Free New York Real Estate Practice Exam

Q1.A property owner holds title in fee simple absolute. A state legislature subsequently enacts an ordinance that prohibits all development on the owner's wetland parcel, rendering it effectively worthless for its intended use. Under the Fifth Amendment to the U.S. Constitution, what legal doctrine gives the owner the right to seek compensation from the government?

• A.Regulatory taking (inverse condemnation)
• B.Eminent domain
• C.Police power
• D.Escheat

Q2.A broker represents a seller whose property is being purchased with an FHA-insured loan. The buyer's lender orders an appraisal. Which statement best describes a key characteristic of an FHA appraisal that distinguishes it from a conventional appraisal?

• A.An FHA appraisal also serves as a property condition assessment and must note health and safety deficiencies that could affect the property's eligibility for FHA financing
• B.An FHA appraisal is performed by the buyer rather than a licensed appraiser to reduce costs for low-income borrowers
• C.An FHA appraisal guarantees the property is free of all defects and relieves the buyer of the need for a home inspection
• D.An FHA appraisal establishes the assessed value used by local tax authorities for property tax purposes

Q3.Under the Truth-in-Lending Act (TILA), which federal agency has primary rulemaking and enforcement authority over mortgage lending disclosures?

• A.Consumer Financial Protection Bureau (CFPB)
• B.Federal Reserve Board
• C.Office of the Comptroller of the Currency (OCC)
• D.Federal Deposit Insurance Corporation (FDIC)

Q4.A buyer is purchasing a cooperative apartment in New York City. Unlike a condominium purchase, the buyer will receive which of the following as evidence of ownership?

• A.A deed conveying fee simple title to the specific apartment unit and an undivided interest in the common elements.
• B.A proprietary lease and shares of stock in the cooperative corporation that owns the building.
• C.A condominium unit deed recorded with the county clerk and a membership interest in the homeowners association.
• D.A certificate of occupancy issued by the New York Department of State in the buyer's name.

Q5.Priya contracts to sell her property to a buyer. Before closing, Priya changes her mind and refuses to convey. Which remedy allows the buyer to compel Priya to complete the sale?

• A.Specific performance — a court order compelling Priya to complete the conveyance
• B.Liquidated damages — the buyer collects a pre-set penalty amount
• C.Rescission — the buyer cancels the contract and receives damages
• D.Arbitration — the parties submit to a binding arbitration decision

Q6.At a New York residential closing, the buyer's attorney is negotiating who will handle the preparation of the deed and the filing of the RP-5217 form. Under standard New York closing practice, which statement is most accurate regarding the role of attorneys and the RP-5217?

• A.A licensed real estate salesperson may prepare the deed and file the RP-5217 without attorney involvement, as these are ministerial acts under New York Real Property Law.
• B.The seller's attorney typically prepares the deed; the RP-5217 (Real Property Transfer Report) must be filed with the county clerk at the time of recording the deed, and it is required by New York State law to be completed by the buyer and seller or their agents.
• C.The buyer's attorney prepares the deed in all New York residential transactions, and the RP-5217 is a federal form required by RESPA.
• D.Real estate agents may prepare deeds in New York if neither party has retained an attorney, and the RP-5217 is optional for residential sales under $500,000.

Q7.A property manager receives a written complaint that one tenant is repeatedly propositioning a neighboring tenant. Under 24 C.F.R. § 100.600(c), the manager must:

• A.Take prompt corrective action within the manager's control
• B.Take no action — tenant-on-tenant conduct is a private matter
• C.Wait for a second complaint before investigating
• D.Report to law enforcement before taking any internal action

Q8.Under RESPA (Real Estate Settlement Procedures Act), which federal agency has regulatory oversight and enforcement authority?

• A.Federal Housing Administration (FHA)
• B.Department of Housing and Urban Development (HUD)
• C.Consumer Financial Protection Bureau (CFPB)
• D.Federal Reserve Board

Q9.Under New York's lead paint disclosure requirements, a seller of a pre-1978 residential property is required to provide the buyer with which of the following before the buyer is obligated under a purchase contract?

• A.A completed lead paint inspection report performed by a certified New York State inspector
• B.The EPA-approved pamphlet 'Protect Your Family from Lead in Your Home' and a disclosure form regarding known lead paint hazards
• C.A written warranty that the property is free from all lead-based paint hazards
• D.A New York State Department of Health certification that the property has been remediated

Q10.A broker's salesperson procures an offer on a property located within a federally designated Special Flood Hazard Area (SFHA). The salesperson did not advise the buyer of the mandatory flood insurance purchase requirement under the National Flood Insurance Program (NFIP). The loan is federally backed. Which of the following BEST describes the broker's liability exposure?

• A.The broker faces supervisory liability because federal law mandates that lenders require flood insurance on federally backed loans in SFHAs, and the failure of the salesperson to advise the buyer of this material fact constitutes a failure of the broker's supervisory duty and a potential misrepresentation.
• B.The broker has no liability because the lender is solely responsible for disclosing flood insurance requirements under the Flood Disaster Protection Act.
• C.The broker's liability is limited to the amount of the commission earned on the transaction.
• D.The broker is protected because SFHA designations are a matter of public record and the buyer had constructive notice.

Q11.When dual agency occurs in a real estate transaction, which fiduciary duty is most significantly modified?

• A.The duty of confidentiality
• B.The duty of loyalty
• C.The duty of reasonable care
• D.The duty of accounting

Q12.Under New York regulations, how long must a real estate broker maintain records of real estate transactions?

• A.1 year
• B.2 years
• C.3 years
• D.5 years

Q13.The doctrine of respondeat superior means that an employer (brokerage) can be held vicariously liable for an agent's sexual harassment:

• A.Even without the broker's knowledge, if the agent acted within the scope of employment
• B.Only if the broker personally knew about the conduct
• C.Only if the agent was a W-2 employee, not an independent contractor
• D.Only if the broker ratified the conduct after the fact

Q14.A broker operating under a written buyer-representation agreement has been showing properties to a buyer-client for several weeks. The buyer subsequently contacts a listing broker directly and purchases a property without informing the buyer's broker. The listing broker was unaware of the existing buyer-representation agreement. Under general agency principles, which statement BEST describes the legal outcome?

• A.The buyer's broker has no recourse because agency was terminated by the buyer's unilateral act
• B.The buyer's broker may sue the buyer for breach of the written buyer-representation agreement, and the listing broker has no liability because it lacked actual or constructive notice of the agreement
• C.The listing broker is liable to the buyer's broker for tortious interference because listing brokers always owe duties to all buyer's brokers in the market
• D.The buyer-representation agreement is unenforceable unless it contains a specific commission amount expressed as a fixed dollar figure

Q15.In New York, recording a deed at the county clerk's office primarily serves to protect the grantee against which of the following?

• A.Future property tax increases assessed by the municipality
• B.Claims by subsequent purchasers or lenders who did not have notice of the prior conveyance
• C.Environmental violations discovered after the sale is completed
• D.Disputes over the physical boundary lines described in a survey