Free New Jersey Real Estate Practice Exam

Q1.A New Jersey broker receives a subpoena issued by the Real Estate Commission pursuant to N.J.S.A. 45:15-16.2 compelling production of all transaction files for the preceding three years. The broker's attorney advises him to produce only files from the last two years, citing the general two-year business records retention standard used in the broker's prior state. Under New Jersey law, which of the following is the most accurate statement regarding the Commission's investigative powers and the broker's recordkeeping obligation?

• A.The Commission may subpoena records going back six years under its investigative authority, and N.J.A.C. 11:5-5.4 requires brokers to retain transaction files for six years from the date of closing or termination of the transaction.
• B.The Commission's subpoena power is limited to three years of records, and the broker's attorney's two-year retention advice is therefore partially compliant.
• C.The Commission may only compel production of records through a court order, not a direct administrative subpoena, because the real estate licensing statute does not grant independent subpoena authority.
• D.New Jersey's six-year statute of limitations for contract claims implicitly limits the Commission's investigative reach to six years, but only for transactions involving written purchase agreements.

Q2.A broker who also operates as a mortgage loan originator (MLO) for transactions in which the broker represents the buyer must comply with which federal licensing requirement that is distinct from and in addition to the state real estate broker license?

• A.Registration under the Nationwide Multistate Licensing System (NMLS) and obtaining an MLO license or registration under the SAFE Act, with separate surety bond and continuing education requirements.
• B.Filing a dual-capacity disclosure with HUD under RESPA Section 8(c) is sufficient to satisfy all federal licensing obligations for the mortgage origination activity.
• C.The broker's existing state real estate license automatically authorizes mortgage loan origination activity pursuant to the Gramm-Leach-Bliley Act's functional regulation provisions.
• D.The broker must obtain a federal charter from the Office of the Comptroller of the Currency (OCC) before originating any residential mortgage loans.

Q3.Under RESPA (Real Estate Settlement Procedures Act), which practice is specifically prohibited regarding escrow accounts?

• A.Requiring borrowers to deposit two months of property taxes at closing
• B.Conducting an annual escrow analysis to adjust monthly payments
• C.Maintaining a cushion of more than two months of escrow payments
• D.Requiring flood insurance premiums to be escrowed

Q4.A buyer applies for a mortgage loan. Under the TILA-RESPA Integrated Disclosure (TRID) rules, the lender must generally provide the buyer with a Loan Estimate within how many business days of receiving a completed loan application?

• A.1 business day
• B.3 business days
• C.5 business days
• D.7 business days

Q5.A designated agent discovers that the property they are showing contains environmental contamination that would trigger CERCLA liability. Under federal environmental law, what is the agent's primary obligation regarding disclosure?

• A.Disclose all known material environmental facts that could affect the transaction
• B.Disclose only if the contamination affects the property's habitability
• C.Disclose only if specifically asked by the buyer
• D.Refer the matter to the EPA before making any disclosure

Q6.A mortgage broker receives a $500 cash payment from a title company in exchange for referring settlement business to that company. No additional services are performed by the broker for the $500. Under which federal statute is this arrangement most directly prohibited, and what is the primary consequence for the broker?

• A.TILA; the broker must refund the $500 to the borrower and restate the Annual Percentage Rate.
• B.ECOA; the broker faces civil liability for discriminatory referral practices.
• C.RESPA Section 8; the broker is subject to criminal penalties of up to $10,000 in fines and one year imprisonment, plus civil liability.
• D.The Fair Housing Act; the broker may be subject to HUD investigation and a $16,000 civil penalty for a first offense.

Q7.A New Jersey broker receives a $10,000 earnest money deposit from a buyer on a Friday afternoon. The seller has not yet signed the contract of sale. Under N.J.A.C. 11:5-2.10, what is the broker's obligation regarding this deposit?

• A.The broker must deposit the funds into the escrow account within 24 hours, regardless of whether the contract has been fully executed by all parties.
• B.The broker must hold the check uncashed and undeposited in a secure location until the contract is fully executed by all parties, after which it must be deposited in the trust account by the end of the following business day.
• C.The broker must deposit the funds into the escrow account no later than the next business day after receipt, even if the contract is not yet fully executed.
• D.The broker may hold the uncashed check for up to five business days pending contract execution; if the contract is not executed within that period, the funds must be returned immediately to the buyer.

Q8.Radon is classified by the EPA as a:

• A.Class A carcinogen and the second-leading cause of lung cancer in the U.S.
• B.Class B carcinogen requiring mandatory remediation above 2 pCi/L
• C.Nuisance pollutant with no established health threshold
• D.Regulated hazardous waste requiring state agency notification

Q9.A landlord tells a prospective tenant that an apartment has already been rented, but the unit is actually still available. The landlord makes this misrepresentation because the applicant uses a wheelchair. Which provision of the Fair Housing Act has the landlord most likely violated?

• A.Blockbusting
• B.Steering
• C.Discriminatory misrepresentation
• D.Redlining

Q10.Which of the following disclosures is a seller of residential property in New Jersey required to make to a prospective buyer under New Jersey law?

• A.The seller must disclose the property's assessed value and tax history
• B.The seller must complete a Seller's Property Disclosure Statement disclosing known material defects
• C.The seller must disclose the names of all prior owners for the past 20 years
• D.The seller must disclose whether any neighbors have complained about the property

Q11.In New Jersey, when must a licensee provide a prospective buyer with the Consumer Information Statement (CIS)?

• A.Only after the buyer has signed a buyer-representation agreement with the brokerage.
• B.At the first substantive contact with the prospective buyer, prior to any discussion of specific properties.
• C.At the time the buyer submits a written offer to purchase a property.
• D.Within 24 hours of showing a property to the prospective buyer.

Q12.CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) primarily addresses which environmental concern in real estate?

• A.Noise pollution from airports
• B.Energy efficiency standards
• C.Hazardous waste contamination and cleanup
• D.Water conservation requirements

Q13.In New Jersey, when must a licensee provide a Consumer Information Statement (CIS) to a prospective buyer or seller?

• A.Only after a purchase contract has been fully executed by all parties
• B.At the first scheduled showing of the property
• C.At the first contact with the consumer that involves a substantive discussion about a specific property
• D.Only when the consumer specifically requests information about agency relationships

Q14.Under agency law principles, when must a real estate agent disclose their agency relationship to parties in a transaction?

• A.Only when specifically asked by the unrepresented party
• B.At the time of first substantive contact about specific property
• C.Only at the time of presenting an offer or counteroffer
• D.When the transaction reaches the contract signing stage

Q15.In the eviction process, which federal constitutional protection must landlords ensure they do not violate when seeking to remove tenants for lease violations?

• A.Fourteenth Amendment due process requirements
• B.First Amendment right to free speech
• C.Fourth Amendment protection against unreasonable searches
• D.Eighth Amendment protection against cruel and unusual punishment