Free Massachusetts Real Estate Practice Exam

Q1.Which community type is legally permitted to restrict residency to adults and exclude families with children under the Fair Housing Act?

• A.Any rental property where the owner personally lives on-site
• B.Qualified 55+ or 62+ senior housing communities that meet HUD's published requirements
• C.Any private club that restricts its membership to adults
• D.Any landlord who owns fewer than 4 rental units

Q2.Under Massachusetts law, specifically M.G.L. c. 112, §87AAA, if a licensed real estate salesperson wishes to conduct real estate business independently without affiliation with a broker, which of the following is true?

• A.A salesperson may not conduct real estate business independently; the salesperson's license must be held by and operate under a licensed broker at all times.
• B.A salesperson with five or more years of active experience may apply for an independent salesperson's permit from the Board, allowing solo practice.
• C.A salesperson may operate independently provided they maintain an active errors and omissions insurance policy with minimum coverage set by the Board.
• D.A salesperson may conduct limited real estate transactions independently if the transaction involves only residential property with fewer than four units.

Q3.A consumer obtains a court judgment against a licensed Massachusetts real estate broker for fraudulent conduct in a transaction and seeks payment from the Massachusetts Real Estate Recovery Fund. Which of the following correctly describes the effect on the broker's license once a payment is made from the Fund on the broker's behalf?

• A.The broker's license is automatically suspended until the full amount paid from the Fund is repaid with interest, and the license may not be reinstated until repayment is complete
• B.The broker receives a written reprimand but the license remains active so the broker can continue to earn commissions to repay the Fund
• C.The broker's license is placed on inactive status for one year and is automatically reinstated upon expiration of that period
• D.The broker must complete 30 additional hours of continuing education before the license can be used again

Q4.Two friends purchase an investment property as joint tenants. One friend dies. What happens to her ownership interest?

• A.Her interest passes to her heirs through her estate
• B.Her interest is split equally among all surviving relatives
• C.Her interest is sold by the estate and proceeds distributed
• D.Her interest automatically transfers to the surviving joint tenant through the right of survivorship, bypassing probate

Q5.A tenant with a mobility impairment requests permission from her landlord to install a grab bar in the bathroom of her rented apartment. Under M.G.L. c. 151B, which of the following represents the landlord's correct obligation?

• A.The landlord must install the grab bar at the landlord's own expense because it is a required reasonable accommodation.
• B.The landlord must allow the tenant to make the modification at the tenant's expense and may require the tenant to restore the premises to its original condition upon vacating.
• C.The landlord may refuse the modification because structural changes are never required under Massachusetts fair housing law.
• D.The landlord must allow the modification only if the building contains six or more units.

Q6.An investor purchases a duplex for $180,000 and receives monthly rental income of $1,200 per unit. What is the gross rental multiplier (GRM) for this property?

• A.150
• B.7.5
• C.6.25
• D.12.5

Q7.A broker is reviewing a credit application submitted by a self-employed borrower on behalf of the borrower's lender referral. The lender denies the application and the borrower asks the broker why. The broker knows the Equal Credit Opportunity Act applies. Which of the following statements correctly describes a creditor's obligation under ECOA regarding notification of an adverse action?

• A.The creditor must provide written notice of the adverse action within 30 days of receiving a completed application, and the notice must state the specific reasons for denial or advise the applicant of the right to request those reasons.
• B.The creditor must provide verbal notice of the adverse action within 10 business days and is not required to state reasons unless the applicant specifically requests them in writing.
• C.ECOA requires adverse action notice only when the applicant is a member of a protected class; denial of a non-protected applicant requires no formal notice.
• D.The creditor must provide written notice within 60 days and may cite only credit-score-related factors without disclosing underwriting guidelines.

Q8.Under the Truth-in-Lending Act (TILA), if a lender fails to provide the required loan estimate within three business days of receiving a complete loan application, what remedy is available to the borrower?

• A.The borrower can cancel the contract without penalty
• B.The lender must pay statutory damages to the borrower
• C.The loan application is automatically approved
• D.The interest rate must be reduced by 1%

Q9.A Massachusetts buyer's agent is representing a buyer in the purchase of a property that the agent personally owns. Under 254 CMR 3.00, what must the agent do before proceeding?

