Real Estate Legal Aspects- Ch 15 - Licensing
and regulations UPDATED Exam Questions
and CORRECT Answers
California Department of Real Estate - CORRECT ANSWER - Each state has its own real
estate licensing laws and regulatory body. In California, this regulatory agency is the California
Department of Real Estate, also known as the DRE. The MAIN purpose of the DRE is to protect
the public. The DRE achieves this purpose through the enactment and enforcement of laws
relating to real estate and by establishing requirements for the real estate salespersons' and
brokers' licenses.
police power - CORRECT ANSWER - is the right of the state to enact and enforce laws
for the order, safety, health, morals, and general welfare of the public.
The California Real Estate Commissioner is appointed by - CORRECT ANSWER - the
Governor and serves as the chief executive of the Department of Real Estate.
The Commissioner has been given both the power and the means to - CORRECT
ANSWER - issue regulations.
The regulations serve as a means by which the Commissioner can more easily administer and
enforce the Real Estate Law and the Subdivided Lands Law. The Regulations of the Real Estate
Commissioner have the force and effect of law and, once issued, become a part of the California
Administrative Code.
The Commissioner's specific duties include but are not limited to the following - CORRECT
ANSWER - The qualification of applicants and issuance of real estate licenses
The investigation of complaints and, where appropriate, pursuit of formal action against
licensees
The investigation of non-licensees alleged to be performing acts for which a license is required
The regulation of the sale or lease of subdivision interests
,Through real estate broker and other license requirements, the regulation of dealings in mineral,
oil and gas property and Prepaid Rental Listing Services
In order to be appointed as Commissioner, the Commissioner candidate - CORRECT
ANSWER - must have served for a minimum of 5 years as a real estate broker actively
engaged in the real estate business in California, OR must possess 5 years' related experience
associated with real estate activity in California during the last 10 years.
Explain how the California Department of Real Estate (DRE) protects the public. - CORRECT
ANSWER - DRE protects the public from incompetent or downright dishonest real estate
licensees through the enactment and enforcement of laws relating to real estate and by
establishing requirements for the real estate salespersons' and brokers' licenses.
How does DRE generate revenue for operating costs? - CORRECT ANSWER - Operating
revenue is derived from fees charged for real estate licenses, subdivision public reports, and
various other permits issued by the Department.
List three of the California Real Estate Commissioner's specific duties. - CORRECT
ANSWER - Qualification of applicants and issuance of real estate licenses
Investigation of complaints and, where appropriate, pursuit of formal action against licensees
Regulation of the sale or lease of subdivision interests
What are the required qualifications to be appointed as Commissioner? - CORRECT
ANSWER - A Commissioner candidate must have served for a minimum of 5 years as a
real estate broker actively engaged in the real estate business in California, OR must possess 5
years' related experience associated with real estate activity in California during the last 10 years.
When a License is Required - CORRECT ANSWER - Sells or offers to sell, buys or offers
to buy, and solicits prospective sellers or purchasers of real estate.
Solicits or obtains listings of real estate.
Negotiates the purchase, sale, or exchange of real property or a business opportunity.
Assists or offers to assist in filing an application for the purchase or lease of property owned by
the state or federal government.
, Negotiates loans, collects payments, or performs services for borrowers or lenders or note
owners.
Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property
sales contract, or a promissory note secured directly or collaterally by a lien on real property or
on a business opportunity, and performs services for the holders thereof.
Leases or rents; offers to lease or rent; places for rent; solicits listings of places for rent; solicits
for prospective tenants; negotiates the sale, purchase or exchanges of leases on real property; or
collects rents from real property.*
The following parties are exempt from the licensing requirements in California. These parties
DO NOT need to be licensed as real estate salespersons or brokers because of the nature of their
work (in order to carry out their jobs as such): - CORRECT ANSWER - The employees of
banks or other lending institutions
The lenders who make federally-insured or federally-guaranteed loans
Licensed personal property brokers
Cemetery authorities
Certain agricultural associations
Certain collectors of payments for lenders or on notes for owners in connection with loans
secured directly or collaterally by liens on real property
Some clerical help (depending on the extent of the duties handled by the clerical personnel)
Resident managers of apartment buildings and complexes or their employees
Short-term (vacation) rental agents
Employees of certain lending institutions
Employees of real estate brokers for specific, limited functions
In addition to the exemptions listed above, real estate activities that normally require a license do
not require a license if they are performed by: - CORRECT ANSWER - A person acting
on his or her own behalf with respect to his or her own property
A regular officer of a corporation or a general partner of a partnership with respect to real
property owned or leased by the corporation or partnership, respectively, or in connection with
the proposed purchase or leasing of real property by the corporation or partnership, respectively,
if the acts are not performed by the officer or partner in expectation of special compensation
and regulations UPDATED Exam Questions
and CORRECT Answers
California Department of Real Estate - CORRECT ANSWER - Each state has its own real
estate licensing laws and regulatory body. In California, this regulatory agency is the California
Department of Real Estate, also known as the DRE. The MAIN purpose of the DRE is to protect
the public. The DRE achieves this purpose through the enactment and enforcement of laws
relating to real estate and by establishing requirements for the real estate salespersons' and
brokers' licenses.
police power - CORRECT ANSWER - is the right of the state to enact and enforce laws
for the order, safety, health, morals, and general welfare of the public.
