Free New York Real Estate Practice Exam Questions (November 2024) 75+

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.

Real Property Law, Section 441-c allows the Department of State to revoke, suspend, fine, or reprimand a real estate broker or salesperson if warranted.

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.

The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The EPA was established in December 1970 by an executive order of United States President Richard Nixon. The agency enforces all federal environmental rules and regulations.

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. Any agreement even if it just implied with other brokerages to set a standard commission rate is a violation of the antitrust laws.

Dividing Territories is when competing brokers agree to split territories, and divide interests accordingly. This is a clear antitrust violation.

Conspiracy to Boycott occurs when two or more persons or entities conspire to restrict the ability of someone from competing. Another clear antitrust violation.

Selling property you listed to someone who resides in more than one state over is not a violation and is legal.

They can’t. Their license is expired. In other words, there is no grace period for expired licenses.

Void contracts are not contracts because they lack an essential element of a contract and are thus unenforceable. Voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects.

A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual.

Regarding real estate licenses reciprocity, New York has reciprocity agreements with the following states: Arkansas, Colorado, Connecticut, Georgia, Massachusetts, Mississippi, Oklahoma, Pennsylvania, West Virginia.

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.

An addendum would be drafted to include the furniture he is purchasing, and any additional charge(s) for that furniture. Remember an addendum ADDS terms to a contract. An amendment typically changes terms of a contract. There is a difference, make sure to understand it!

Compliance with zoning ordinances is monitored through the issuance of zoning permits; where the property owner or developer cannot substantially alter the use of the property without getting a zoning permit, which will not be issued unless the proposed development conforms to the zoning ordinance. Zoning permits are usually required before building permits can be issued.

So in short, commingling refers to the act of mixing a client's funds with the broker’s own funds. Conversion is the unlawful misappropriation and use of a client’s funds by a licensee, see the difference? If your state allows commingling, and you misappropriate the funds, that's conversion. It's worth mentioning, both illegal commingling and conversion lead to criminal penalties and severe consequences.

A borrower is a mortgagor while the lender is the mortgagee. A mortgagee is an entity that lends money to a borrower (also known as a mortgagor) for the purpose of purchasing real estate.

The person who hires or appoints an agent is called the principal. In plain terms, the principals in a real estate sales transaction would be the buyer and the seller.

A mortgagee is an entity that lends the mortgagor money. This entity is typically referred to as the lender.

Puffing is an extravagant claim made by sellers in order to attract buyers. Puffing is usually common for a lot of sales people. Real estate agents included. It’s one of those things that occur often. It happens in ads, stores, and pretty much everywhere sales happen. Puffing is legal as long as the statements are not fraudulent. Read More Here

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.

The Federal Fair Housing Act is a law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more. You cannot have a listing that states looking for white people only. Or looking for married couples without children only. The interesting thing is though you can put language referring to sex. For example “Seeking female roommate.” However, it's only in cases of finding someone to share living spaces with. The “Mrs. Murphy” exemption provides that if a dwelling has four or fewer rental units and the owner lives in one of those units, that home is exempt from the FHA. “Mrs. Murphy” is the hypothetical elderly widow who has converted a portion of her home into a rental apartment to supplement her limited income.

The rectangular survey system consists of principal meridian lines that cover most states in the US, running north to south and baselines running east to west. These principal meridian lines are named or numbered to identify their location. Using those lines for references, quadrangles are formed, which are smaller squares identifiable by where they are located near the principal meridian and baseline. This process continues, creating a smaller and smaller grid that can be used to identify the specific location of any property.

Equal Credit Opportunity Act (ECOA) is a regulation that aims to give all legal individuals an equal opportunity to apply for loans. The act prohibits creditors and lenders from considering a consumer’s race, color, national origin, sex, religion or marital status in deciding whether to approve their credit application. This act protects consumers from being wrongfully discriminated. No matter what type of person applies for a loan they cannot be turned away due to factors that are not directly related to their credit.

Communication of acceptance, because once acceptance is communicated to the offeree an executory contract is formed. Acceptance with communication does not create a contract, all parties must sign the offer to create a valid contract.

Partition is a term used in real estate to describe an act, by a court order, to divide up a concurrent estate into separate portions representing interests of the owners of a property.

The acceleration clause is a contract provision that requires a borrower to repay all of an outstanding loan if upon a breach of the contract.

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.

Under riparian rights, all landowners whose properties adjoin a river or stream, have the right to make reasonable use of it as it flows through or over their properties. The only limitation owners have is they cannot stop or prevent the flow of water. Riparian rights vary from state to state but most grant unrestricted use. Unrestricted use means owners have the right to access it for swimming, boating, and fishing, build docs, etc. Read More Here

Frontage is the boundary between a plot of land or a building and the road onto which the plot or building fronts. Frontage may also refer to the full length of this boundary. This length is considered especially important for certain types of commercial and retail real estate, in applying zoning bylaws and property tax.

A satisfaction of mortgage is a document that confirms a mortgage has been paid off and details the provisions for the transfer of collateral title rights.

Demand is an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service (holding all other factors constant).

The principal is always the one whom you have an agency relationship with and therefore is the person whom you owe fiduciary responsibility.

Don’t overthink this. He is no longer the listing agent, he MUST inform the caller that information. Anything else would be deemed unethical and potentially illegal.

Encroachment is an intrusion on a person's territory or property. For those of you who are football fans, it's pretty much the same thing as the penalty. If a tree grows over someone's property, or when a fence or another piece of your neighbor's property crosses the property lines. Those are all examples of encroachment. Encroachment can lead to some large legal issues and if there are potential encroachment owners and agents should seek a solution immediately.

