Free Hawaii Real Estate Practice Exam

Q1.A seller in Hawaii wants to convey a Land Court-registered property to a buyer. Which document is used to transfer ownership within the Land Court system?

• A.A standard warranty deed recorded at the Bureau of Conveyances
• B.A Transfer Certificate of Title issued by the Assistant Registrar of the Land Court
• C.A Land Court Transfer Instrument filed with the Office of the Assistant Registrar
• D.A quitclaim deed submitted to the Bureau of Conveyances with a conveyance tax certificate

Q2.A Hawaii real estate salesperson is acting as a buyer's agent. During a showing, the salesperson notices that the foundation of the property shows visible cracking that the seller has not disclosed. Under HRS Chapter 467, what duty does the salesperson owe to the buyer client in this situation?

• A.The salesperson should report the observation only to the listing agent and allow the listing agent to determine whether to disclose it to the buyer
• B.The salesperson must promptly disclose the observed foundation cracking to the buyer as a material fact affecting the property's value or desirability
• C.The salesperson has no duty to volunteer information about physical conditions because the buyer should hire a home inspector
• D.The salesperson should document the cracking in the transaction file but is not required to inform the buyer unless specifically asked

Q3.A Hawaii condominium buyer's agent explains that the buyer will own an 'appurtenant' interest along with the unit itself. In the context of Hawaii condominium ownership under HRS Chapter 514B, which of the following BEST describes an appurtenant interest?

• A.The buyer's exclusive ownership of the building's structural walls surrounding the unit.
• B.The buyer's undivided percentage interest in the common elements, which runs with the unit and cannot be separately conveyed.
• C.The buyer's right to lease the unit to tenants under a sublease approved by the county.
• D.The buyer's proportional share of the condominium association's operating reserve fund held in a separate account.

Q4.A Hawaii buyer's agent is working with a customer—not a client—who is purchasing a property listed by another brokerage. Under Hawaii Real Estate Commission rules governing agency duties, which of the following duties does the buyer's agent owe to this customer?

• A.Full fiduciary duties identical to those owed to a represented buyer-client, including undivided loyalty and confidentiality
• B.Honest and fair dealing and disclosure of all material facts known to the licensee that affect the value or desirability of the property
• C.No duties whatsoever, because the licensee represents only the seller in a co-brokerage transaction
• D.A duty of confidentiality regarding the seller's asking price and negotiating position

Q5.A salesperson affiliated with a broker is representing a buyer purchasing a home in a federally designated Special Flood Hazard Area (SFHA). The salesperson is unaware of the SFHA designation. The property sale closes and the buyer later discovers mandatory flood insurance will cost $4,200 per year. Which statement BEST describes the broker's potential liability?

• A.The broker may be liable for failing to supervise the salesperson's due diligence, because SFHA status is ascertainable from FEMA flood maps and constitutes a material fact affecting the cost of ownership.
• B.The broker has no liability because flood zone determination is the lender's responsibility under the National Flood Insurance Reform Act.
• C.The broker is insulated from liability because the salesperson, not the broker, conducted the transaction.
• D.No disclosure duty exists for SFHA status because it is a public record that buyers are presumed to know.

Q6.What is the primary legal distinction between joint tenancy and tenancy in common in Arizona?

• A.Joint tenancy allows unequal ownership shares; tenancy in common requires equal shares
• B.Tenancy in common requires all co-owners to be legally married; joint tenancy does not
• C.Joint tenancy requires a separate deed for each co-owner
• D.Joint tenancy includes the right of survivorship; tenancy in common does not — each owner's interest passes through their estate

Q7.A team lead conditioning referrals and mentorship opportunities on personal social interactions with team members is an example of:

• A.Quid pro quo harassment in an internal professional hierarchy
• B.Hostile environment harassment between co-equal agents
• C.Third-party harassment by a client
• D.Neither — real estate teams are not covered by harassment law

Q8.What is the primary purpose of the Equal Credit Opportunity Act (ECOA) in real estate financing?

• A.To regulate interest rates on mortgage loans
• B.To establish minimum down payment requirements
• C.To require mortgage insurance on all loans
• D.To prohibit discrimination in lending based on protected characteristics

Q9.A broker is reviewing a transaction where a married couple in a non-community-property state is purchasing a home and intends to hold title so that, upon the death of either spouse, the survivor automatically becomes the sole owner without the property passing through probate. The couple also wants the ability to convey or encumber the property only with both spouses' consent. Which form of ownership best satisfies both requirements, and what is the broker's primary responsibility when advising them on this choice?

• A.Tenancy by the entirety, and the broker's primary responsibility is to recommend that the clients consult a licensed attorney for legal advice on title vesting while ensuring the correct ownership designation appears in the purchase contract.
• B.Joint tenancy with right of survivorship, and the broker may independently draft a customized ownership agreement that overrides state law to require mutual consent for encumbrances.
• C.Tenancy in common, and the broker should insert a survivorship clause in the deed to add right-of-survivorship protection while preserving each spouse's right to convey independently.
• D.Community property with right of survivorship, and the broker should unilaterally select this vesting on the deed because it is federally recognized in all states for married couples.

Q10.A buyer receives the Seller's Real Property Disclosure Statement five days after the seller's acceptance of the purchase contract. The buyer then discovers a material inaccuracy in the statement. Under HRS Chapter 508D, how many calendar days does the buyer have from receipt of the disclosure to rescind the purchase contract based on that disclosure?

• A.3 calendar days
• B.5 calendar days
• C.10 calendar days
• D.15 calendar days

Q11.The Truth-in-Lending Act (TILA) requires disclosure of the Annual Percentage Rate (APR) for which types of transactions?

• A.Consumer credit transactions secured by real estate
• B.Commercial loans only
• C.Cash transactions only
• D.Business credit lines only

Q12.RESPA (Real Estate Settlement Procedures Act) primarily regulates which aspect of real estate transactions?

• A.Closing costs and settlement procedures
• B.Property inspections
• C.Real estate licensing requirements
• D.Property tax assessments

Q13.In a designated agency arrangement, what happens to the confidential information shared by each party?

• A.All information must be shared between designated agents
• B.Each designated agent maintains confidentiality for their respective client
• C.Confidential information can only be shared with the broker
• D.No confidential information can be maintained in designated agency

Q14.A broker supervising a team receives a purchase offer on a mixed-use infill development site. The buyer intends to raze an existing structure built before 1978. As the supervising broker, which federal disclosure and work-practice obligation must the broker ensure the buyer is aware of before demolition begins?

• A.OSHA Hazard Communication Standard requiring material safety data sheets for all construction materials
• B.EPA's Renovation, Repair, and Painting (RRP) Rule under TSCA, requiring certified contractors and lead-safe work practices for pre-1978 structures
• C.HUD's Lead-Based Paint Disclosure Rule under the Residential Lead-Based Paint Hazard Reduction Act, which is satisfied by the seller's disclosure at contract signing
• D.CERCLA notification to the National Response Center because demolition releases lead as a hazardous substance

Q15.Which of the following properties is EXEMPT from the mandatory seller disclosure requirements of HRS Chapter 508D?

• A.A single-family home being sold by an owner who has never occupied the property
• B.A residential condominium unit being sold in a standard arm's-length transaction
• C.A transfer of real property between co-owners where one co-owner is buying out the other's interest
• D.A townhouse being sold by an estate after the owner's death where the personal representative has knowledge of defects