Free Utah Real Estate Practice Exam

Q1.A real estate agent tells a prospective buyer that a particular neighborhood is 'changing' and encourages the buyer to sell quickly before property values decline due to an influx of minority residents. This illegal practice is known as:

• A.Redlining
• B.Steering
• C.Blockbusting
• D.Panic peddling avoidance

Q2.Under Utah's Real Estate Licensing and Practices Act (Utah Code § 61-2f-409), what happens to a real estate licensee's license when the Real Estate Education, Research and Recovery Fund pays out a claim on that licensee's behalf?

• A.The licensee's license is placed on probation for two years
• B.The licensee must complete 18 additional hours of continuing education
• C.The licensee's license is automatically suspended until the full amount paid is repaid to the Fund with interest
• D.The licensee is permanently barred from ever obtaining a Utah real estate license

Q3.Under RESPA, what is the maximum amount a lender may require a borrower to deposit into an escrow account for property taxes and insurance at closing?

• A.One-twelfth of the annual amount plus a two-month cushion
• B.Two months of the estimated annual charges
• C.Three months of the estimated annual charges
• D.One-sixth of the annual amount plus a two-month cushion

Q4.A seller breaches a purchase contract by refusing to convey the property after all contingencies have been satisfied. Under contract law principles, which remedy would most likely provide the buyer with the actual property they contracted to purchase?

• A.Specific performance requiring the seller to complete the sale as agreed
• B.Monetary damages equal to the difference between contract price and current market value
• C.Rescission of the contract with return of earnest money
• D.Liquidated damages as specified in the purchase agreement

Q5.Under the Equal Credit Opportunity Act (ECOA), a lender reviewing a purchase contract may NOT consider which of the following factors when evaluating a loan application?

• A.The borrower's employment history and income stability
• B.The borrower's credit score and payment history
• C.The borrower's plans to have children within five years
• D.The borrower's debt-to-income ratio

Q6.In Utah, a principal broker is responsible for supervising affiliated sales agents. Which of the following actions best reflects that supervisory duty under R162?

• A.Reviewing and approving all advertising created by affiliated licensees before it is published
• B.Personally showing every property listed by an affiliated sales agent
• C.Requiring affiliated agents to obtain a separate brokerage license within two years
• D.Filing a separate supervision plan with the Utah Division of Real Estate for each affiliated agent

Q7.A property is encumbered by a first mortgage of $300,000, a second mortgage of $50,000, and a mechanic's lien for $25,000 that was properly recorded before the second mortgage was executed. If the property sells at foreclosure for $350,000, how will the proceeds be distributed?

• A.First mortgage: $300,000, Second mortgage: $25,000, Mechanic's lien: $25,000
• B.Mechanic's lien: $25,000, First mortgage: $300,000, Second mortgage: $25,000
• C.All liens paid proportionally based on their amounts
• D.First mortgage: $300,000, Mechanic's lien: $25,000, Second mortgage: $25,000

Q8.A broker managing a 120-unit apartment complex receives a completed rental application from a family with three children. The owner instructs the broker to reject the application, stating the building is 'better suited for adults.' Under the Fair Housing Act, which of the following best describes the broker's legal exposure and appropriate course of action?

• A.The broker faces personal liability for discriminatory acts carried out on behalf of the owner and must refuse the owner's instruction, as familial status is a protected class under the FHA.
• B.The broker is shielded from liability because the discriminatory directive came from the property owner, not the broker, and following client instructions is a broker's fiduciary duty.
• C.The broker may comply with the owner's directive only if the building qualifies as 55-and-older housing under the Housing for Older Persons Act (HOPA) exemption.
• D.The broker should document the owner's instruction in writing and reject the application, but no personal liability attaches to the broker because the broker is acting as an agent.

Q9.A licensed broker supervises three salespersons who are also licensed mortgage loan originators (MLOs). One salesperson refers a buyer client exclusively to a title company in which the broker holds an undisclosed 15% ownership interest, and the buyer pays a settlement service fee. Under RESPA Section 8, which statement BEST describes the broker's liability exposure?

• A.The broker faces potential RESPA Section 8 liability because the undisclosed ownership interest in the title company constitutes an unearned fee or kickback arrangement, and as the supervising broker the broker bears responsibility for the salesperson's referral conduct.
• B.The broker has no RESPA exposure because Section 8 only applies to lenders and title companies, not to real estate licensees who merely refer clients.
• C.The broker is shielded from liability because the salesperson, not the broker, made the referral, and vicarious liability does not apply under federal real estate settlement law.
• D.The broker avoids liability as long as the affiliated business arrangement (AfBA) disclosure was provided within three business days of application, regardless of whether the broker's ownership was disclosed.

Q10.Under the Equal Credit Opportunity Act (ECOA), a lender is prohibited from discriminating against a credit applicant based on which of the following?

• A.The applicant's current employment length
• B.The applicant's debt-to-income ratio
• C.The applicant's race or national origin
• D.The applicant's credit score

Q11.Which of the following is NOT a protected class under the federal Fair Housing Act?

• A.Income level or source of income (e.g., housing vouchers)
• B.Race
• C.National origin
• D.Religion

Q12.A real estate agent represents a seller and discovers that the property has a known structural defect that could affect its value. The seller instructs the agent not to disclose this information to potential buyers. What should the agent do?

• A.Disclose the material defect as required by law
• B.Follow the seller's instructions to maintain client loyalty
• C.Disclose the defect only if directly asked by a buyer
• D.Withdraw from the listing without explanation

Q13.Under the general principles of agency law, which of the following actions by a seller's agent would be considered a violation of the duty of CONFIDENTIALITY to the seller?

• A.Telling the buyer that the seller is going through a divorce and is highly motivated to sell quickly at a lower price.
• B.Presenting all written offers to the seller promptly, including low offers.
• C.Disclosing to the buyer that the property is located in a flood zone.
• D.Informing the buyer that the listing price was recently reduced.

Q14.A real estate salesperson's client discovers that the property they just purchased under CERCLA is located on a site with significant underground petroleum contamination left by a previous owner. Under CERCLA's liability framework, which of the following parties can potentially be held liable for cleanup costs?

• A.Only the party who originally caused the contamination
• B.Only the current property owner at the time cleanup is ordered
• C.Current owners, past owners at the time of disposal, arrangers, and transporters of hazardous substances
• D.Only parties who knowingly purchased the property with awareness of the contamination

Q15.A property manager oversees a 40-unit residential complex built in 1975. During routine maintenance, deteriorating paint is discovered in several units occupied by families with young children. Under the Residential Lead-Based Paint Hazard Reduction Act (Title X) and EPA regulations, what is the property manager's PRIMARY obligation before performing renovation work in these units?

• A.Hire only EPA-certified contractors and provide tenants with the EPA-approved 'Renovate Right' pamphlet at least 60 days before work begins.
• B.Ensure that any contractor performing renovation, repair, or painting activities is EPA Lead-Safe Certified and follows the Renovation, Repair, and Painting (RRP) Rule requirements.
• C.Immediately vacate all units and conduct universal lead abatement before any other action is taken, regardless of lead levels found.
• D.Disclose the presence of known lead paint only to new tenants at lease signing; existing tenants have already assumed the risk.