case in some circumstances. You might sign a lease today to move into an apartment, but you won’t be able to move in until the following week. The execution date might be today, but the effective date will be when you move into your brand new home. Many times, the execution date and effective date are the same, but again not always.

Think of supply and demand like a scale usually if one side raises, the other will lower or vice versa. Generally, low supply and high demand increase price. In contrast, the greater the supply and the lower the demand, the price tends to fall. So in real estate terms, when the supply of available houses in an area decreases significantly the average cost of housing goes up.

$10,000 ($5,000 for each offense). The maximum fine the Florida Real Estate Commission can impose against a licensee who is found to be guilty of TWO violations is $10,000 per F.S. 475.

An agent must reveal all property facts and defects known at the point of sale. A failure to disclose this information may allow the buyer to rescind the contract.

In this example the answer is 18 months. Established business relationship means a relationship between a seller and a consumer based on….. “ the consumer's purchase, rental, or lease of the seller's goods or services or a financial transaction between the consumer and seller, within the eighteen (18) months.” Per 16 CFR 310.2

FREC members are appointed for a 4-year term. Members may not serve more than two consecutive terms, although there is no maximum number of years they may serve as long as no more than two terms are consecutive.

Color of title refers to a claim to title that appears to be legally valid but may be defective. This legal concept is often discussed in adverse possession claims. If adverse possession is claimed under color of title, usually the claims are met sooner or in an easier fashion. Read More Here

Property tax is an ad valorem tax assessed on real estate by a local government and paid by the property owner. Public services for real estate owners are paid by real property tax.

In real estate, the increase of the actual land via a stream, lake or sea by the action of water which deposits soil upon the shoreline is accretion.

A less than freehold estate (also known as a leasehold estate) is an estate held by one who rents or leases property. The key difference between a leasehold estate and a freehold estate is the limitation of time. As lease is a legal estate, leasehold estate can be bought and sold on the open market.

Fixing is the practice of setting the price of a good or service to make a particular price a standard. So in our terms, real estate fixing is when competing agents meet up and agree on the same commission rates. Typically agencies set their commission rates depending on the price of the property. Any agreement even if it just implied with other brokerages to set a standard commission rate is a violation of the antitrust laws.

Home inspection contingencies are one of the most common home buying contingencies. According to NAR, around 80% of homebuyers include a home inspection contingency in their purchase agreement. Financing is right behind it, as it allows the buyer to terminate the contract if they cannot obtain a loan.

The subordination clause in real estate establishes order of priorities of financial claims (liens). The subordination clause effectively makes the current claim number 1 to any existing claims that have already been recorded.

In order to qualify for the Fair Housing Act’s "Housing for Older Persons" Exemption, at least 80 percent of the units must have at least one occupant who is 55 years of age or older OR all units are occupied by residents over the age of 62.

The Residential Lead-Based Paint Hazard Reduction Act was established in 1996. Real estate agents must be aware of this federal law providing homes before 1978 the following: an agreement of sale/lease with lead warning statement and statement allowing prospective buyers 10 days obtain certified inspection/assessment before purchase obligation or must disclose info. about existing lead paint to purchaser AND provide purchaser federal gov't prepared lead hazard brochure.

Fixtures, easements, and mineral rights are all examples of real property - a mortgage is not. Real Property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line. There are some exceptions of items that can be moved but are still real property, like for businesses. Business-related items like mineral rights, or if you own a farming business it would include crops, barns, and stables. Those are all considered real property because it is part of the business.

Novation is the procedure in which an original contract is terminated and replaced with a new one. The legal process of novation makes it possible to transfer all contract benefits and liabilities from previous parties to a set of new ones. In plain terms, it’s a simple way to replace an old contract with a new one while maintaining most or all of its original properties. When you see any name transfers just think novation.