• A.Terminate the agency relationship and allow the buyer to find new representation before making any disclosure.
• B.Disclose the personal ownership interest in writing to the buyer and obtain the buyer's informed written consent before proceeding.
• C.Disclose the interest verbally at the time of showing and document the conversation in the transaction file.
• D.No special disclosure is required as long as the sale price is at or above the current assessed value.

Q10.A Massachusetts real estate salesperson's license has lapsed because she failed to renew it before the expiration date. She contacts the Board of Registration of Real Estate Brokers and Salespersons approximately eight months after expiration. Under Massachusetts law, which of the following MOST accurately describes her situation?

• A.She may renew her expired license by paying a late fee and completing any outstanding continuing education, without retaking the licensing examination
• B.Because more than six months have passed since expiration, she must retake and pass the PSI licensing examination before her license can be reinstated
• C.She may reinstate her license at any time within two years of expiration solely by paying a reinstatement fee
• D.Her license is permanently revoked once it has been expired for more than 30 days, and she must apply as a new applicant

Q11.Under CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act), which party can be held liable for environmental cleanup costs?

• A.Current owners, past owners, operators, and transporters of hazardous substances
• B.Only the party that originally caused the contamination
• C.Only current property owners
• D.Only parties who knowingly participated in creating the contamination

Q12.A buyer suffers a financial loss due to the fraudulent conduct of a licensed Massachusetts real estate salesperson. The buyer obtains a court judgment against the salesperson but is unable to collect. The buyer then files a claim against the Massachusetts Real Estate Recovery Fund. Which of the following statements correctly describes the effect on the salesperson's license once the Fund pays the claim?

• A.The salesperson's license is automatically suspended upon payment from the Fund and cannot be reinstated until the salesperson repays the full amount disbursed, plus interest.
• B.The salesperson's license is placed on probation for two years, after which the license is automatically reinstated without repayment.
• C.The salesperson may continue to practice while on a payment plan approved by the Board, with no automatic suspension triggered.
• D.The Fund pays the claim, and the salesperson's license is unaffected because the Fund is designed to be a no-fault consumer remedy.

Q13.A mortgage lender refers all of its minority loan applicants to a subsidiary company for mandatory credit counseling sessions that carry a $350 fee, while similarly situated white applicants are not required to attend or pay for such counseling. A broker whose brokerage regularly works with this lender becomes aware of the practice through client complaints. Under the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act, which statement most accurately describes this situation and the broker's professional obligations?

• A.The lender's practice constitutes unlawful discrimination under both ECOA and the FHA; the broker has an ethical and potentially legal obligation to cease referring clients to this lender and should advise affected clients of their right to file complaints with the CFPB and HUD.
• B.The practice is permissible because credit counseling is a legitimate underwriting tool and the lender has discretion to determine which applicants require it based on internal risk models.
• C.Only the lender faces liability; the broker has no duty to act because the discriminatory conduct occurs after the real estate transaction closes and is outside the broker's scope.
• D.The broker should continue the referral relationship but document client complaints to satisfy record-keeping obligations, as the FHA does not cover post-application lending practices.

Q14.Under the Equal Credit Opportunity Act (ECOA), which factor would be legally permissible for a lender to consider when evaluating a mortgage loan application?

• A.The applicant's plans for having children in the future
• B.The predominant race of residents in the neighborhood where the property is located
• C.The applicant's debt-to-income ratio and credit score
• D.Whether the applicant receives alimony or child support payments

Q15.A Massachusetts listing broker learns, through a conversation with the seller, that the property's basement has experienced repeated flooding during heavy rainstorms, though there is no visible evidence of water damage at the time of showing. What is the broker's legal obligation under Massachusetts consumer protection principles?

• A.The broker has no duty to disclose because the condition is not currently visible and the seller has not authorized the broker to share confidential information.
• B.The broker must disclose the known material defect to prospective buyers because concealing it could constitute an unfair or deceptive practice under M.G.L. c. 93A.
• C.The broker's only obligation is to recommend that the buyer obtain a home inspection, after which all disclosure duties are satisfied.
• D.The broker must report the flooding issue to the Board of Registration of Real Estate Brokers and Salespersons before listing the property.