MAINE- STATE EXAM QUESTIONS AND
ANSWERS GRADED A+
The most common manner in which to transfer risk in real estate property management is
through the use of:
A. indemnification agreements.
B. insurance policies.
C. hold harmless agreements.
D. release of liability forms. - Answer B.
In risk management, the most common and effective manner in to transfer risk is by the use of
insurance policies. The property owner pays a premium, and the insurance company takes on
the liability for the occurrence of the insured event.
Which of the following is NOT an element of the bundle of rights of an owner of property in fee
simple absolute?
A. The right to lease the mineral rights
B. The right to encumber the property with an easement in gross
C. The right to sell the air rights
D. The right to start a foreclosure process - Answer D.
Answers A, B and C are all elements of the bundle of rights of an owner of property in fee
simple absolute. The right to start a foreclosure belongs to a lender or someone who has a
judgment against the owner of the property
Which of the following would NOT be characterized as a physical characteristic of real estate?
A. Heterogeneity
B. Immobility
C. Durability
D. Permanence of Investment - Answer D.
Permanence of investment is an economic characteristic of real estate.
Fee simple ownership describes:
A. Future ownership.
B. Current ownership.
C. A leasehold estate.
D. Current possession. - Answer B. Current ownership
,Fee simple ownership describes current ownership. It is also known as fee simple absolute or
ownership in fee.
Which of the following is a publicly traded investment entity that pool money of investors who
want to invest in real estate in markets around the country/world?
A. REIT
B. Deed in trust
C. Deed of trust
D. Trust account - Answer A. REIT
Ben and Jerry want to buy a principal place of residence, so they contacted Agent Sandy to
show them houses. When looking for a home, Sandy would never represent Ben and Jerry as a:
A. customer.
B. dual agent
.C. single agent.
D. general agent. - Answer D. General Agent
A general agent represents a party in an on-going business relationship. Ben and Jerry and
looking for a principal place of residence and this relationship is not expected to be on-going.
Express agency is created by:
A. an oral or written agreement between the parties.
B. a contract between the parties.
C. state laws that allow agency relationships.
D. federal laws that allow agency relationships - Answer A. An oral or written agreement
between parties.
All of the following statements regarding transaction brokers is false EXCEPT that a transaction
broker:
A. will have the same fiduciary duties as listing or buyer agents.
B. will have the same duties as disclosed dual agents.
C. must have a written agreement with their customers.
D. has no fiduciary duties to buyers or sellers. - Answer D.
A transaction broker has no fiduciary duties to buyers or sellers.
,On Sunday, Sara had a buyer who looked at her listing located at 123 Red Rock Rise. On Tuesday,
Sara showed another buyer 123 Red Rock Rise. On Saturday, both buyers notified Sara they are
ready to write an offer on 123 Red Rock Rise. This is an example of:
A. subagency.
B. designated agency.
C. dual agency.
D. single agency. - Answer C.
Sara may be a disclosed dual agent with the written and informed consent of both buyers and
the seller.
The federal law that assigns accountability for the cleanup of hazardous sites in the
environment is called:
A. CERCLA.
B. ECOA.
C. CAN-SPAM.
D. FIRPTA - Answer A. CERCLA (Comprehensive Enviornmental Responsive, Compensation, and
Liability Act
Under CERCLA, all of the following would be classified as Potentially Responsible Parties (PRPs)
EXCEPT:
A. transporters of hazardous substances who selected the disposal site.
B. persons who arrange for treatment or disposal of hazardous substances.
C. former owners and operators of a facility at the time of disposal.
D. the brokerage companies who sold the property. - Answer D.
Brokerage companies who sold the property are not identified as PRPS. However, as real estate
agents it is important to identify properties on the National Priorities List and to be aware of
possible environmental hazards so we can direct clients to experts when needed.
To limit his liability, a buyer of a brownfield site will want to:
A. conduct a satellite view of the property on Google maps to identify environmental hazards.
B. have his real estate agent thoroughly inspect the property for environmental hazards.
C. performing an All Appropriate Inquiry by conducting a Phase I Environmental Site
Assessment.
D. personally walk the entire property to inspect for environmental hazards. - Answer C.
Which federal agency publishes flood zone maps?
, A. FEMA
B. EPA
C. HUD
D. FTC - Answer A. FEMA (Federal Emergency Management Agency)
A person is using her property as a residential use. Last year zoning changed the use on her
street to a commercial zone. Is her residential use of the property legal?
A. Yes, because she is still living there.
B. Yes, because zoning will allow for a non-conforming use
.C. No, because it is illegal to change a use from residential to commercial.
D. No, because the zoning board does not know she is residing in the property. - Answer B.
A nonconforming use allows the owner to continue a land use that once conformed or pre-
dates modern zoning laws, even when the current zoning clearly prohibits the usage.
Anytown, New York has a document that serves as the long range guide for public and private
land use within the town. This document is called:
A. CC&Rs.
B. Anytown's certificate of occupancy.
C. a declaration of condominium.
D. the Comprehensive Plan. - Answer D.
Which easement would NOT automatically be transferred to the new owners?
