Unit 14 California legal aspects of real estate:
disclosures in real estate transactions
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Who has a primary responsibility to notify the buyer and the seller, in writing, of the selling price
of real property after completion of the sale? - CORRECT ANSWER - broker
Don is a licensee who is helping Donna cell her home. He visually inspects her property and
notices a musty odor (but no mold) in one bathroom. Donna cleans and uses an air freshener. Of
the following statements, which is correct regarding Don's responsibility? - CORRECT
ANSWER - Don is not required to do anything other than indicate on the TDS that there is
a musty odor in one bathroom.
Which of the following is/are not included on the TDS?
A. Automatic garage door openers.
B. Smoke detectors.
C. Megans law.
D. Solar panels. - CORRECT ANSWER - C. Megan's Law
How should real estate licensees protect themselves when handling real estate transactions? -
CORRECT ANSWER - Document and disclose material facts
State law requires that all new and replacement ___ sold in California on or after July 1, 1991
must be braced, anchored or strapped to resist falling or horizontal displacement due to
earthquake motion. - CORRECT ANSWER - water heaters
Alain is a French citizen who resides in California. He owns a home that he wishes to sell to his
son, Francois, who was born here and is a U.S. citizen. He intends to sell the home to his son at
fair market value, which is currently $785,000. Do Alain and Francois have any special
, considerations because of their respective citizenships? - CORRECT ANSWER - Yes,
under FIRPTA, a portion of the sale will be diverted to the state and federal tax agencies.
Gayle is a senior citizen who has lived in her neighborhood for over 40 years. Unfortunately, the
neighborhood has deteriorated over the years. Gayle's next-door neighbor uses his house to
manufacture and sell methamphetamine drugs, which has resulted in several arrests. However,
Gayle's house has never been used to sell or manufacture any controlled substances. There have
been several incidents involving drug users, for which Gayle has had to call the authorities to
deal with undesirable people causing a disturbance. When selling her home, does Gayle have any
obligations to disclose on the Transfer Disclosure Statement (TDS) what she knows about her
neighbor? - CORRECT ANSWER - Yes, because the police activity and violence are facts
that could reasonably be material to a potential buyer.
The following items are all included on the natural hazard disclosure, except:
A. Drought
B. Floods.
C. Seismic hazards, such as liquefication.
D. Wildland fire area. - CORRECT ANSWER - A. Drought
Which of the six statutorily specified areas described in the natural hazard disclosure statement
requires property owners to clear brush (30-foot clearance area) around dwellings? - CORRECT
ANSWER - Very high fire hazard severity zone
Flood hazard boundary Mabs identify the general flood hazard within a community. On the flood
hazard boundary map, what is the name for the area that falls with 100-year flood boundary? -
CORRECT ANSWER - Special flood zone area
Red flag - CORRECT ANSWER - Something that alerts a reasonably observant person of
a potential problem.
Material facts - CORRECT ANSWER - Items that would affect the value or desirability of
the property
disclosures in real estate transactions
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Who has a primary responsibility to notify the buyer and the seller, in writing, of the selling price
of real property after completion of the sale? - CORRECT ANSWER - broker
Don is a licensee who is helping Donna cell her home. He visually inspects her property and
notices a musty odor (but no mold) in one bathroom. Donna cleans and uses an air freshener. Of
the following statements, which is correct regarding Don's responsibility? - CORRECT
ANSWER - Don is not required to do anything other than indicate on the TDS that there is
a musty odor in one bathroom.
Which of the following is/are not included on the TDS?
A. Automatic garage door openers.
B. Smoke detectors.
C. Megans law.
D. Solar panels. - CORRECT ANSWER - C. Megan's Law
How should real estate licensees protect themselves when handling real estate transactions? -
CORRECT ANSWER - Document and disclose material facts
State law requires that all new and replacement ___ sold in California on or after July 1, 1991
must be braced, anchored or strapped to resist falling or horizontal displacement due to
earthquake motion. - CORRECT ANSWER - water heaters
Alain is a French citizen who resides in California. He owns a home that he wishes to sell to his
son, Francois, who was born here and is a U.S. citizen. He intends to sell the home to his son at
fair market value, which is currently $785,000. Do Alain and Francois have any special
, considerations because of their respective citizenships? - CORRECT ANSWER - Yes,
under FIRPTA, a portion of the sale will be diverted to the state and federal tax agencies.
Gayle is a senior citizen who has lived in her neighborhood for over 40 years. Unfortunately, the
neighborhood has deteriorated over the years. Gayle's next-door neighbor uses his house to
manufacture and sell methamphetamine drugs, which has resulted in several arrests. However,
Gayle's house has never been used to sell or manufacture any controlled substances. There have
been several incidents involving drug users, for which Gayle has had to call the authorities to
deal with undesirable people causing a disturbance. When selling her home, does Gayle have any
obligations to disclose on the Transfer Disclosure Statement (TDS) what she knows about her
neighbor? - CORRECT ANSWER - Yes, because the police activity and violence are facts
that could reasonably be material to a potential buyer.
The following items are all included on the natural hazard disclosure, except:
A. Drought
B. Floods.
C. Seismic hazards, such as liquefication.
D. Wildland fire area. - CORRECT ANSWER - A. Drought
Which of the six statutorily specified areas described in the natural hazard disclosure statement
requires property owners to clear brush (30-foot clearance area) around dwellings? - CORRECT
ANSWER - Very high fire hazard severity zone
Flood hazard boundary Mabs identify the general flood hazard within a community. On the flood
hazard boundary map, what is the name for the area that falls with 100-year flood boundary? -
CORRECT ANSWER - Special flood zone area
Red flag - CORRECT ANSWER - Something that alerts a reasonably observant person of
a potential problem.
Material facts - CORRECT ANSWER - Items that would affect the value or desirability of
the property