States may require additional information, but federally at the minimum, all advertising for property or services must include the broker firm's name. This is all for all advertising, social media included.

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 general warranty deed offers the grantee the most protection. General warranty deeds protect homeowners from stakes and claims from previous people, from the beginning of time to right now. It also protects homeowners from any potential encumbrances. A general warranty deed grants an undeniable fact that this property is coming with no liens and no heirs they could potentially lay claim to the piece of property. Read More Here

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.

The principle of anticipation in appraisal is the principle that the value of property today is the present value of the sum of anticipated future benefits. It’s also worth noting that the principle of anticipation doesn’t always refer to monetary gain. It could also be emotional or mental gain.

Liquidated damages are most likely to be found in purchase contracts. Remember, liquidated damages are the amount agreed to in advance that will compensate a party for any loss they suffer on a purchase contract.

Weather-related issues and normal wear-and-tear are generally not included in a builder's home warranty. Other items that a builder's warranty may not cover include: Household appliances. Defects resulting from work conducted by the homeowner or anyone else after the builder's work is completed. No warranty covers damages caused by natural disasters.

The New York Department of Health oversees the delivery of drinking water to ensure that it is suitable for people to drink.

The New York State Board of Real Estate was established pursuant to §442-i of the Real Property Law. It has fifteen members.

Commingling refers to mixing brokers funds with clients funds. The opposite of commingling is separation, which is just separating the funds.

Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. A liquidated damages clause specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract.

If a seller rejects a written offer made by a buyer, changes the terms of the offer, and has the new offer delivered to the buyer, this would be considered a counteroffer.

New York 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.

An addendum is an attachment to a contract that modifies the terms and conditions of the original contract. An example of an addendum being used would be if the parties wanted to add something to the original document. For instance, an individual who is purchasing a house may not want to purchase all of the furniture that is being left behind. However, after thinking about it further, he changes his mind.

The New York State Board of Real Estate is composed of fifteen members, each of whom shall be appointed by the Governor.

Closing is the final step in executing a real estate transaction. It is when official ownership and payment is transferred to the rightful parties. The fees that the buyer pays to close the deal are called closing costs.

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

This is an example of a balloon loan. A balloon loan is a mortgage which does not fully amortize over the term. Amortization is when payments divide into equal amounts for the duration of the loan. A balloon loan is different as not all payments are the equally divided and the most substantial payments are called Balloon payments.

Constructive eviction is a term used in the law of real property to describe when a landlord sidesteps the formal, legal eviction process, and instead attempts to force the eviction of the tenant by rendering the property uninhabitable. A tenant who is constructively evicted may terminate the lease and seek damages.

Depreciation. Only the Cost Approach valuation process uses depreciation.

The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities in several areas, including employment, transportation, public accommodations, communications and access to state and local government' programs and services. The act specifically requires reasonable accommodations must be provided to people with disabilities.

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.

In this situation, the new offer cannot be accepted unless the seller's counteroffer is withdrawn or hypothetically rejected. Remember, if a new offer is accepted two valid contracts could exist, so the first step must be to withdraw the counteroffer.

The correct statement is: “In title theory states, banks or mortgage lenders hold the title of a property until it is paid in full. In lien theory states, however, banks or mortgage lenders never retain title to the property.” In lien theory states banks or mortgage lenders never retain title to the property. Instead, the mortgage lender holds a lien against the property.

The statute of frauds is a common law concept that requires written contracts for certain agreements to be legally binding. The statute applies to land sales and most purchases of goods over $500 (this includes real estate sales agreements). This is a bit of a trick question. There are some circumstances in real estate where a written contract is not required, so it is not ALL real estate contracts, but it is ALL real estate sales agreements.

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

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

In this example the answer is 3 months. Established business relationship means a relationship between a seller and a consumer based on….. “ the consumer's inquiry or application regarding a product or service offered by the seller, within the three (3) months.” Per 16 CFR 310.2

Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.

The market data approach, also known as the sales comparison approach, involves comparing a property to other recently sold properties in the same area of similar size and condition. For residential real estate, the market data approach is typically regarded as the most accurate comparison method.

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.

A real estate option contract is a one-of-a-kind contract that is solely between the seller and the buyer. In this arrangement, the seller gives the buyer the option to purchase property at a given price for a set period.

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.

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.

In an exclusive right to sell listing the agent gets paid no matter who sells the property, regardless of whether it’s the agent or the seller. Knowing this, it's safe to assume this was an exclusive right to sell listing.

Remember, community property and tenants by the entirety is through marriage. You can't have that form of ownership with two unmarried individuals. Joint tenancy would be the best answer. Tenancy in common significantly differs from a joint tenancy, particularly in terms of survivorship rights and the degree of ownership each tenant has. Unlike with a joint tenancy, tenants in common have no rights of survivorship. So knowing that Tony and Taylor have a right to survivorship and are unmarried, we can assume they have a joint tenancy. The amount of interest really doesn't matter in this case.

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.

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.

A real estate agent is a professional who has passed the required real estate classes and licensing exams in the state where he/she intends to work. This is the starting point for most real estate professionals agents. Agents are also legally called a licensee or license holder.

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.

A cash reserve fund is an account set aside by an individual or business to meet any unexpected future costs, as well as the future costs of upkeep. Property managers use these funds for variable expenses.

Service Contracts are agreements between a customer or client and a person or company who will be providing services. A listing agreement is a service contract between the seller and the broker, or brokerage company.

Disclosure statements, purchase contracts, and exclusive agency contracts are all legal documents but it is the listing agreement that clearly defines the relationship between the broker and seller.