Free North Dakota Real Estate Practice Exam

Q1.The North Dakota Real Estate Commission derives its authority to adopt rules governing the conduct of licensees from which source?

• A.The National Association of REALTORS® Code of Ethics, which North Dakota has incorporated by reference
• B.N.D.C.C. Chapter 43-23, which grants the Commission statutory rule-making authority
• C.The North Dakota Attorney General's office, which must co-sign all Commission rules
• D.Federal HUD regulations, which preempt state rule-making in real estate licensing

Q2.Under North Dakota law, when must a licensee provide the agency disclosure to a prospective buyer at an open house who appears to be seriously interested in the property?

• A.Before the buyer signs any offer to purchase
• B.At the first substantive contact with the buyer
• C.Only after the buyer requests representation
• D.Within 24 hours of the initial meeting

Q3.Under N.D.C.C. Chapter 43-23, the North Dakota Real Estate Commission has the authority to adopt administrative rules governing licensee conduct. Through which process must these rules be formally adopted to have the force of law?

• A.A majority vote of the North Dakota Legislature
• B.The North Dakota Administrative Agencies Practice Act rulemaking process
• C.Direct approval by the Governor's office
• D.Ratification by the North Dakota Association of REALTORS®

Q4.Under N.D.C.C. Chapter 43-23, which of the following individuals is EXEMPT from needing a North Dakota real estate license when selling real property?

• A.A property manager who negotiates leases on behalf of multiple landlords for compensation
• B.An attorney-in-fact acting under a duly executed power of attorney on behalf of a property owner
• C.A salaried employee of a real estate firm who solicits buyers on behalf of the broker
• D.A referral agent who receives compensation for directing clients to a licensed broker

Q5.Under the Federal Fair Housing Act, which of the following actions by a landlord would constitute illegal discrimination?

• A.Requiring a higher security deposit from tenants with pets
• B.Refusing to rent to someone who cannot meet the income requirements
• C.Refusing to rent to a family with children because the property has a swimming pool
• D.Charging different application fees based on credit score

Q6.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

Q7.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

Q8.A conventional loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA) is known as a:

• A.Jumbo loan
• B.Subprime loan
• C.Portfolio loan
• D.Government loan

Q9.What is the fundamental legal relationship that exists between a real estate agent and their client?

• A.Fiduciary relationship
• B.Independent contractor relationship
• C.Employer-employee relationship
• D.Vendor-customer relationship

Q10.According to N.D.C.C. Chapter 43-23, the North Dakota Real Estate Commission is composed of how many members appointed by the Governor?

• A.Three members
• B.Five members
• C.Seven members
• D.Nine members

Q11.Before the North Dakota Real Estate Commission may revoke or suspend a salesperson's license, what procedural requirement must generally be satisfied under N.D.C.C. Chapter 43-23?

• A.The salesperson's supervising broker must first terminate the salesperson's employment
• B.A majority of all active North Dakota licensees must vote in favor of revocation
• C.The licensee must be given notice and an opportunity for a hearing
• D.The Governor must personally approve the revocation order

Q12.A North Dakota property manager refuses to rent a unit to a Native American applicant who is otherwise qualified, citing a preference for tenants from 'the local community.' Under which law or agency would this applicant MOST specifically have a remedy in North Dakota?

• A.Only the federal Fair Housing Act administered by HUD, because North Dakota has no state fair housing law
• B.The North Dakota Human Rights Act, administered by the North Dakota Department of Labor and Human Rights, which prohibits discrimination based on race and national origin in housing
• C.The North Dakota Real Estate Commission, which can directly award monetary damages to the complainant
• D.The applicant has no remedy because 'community preference' is a neutral policy that does not specify a protected class

Q13.The most important thing a listing agent can ask a buyer's agent when reviewing a financed offer is:

• A.Whether the buyer has a pre-qualification, pre-approval, or loan commitment — and from what type of lender
• B.Whether the buyer has made offers before
• C.Whether the buyer's agent will reduce their commission
• D.Whether the buyer will waive the inspection contingency

Q14.Under North Dakota Century Code § 43-23-11, the North Dakota Real Estate Commission has the authority to investigate a licensed broker's trust account records. During a routine audit, the Commission's investigator discovers that a managing broker has been commingling personal funds with client escrow funds and that the three-way reconciliation has not been performed for six consecutive months. Under NDCC § 43-23-11.1 and the Commission's administrative rules, which of the following actions BEST describes the Commission's authority in this situation?

• A.The Commission may immediately suspend the broker's license on an emergency basis, order a full audit of all trust accounts at the broker's expense, and refer the matter to the Attorney General for potential criminal prosecution, all without waiting for a formal hearing if the public interest requires immediate action.
• B.The Commission must first issue a written warning and allow the broker 30 days to cure the commingling violation before any disciplinary proceedings may commence, as NDCC § 43-23-11 requires a cure period for first-time trust account violations.
• C.The Commission's authority is limited to revoking or suspending the broker's license only after a full evidentiary hearing; it cannot independently order an audit or assess costs against the broker without separate civil court action.
• D.Because commingling is a civil matter, the Commission must defer all action to the Attorney General's office and may only place an administrative hold on the broker's license renewal until the civil matter is resolved.

Q15.Under N.D.C.C. Chapter 43-23, which of the following individuals is EXEMPT from the requirement to hold a North Dakota real estate license?

• A.A property manager who negotiates residential leases on behalf of multiple property owners for compensation.
• B.An attorney-in-fact acting under a duly executed power of attorney to sell a single property on behalf of a principal.
• C.A salaried employee of a real estate brokerage who regularly shows properties to prospective buyers.
• D.A referral agent who regularly directs clients to a licensed broker in exchange for a referral fee.