A. Easement appurtenant for a driveway
B. Commercial gross easement
C. Implied easement on a flag lot
D. Personal gross easement - Answer D.
Riparian rights pertain to:
A. an easement in gross.
B. avulsion of the land due to an earthquake.
C. erosion of the land due to the action of water.
ANSWERS GRADED A+
The most common manner in which to transfer risk in real estate property management is
through the use of:
A. indemnification agreements.
B. insurance policies.
C. hold harmless agreements.
D. release of liability forms. - Answer B.
In risk management, the most common and effective manner in to transfer risk is by the use of
insurance policies. The property owner pays a premium, and the insurance company takes on
the liability for the occurrence of the insured event.
Which of the following is NOT an element of the bundle of rights of an owner of property in fee
simple absolute?
A. The right to lease the mineral rights
B. The right to encumber the property with an easement in gross
C. The right to sell the air rights
D. The right to start a foreclosure process - Answer D.
Answers A, B and C are all elements of the bundle of rights of an owner of property in fee
simple absolute. The right to start a foreclosure belongs to a lender or someone who has a
judgment against the owner of the property
Which of the following would NOT be characterized as a physical characteristic of real estate?
A. Heterogeneity
B. Immobility
C. Durability
D. Permanence of Investment - Answer D.
Permanence of investment is an economic characteristic of real estate.
Fee simple ownership describes:
A. Future ownership.
B. Current ownership.
C. A leasehold estate.
D. Current possession. - Answer B. Current ownership
,Fee simple ownership describes current ownership. It is also known as fee simple absolute or
ownership in fee.
Which of the following is a publicly traded investment entity that pool money of investors who
want to invest in real estate in markets around the country/world?
A. REIT
B. Deed in trust
C. Deed of trust
D. Trust account - Answer A. REIT
Ben and Jerry want to buy a principal place of residence, so they contacted Agent Sandy to
show them houses. When looking for a home, Sandy would never represent Ben and Jerry as a:
A. customer.
B. dual agent
.C. single agent.
D. general agent. - Answer D. General Agent
A general agent represents a party in an on-going business relationship. Ben and Jerry and
looking for a principal place of residence and this relationship is not expected to be on-going.
Express agency is created by:
A. an oral or written agreement between the parties.
B. a contract between the parties.
C. state laws that allow agency relationships.
D. federal laws that allow agency relationships - Answer A. An oral or written agreement
between parties.
All of the following statements regarding transaction brokers is false EXCEPT that a transaction
broker:
A. will have the same fiduciary duties as listing or buyer agents.
B. will have the same duties as disclosed dual agents.
C. must have a written agreement with their customers.
D. has no fiduciary duties to buyers or sellers. - Answer D.
A transaction broker has no fiduciary duties to buyers or sellers.
,On Sunday, Sara had a buyer who looked at her listing located at 123 Red Rock Rise. On Tuesday,
Sara showed another buyer 123 Red Rock Rise. On Saturday, both buyers notified Sara they are
ready to write an offer on 123 Red Rock Rise. This is an example of:
A. subagency.
B. designated agency.
C. dual agency.
D. single agency. - Answer C.
Sara may be a disclosed dual agent with the written and informed consent of both buyers and
the seller.
The federal law that assigns accountability for the cleanup of hazardous sites in the
environment is called:
A. CERCLA.
B. ECOA.
C. CAN-SPAM.
D. FIRPTA - Answer A. CERCLA (Comprehensive Enviornmental Responsive, Compensation, and
Liability Act
Under CERCLA, all of the following would be classified as Potentially Responsible Parties (PRPs)
EXCEPT:
A. transporters of hazardous substances who selected the disposal site.
B. persons who arrange for treatment or disposal of hazardous substances.
C. former owners and operators of a facility at the time of disposal.
D. the brokerage companies who sold the property. - Answer D.
Brokerage companies who sold the property are not identified as PRPS. However, as real estate
agents it is important to identify properties on the National Priorities List and to be aware of
possible environmental hazards so we can direct clients to experts when needed.
To limit his liability, a buyer of a brownfield site will want to:
A. conduct a satellite view of the property on Google maps to identify environmental hazards.
B. have his real estate agent thoroughly inspect the property for environmental hazards.
C. performing an All Appropriate Inquiry by conducting a Phase I Environmental Site
Assessment.
D. personally walk the entire property to inspect for environmental hazards. - Answer C.
Which federal agency publishes flood zone maps?
, A. FEMA
B. EPA
C. HUD
D. FTC - Answer A. FEMA (Federal Emergency Management Agency)
A person is using her property as a residential use. Last year zoning changed the use on her
street to a commercial zone. Is her residential use of the property legal?
A. Yes, because she is still living there.
B. Yes, because zoning will allow for a non-conforming use
.C. No, because it is illegal to change a use from residential to commercial.
D. No, because the zoning board does not know she is residing in the property. - Answer B.
A nonconforming use allows the owner to continue a land use that once conformed or pre-
dates modern zoning laws, even when the current zoning clearly prohibits the usage.
Anytown, New York has a document that serves as the long range guide for public and private
land use within the town. This document is called:
A. CC&Rs.
B. Anytown's certificate of occupancy.
C. a declaration of condominium.
D. the Comprehensive Plan. - Answer D.
Which easement would NOT automatically be transferred to the new owners?
A. Easement appurtenant for a driveway
B. Commercial gross easement
C. Implied easement on a flag lot
D. Personal gross easement - Answer D.
Riparian rights pertain to:
A. an easement in gross.
B. avulsion of the land due to an earthquake.
C. erosion of the land due to the action of water.
