1
CE SHOP California Real Estate
Principles| Questions and Final
Answers| Board Exam 2025
A property tax lien is discovered during escrow. Assess how this impacts closing and
responsibilities of buyer and seller.
Liens must be cleared or negotiated; usually, seller pays off liens before transfer, or escrow
withholds funds until cleared.
A seller refuses to make agreed repairs discovered during inspection. Evaluate the buyer’s
options under California contract law.
Buyers can request repair credits, demand completion before closing, or cancel contract if
repairs are a contingency.
A broker learns of a competing offer but the seller wants to accept a lower bid from a friend.
Explain the broker’s ethical responsibilities.
Brokers must present all offers fairly and avoid favoritism; failing to do so risks license
sanctions and legal claims.
An investor buys a property with a notice of violation from a public authority. Analyze how this
affects investment risk and possible remedies.
Violations may require costly corrections; investors should assess impact on value and
negotiate price or demand compliance before closing.
, 2
A buyer receives notice that the property’s title is clouded by an unresolved easement dispute.
Propose next steps to protect the buyer.
Conduct further title research, seek legal advice, and consider title insurance or contract
contingencies to manage risk before proceeding.
A tenant requests reasonable accommodations for a disability under California law. Explain the
landlord’s legal obligations and possible challenges.
Landlords must make reasonable accommodations unless undue hardship exists; they must
engage in good-faith discussions and comply with fair housing laws.
A buyer signs a purchase agreement but then finds out the property has a zoning violation.
Explain the rationale behind the buyer’s options to rescind or enforce the contract.
The buyer can cancel the contract if the zoning violation materially affects use, relying on
contingencies; otherwise, they might have to proceed or negotiate remedies.
A real estate agent receives an earnest money deposit but the transaction falls through after 10
days. Evaluate the implications of how the deposit should be handled under California law.
The deposit must be held in a trust or escrow account; depending on contract terms, it may
be refunded or forfeited, but must follow legal escrow procedures.
A landlord fails to deliver possession of the rental property on the agreed date. Identify the
underlying cause of the tenant’s right to terminate the lease.
, 3
The landlord’s failure to deliver possession breaches the lease’s “quiet enjoyment” clause,
giving the tenant legal grounds to cancel or seek damages.
A seller discloses a termite infestation after signing the listing agreement. Propose a solution to
protect the seller from liability while ensuring compliance.
The seller should disclose the infestation to potential buyers promptly and may negotiate
repairs or price adjustments to avoid future legal claims.
A buyer’s loan approval expires before closing due to unexpected delays. Analyze the factors
contributing to this delay and suggest how the buyer might protect their interests.
Delays could stem from appraisal, title, or underwriting issues; buyers should negotiate
contract extensions or include contingency clauses to cover timing risks.
A real estate agent notices an encroachment on a property’s boundary during a showing. Explain
the legal implications and how the agent should handle this disclosure.
The agent must disclose known encroachments as they affect title and value; failure to
disclose can result in liability for misrepresentation.
A property transaction involves a trust sale. Evaluate how timelines and legal steps differ
compared to a standard sale.
Trust sales often require trustee approval and court confirmation, lengthening timelines and
adding legal complexity to the closing process.
CE SHOP California Real Estate
Principles| Questions and Final
Answers| Board Exam 2025
A property tax lien is discovered during escrow. Assess how this impacts closing and
responsibilities of buyer and seller.
Liens must be cleared or negotiated; usually, seller pays off liens before transfer, or escrow
withholds funds until cleared.
A seller refuses to make agreed repairs discovered during inspection. Evaluate the buyer’s
options under California contract law.
Buyers can request repair credits, demand completion before closing, or cancel contract if
repairs are a contingency.
A broker learns of a competing offer but the seller wants to accept a lower bid from a friend.
Explain the broker’s ethical responsibilities.
Brokers must present all offers fairly and avoid favoritism; failing to do so risks license
sanctions and legal claims.
An investor buys a property with a notice of violation from a public authority. Analyze how this
affects investment risk and possible remedies.
Violations may require costly corrections; investors should assess impact on value and
negotiate price or demand compliance before closing.
, 2
A buyer receives notice that the property’s title is clouded by an unresolved easement dispute.
Propose next steps to protect the buyer.
Conduct further title research, seek legal advice, and consider title insurance or contract
contingencies to manage risk before proceeding.
A tenant requests reasonable accommodations for a disability under California law. Explain the
landlord’s legal obligations and possible challenges.
Landlords must make reasonable accommodations unless undue hardship exists; they must
engage in good-faith discussions and comply with fair housing laws.
A buyer signs a purchase agreement but then finds out the property has a zoning violation.
Explain the rationale behind the buyer’s options to rescind or enforce the contract.
The buyer can cancel the contract if the zoning violation materially affects use, relying on
contingencies; otherwise, they might have to proceed or negotiate remedies.
A real estate agent receives an earnest money deposit but the transaction falls through after 10
days. Evaluate the implications of how the deposit should be handled under California law.
The deposit must be held in a trust or escrow account; depending on contract terms, it may
be refunded or forfeited, but must follow legal escrow procedures.
A landlord fails to deliver possession of the rental property on the agreed date. Identify the
underlying cause of the tenant’s right to terminate the lease.
, 3
The landlord’s failure to deliver possession breaches the lease’s “quiet enjoyment” clause,
giving the tenant legal grounds to cancel or seek damages.
A seller discloses a termite infestation after signing the listing agreement. Propose a solution to
protect the seller from liability while ensuring compliance.
The seller should disclose the infestation to potential buyers promptly and may negotiate
repairs or price adjustments to avoid future legal claims.
A buyer’s loan approval expires before closing due to unexpected delays. Analyze the factors
contributing to this delay and suggest how the buyer might protect their interests.
Delays could stem from appraisal, title, or underwriting issues; buyers should negotiate
contract extensions or include contingency clauses to cover timing risks.
A real estate agent notices an encroachment on a property’s boundary during a showing. Explain
the legal implications and how the agent should handle this disclosure.
The agent must disclose known encroachments as they affect title and value; failure to
disclose can result in liability for misrepresentation.
A property transaction involves a trust sale. Evaluate how timelines and legal steps differ
compared to a standard sale.
Trust sales often require trustee approval and court confirmation, lengthening timelines and
adding legal complexity to the closing process.
