Free Montana Real Estate Practice Exam

Q1.Under federal law, sellers of residential property built before 1978 must:

• A.Disclose known lead-based paint and hazards and provide an EPA pamphlet; buyers get a 10-day inspection period
• B.Test for lead paint before listing
• C.Remediate all lead paint before closing
• D.Obtain a lead clearance certificate from a licensed contractor

Q2.During a routine audit, a state licensing agency discovers that a broker's trust account records fail to reconcile with the client ledger and bank statements — a violation of the broker's recordkeeping obligations. Beyond license discipline, which additional administrative remedy is most commonly available to the licensing agency under typical state regulatory frameworks?

• A.Imposition of an administrative fine assessed per violation, in addition to any license suspension or revocation.
• B.Filing a civil lawsuit on behalf of harmed clients to recover compensatory and punitive damages from the broker.
• C.Ordering the broker's lending institution to freeze all firm accounts pending a court order.
• D.Requiring the broker to immediately dissolve the brokerage entity and surrender the firm's corporate charter.

Q3.Under Montana law, a broker who manages residential rental property must keep trust account records available for inspection by which agency?

• A.The Montana Department of Revenue
• B.The Montana Board of Realty Regulation
• C.The Montana Department of Commerce's Housing Division
• D.The Montana Attorney General's Office

Q4.A Montana seller's agent learns during a listing appointment that the property has a history of a leaking basement that was never professionally repaired. Under Montana's property disclosure requirements, the listing broker must:

• A.Disclose this known material defect to prospective buyers, regardless of the seller's instructions to the contrary
• B.Keep this information confidential as part of the fiduciary duty owed exclusively to the seller
• C.Disclose the defect only if the buyer specifically asks about the basement in writing
• D.Recommend that the seller fill out the Montana Seller's Property Disclosure form but take no further action

Q5.A tenant with a documented disability asks the landlord to allow a live-in caregiver in a unit normally limited to two unrelated adults. The landlord refuses, citing the occupancy rule. Has the landlord violated the FHA?

• A.Yes — failing to grant a reasonable accommodation (waiving the occupancy rule for a caregiver) is itself a violation
• B.No — occupancy limits are facially neutral
• C.Only if the caregiver is a relative
• D.Only if the unit has more than two bedrooms

Q6.Under Montana law and the Montana Board of Realty Regulation rules, a property manager who collects security deposits from tenants must handle those funds in which of the following ways?

• A.Deposit them into the broker's general operating account within five business days
• B.Hold them in the property manager's personal savings account until the lease expires
• C.Deposit them into a separate trust account maintained by the broker
• D.Forward them directly to the property owner within three days of receipt

Q7.In Montana, a licensee is PROHIBITED from commingling client funds with personal or operating funds. Which of the following actions would constitute commingling under Montana law?

• A.Depositing an earnest money check into a separate federally insured trust account maintained by the broker
• B.Placing a buyer's earnest money deposit into the broker's general business operating account to hold until closing
• C.Keeping a small interest-bearing trust account at a Montana-chartered bank for client deposits
• D.Returning an earnest money deposit to the buyer by check drawn on the trust account after a transaction falls through

Q8.After an agent terminates employment at a brokerage following a harassment complaint, the brokerage's fair housing liability:

• A.Ends automatically when the agent is terminated
• B.Transfers entirely to the former agent
• C.Is resolved as long as the broker cooperates with HUD's investigation
• D.Continues — the brokerage remains the respondent in any pending complaint

Q9.A Montana salesperson working under a broker's supervision enters into a buyer representation agreement using a form that has not been approved by, or reviewed with, the supervising broker. The buyer later claims the agreement contained materially misleading terms. Under MCA §37-51-313, which of the following best describes the broker's potential exposure?

• A.The broker has no liability because the salesperson, not the broker, drafted and presented the agreement.
• B.The broker is insulated from discipline because buyer representation agreements are not required to be in writing under Montana law.
• C.The broker may be subject to disciplinary action for failing to supervise the salesperson's use of contracts and agreements in the conduct of real estate activity.
• D.The broker's liability is limited solely to civil damages and does not extend to license discipline by the Montana Board of Realty Regulation.

Q10.A broker's affiliated salesperson, without the broker's knowledge, steers a Hispanic couple away from listings in a predominantly white neighborhood and exclusively shows them properties in a majority-Hispanic area. Under the Fair Housing Act, which of the following most accurately describes the broker's potential liability?

• A.The broker has no liability because the salesperson acted without authorization and outside the scope of supervision.
• B.The broker may be held vicariously liable under agency principles if the salesperson was acting within the scope of employment, and HUD may also pursue the broker for failure to establish and enforce an adequate fair housing compliance program.
• C.The broker is only liable if the broker personally directed the steering activity or had actual knowledge before it occurred.
• D.The broker is shielded from liability because the Fair Housing Act only imposes personal, non-delegable duties on individual licensees, not brokerages.

Q11.Which type of title insurance policy protects the lender's interest in the property?

• A.Mortgagee's policy
• B.Owner's policy
• C.Extended coverage policy
• D.Leasehold policy

Q12.Under the doctrine of after-acquired title, if a grantor conveys property they do not own and later acquires title to that property, what happens?

• A.The original deed becomes void
• B.Title automatically passes to the original grantee
• C.A new deed must be executed
• D.The grantor retains title permanently

Q13.In Montana, a real estate salesperson wishes to collect a commission directly from a seller after helping the seller find a buyer. Under Montana law, which of the following is correct?

• A.A salesperson may collect a commission directly from any party to a transaction with the client's verbal permission.
• B.A salesperson may only receive compensation through their supervising licensed broker.
• C.A salesperson may collect a commission directly if the amount is disclosed in the listing agreement.
• D.A salesperson may collect a commission directly from a seller as long as the broker receives their split afterward.

Q14.A buyer files a HUD complaint alleging a licensee refused to show homes in certain neighborhoods. HUD investigates and finds reasonable cause. What happens next if both parties don't elect federal court?

• A.The complaint is dismissed
• B.The case proceeds before a HUD Administrative Law Judge, who may award damages, civil penalties up to ~$24K (first offense), and injunctive relief
• C.The case is automatically referred to a criminal prosecutor
• D.Only state-court remedies remain

Q15.Under Montana Board of Realty Regulation rules, how quickly must a property manager deposit a tenant's security deposit or rental payment into the required trust account after receiving it?

• A.Within 24 hours of receipt
• B.Within a reasonable time, which the Board's rules define as no later than the next banking day
• C.Within 10 calendar days of receipt
• D.By the end of the same calendar month in which it was received