1. Smith owns a large tract of land in a city. She wants to subdivide the tract. Which of the following should she do first?
A. Prepare a plat of the subdivision.
B. Dedicate land for streets and parks.
C. Check the appropriate ordinances and statutes. Correct
D. Plan the street and clustering patterns for the subdivision.
Explanation
Before any subdivision planning or plat preparation, the developer must first research and understand the local zoning ordinances, subdivision regulations, and state statutes governing land development. These laws dictate requirements for lot sizes, street widths, utility easements, dedications, environmental impact, and the approval process. Failure to comply can result in costly redesigns, delays, or denial of the project. Starting with this step ensures the project is legally feasible and aligns with all governing rules from the outset. **INCORRECT CHOICES: A** Preparing a plat is a detailed technical step that comes later in the process, after understanding legal requirements and preliminary planning. **B** Dedicating land for public use is a formal step that occurs after a plat is approved by the municipality. **D** Planning street patterns is part of the design phase, which should be informed by and conform to the ordinances and statutes checked in step C.
2. Which of the following is an objective of a property manager?
A. Retaining good tenants Correct
B. Arranging for refinancing of the property
C. Screening prospective tenants to achieve a racial balance among tenants
D. Collecting 2-month's security deposit for each tenant
Explanation
A primary objective of property management is to maximize the owner's return on investment, which is significantly enhanced by minimizing vacancy and tenant turnover costs. Retaining good, stable tenants reduces income loss, re-leasing expenses (advertising, screening, cleaning), and property damage. Effective management, responsive maintenance, and good tenant relations are key to retention. **INCORRECT CHOICES: B** Arranging refinancing is typically a function of the property owner or their financial advisor, not the property manager's core duty. While a manager might provide financial statements, they don't arrange loans. **C** Screening to achieve a racial balance is illegal under the Fair Housing Act. Tenants must be screened based on objective, non-discriminatory criteria (credit, income, rental history). **D** While collecting a security deposit is standard, the amount (e.g., 2 months) is often dictated by state law or market practice, not a universal objective. The manager's objective is to collect deposits in accordance with the law and lease terms.
3. Under what conditions may a salesperson accept a bonus offered by a seller for services rendered?
A. The salesperson receives payment directly from the seller.
B. The salesperson has the broker's approval.
C. The seller pays the bonus to the broker, who passes it on to the salesperson. Correct
D. Under no circumstances
Explanation
In nearly all jurisdictions, real estate license law requires that all compensation for real estate services flow through the broker with whom the salesperson is affiliated. The broker is responsible for supervising transactions and ensuring proper handling of funds. Therefore, any bonus must be paid to the broker, who then disburses it to the salesperson per their employment or independent contractor agreement, after ensuring the payment is proper and recorded. **INCORRECT CHOICES: A** Accepting payment directly from a party (seller, buyer, lender) is typically a serious license law violation, as it bypasses the broker's supervision and fiduciary responsibility. **B** While broker approval is necessary, it is not sufficient on its own; the payment must still be processed through the broker's office. **D** Bonuses are permissible if handled correctly through the broker, so it's not "under no circumstances."
4. An owner lists a property with a broker through an associate broker. The agency relationship and listing would continue even if the
A. Associate broker dies. Correct
B. Employing broker dies.
C. Property is destroyed by fire.
D. Owner is declared mentally incompetent.
Explanation
The death of an associate broker (or salesperson) does not terminate the listing agreement or the agency relationship between the seller and the employing (principal) broker. The employing broker's firm remains the agent, and the broker can assign another agent within the firm to handle the listing. The contract is with the brokerage, not the individual agent. **INCORRECT CHOICES: B** The death of the employing (principal) broker may terminate the agency relationship and listing if the brokerage is a sole proprietorship that dissolves upon the broker's death. If the brokerage is a corporation or LLC, it may continue. However, it often creates a situation where the listing may be voidable. **C** The destruction of the property by fire typically renders the contract impossible to perform and frustrates its purpose, allowing for termination of the listing agreement. **D** If the owner is declared mentally incompetent, the listing agreement, which is a personal services contract, may be voidable by the owner's legal guardian because the owner lacked the capacity to contract at the time of signing or loses capacity to direct the agent.
5. Which of the following actions is NOT a cause for suspension or revocation of a New Jersey real estate license?
A. Failing to provide a client with a copy of the signed exclusive listing contract
B. Delivering a consumer information statement to a seller after having made a listing presentation Correct
C. Payment of a referral fee by a licensed New Jersey broker to a broker licensed in another state
D. Collecting a commission as a broker from both parties to a transaction while representing both parties as their agent
Explanation
The New Jersey Consumer Information Statement (CIS) must be presented to a prospective seller "at the time of the first personal meeting" to discuss listing the property. Delivering it *after* the listing presentation is a timing violation but is typically considered a minor offense that might result in a fine rather than suspension or revocation, especially for a first offense. It is a violation, but not necessarily one of the most severe ones listed. **INCORRECT CHOICES: A** Failing to provide a client with a copy of a signed contract is a violation of license law and fiduciary duty, potentially leading to disciplinary action. **C** Paying a referral fee to an unlicensed person (or a broker not licensed in NJ for a NJ transaction) is generally prohibited and can lead to serious penalties. **D** Collecting a commission from both parties without both parties' informed, written consent (i.e., acting as a disclosed dual agent with agreement) is a breach of fiduciary duty and a major ethical and legal violation that can result in license suspension or revocation.