The California Real Estate Commissioner is appointed by - CORRECT ANSWER - the
Governor and serves as the chief executive of the Department of Real Estate.
The Commissioner has been given both the power and the means to - CORRECT
ANSWER - issue regulations.
The regulations serve as a means by which the Commissioner can more easily administer and
enforce the Real Estate Law and the Subdivided Lands Law. The Regulations of the Real Estate
Commissioner have the force and effect of law and, once issued, become a part of the California
Administrative Code.
The Commissioner's specific duties include but are not limited to the following - CORRECT
ANSWER - The qualification of applicants and issuance of real estate licenses
The investigation of complaints and, where appropriate, pursuit of formal action against
licensees
The investigation of non-licensees alleged to be performing acts for which a license is required
The regulation of the sale or lease of subdivision interests
,Through real estate broker and other license requirements, the regulation of dealings in mineral,
oil and gas property and Prepaid Rental Listing Services
In order to be appointed as Commissioner, the Commissioner candidate - CORRECT
ANSWER - must have served for a minimum of 5 years as a real estate broker actively
engaged in the real estate business in California, OR must possess 5 years' related experience
associated with real estate activity in California during the last 10 years.
Explain how the California Department of Real Estate (DRE) protects the public. - CORRECT
ANSWER - DRE protects the public from incompetent or downright dishonest real estate
licensees through the enactment and enforcement of laws relating to real estate and by
establishing requirements for the real estate salespersons' and brokers' licenses.
How does DRE generate revenue for operating costs? - CORRECT ANSWER - Operating
revenue is derived from fees charged for real estate licenses, subdivision public reports, and
various other permits issued by the Department.
List three of the California Real Estate Commissioner's specific duties. - CORRECT
ANSWER - Qualification of applicants and issuance of real estate licenses
Investigation of complaints and, where appropriate, pursuit of formal action against licensees
Regulation of the sale or lease of subdivision interests
What are the required qualifications to be appointed as Commissioner? - CORRECT
ANSWER - A Commissioner candidate must have served for a minimum of 5 years as a
real estate broker actively engaged in the real estate business in California, OR must possess 5
years' related experience associated with real estate activity in California during the last 10 years.
When a License is Required - CORRECT ANSWER - Sells or offers to sell, buys or offers
to buy, and solicits prospective sellers or purchasers of real estate.
Solicits or obtains listings of real estate.
Negotiates the purchase, sale, or exchange of real property or a business opportunity.
Assists or offers to assist in filing an application for the purchase or lease of property owned by
the state or federal government.
, Negotiates loans, collects payments, or performs services for borrowers or lenders or note
owners.
Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property
sales contract, or a promissory note secured directly or collaterally by a lien on real property or
on a business opportunity, and performs services for the holders thereof.
Leases or rents; offers to lease or rent; places for rent; solicits listings of places for rent; solicits
for prospective tenants; negotiates the sale, purchase or exchanges of leases on real property; or
collects rents from real property.*
The following parties are exempt from the licensing requirements in California. These parties
DO NOT need to be licensed as real estate salespersons or brokers because of the nature of their
work (in order to carry out their jobs as such): - CORRECT ANSWER - The employees of
banks or other lending institutions
The lenders who make federally-insured or federally-guaranteed loans
Licensed personal property brokers
Cemetery authorities
Certain agricultural associations
Certain collectors of payments for lenders or on notes for owners in connection with loans
secured directly or collaterally by liens on real property
Some clerical help (depending on the extent of the duties handled by the clerical personnel)
Resident managers of apartment buildings and complexes or their employees
Short-term (vacation) rental agents
Employees of certain lending institutions
Employees of real estate brokers for specific, limited functions
In addition to the exemptions listed above, real estate activities that normally require a license do
not require a license if they are performed by: - CORRECT ANSWER - A person acting
on his or her own behalf with respect to his or her own property
A regular officer of a corporation or a general partner of a partnership with respect to real
property owned or leased by the corporation or partnership, respectively, or in connection with
the proposed purchase or leasing of real property by the corporation or partnership, respectively,
if the acts are not performed by the officer or partner in expectation of special compensation
