NY Real Estate Exam NY Real Estate License Law & Regulations 2 — Questions and Answers
Question 1: What is the NY Human Rights Law as it applies to real estate?
- A state law prohibiting discrimination in housing based on protected classes including sexual orientation and marital status, which are broader than federal protections (Correct answer)
- A law about working hours for real estate agents
- A building accessibility standard
- A property maintenance code
Correct answer: A state law prohibiting discrimination in housing based on protected classes including sexual orientation and marital status, which are broader than federal protections
NY Executive Law Article 15 prohibits housing discrimination based on race, color, religion, sex, national origin, disability, familial status, age, marital status, sexual orientation, gender identity, and military status.
Question 2: What disclosures must a NY real estate agent provide to buyers and sellers?
- Agency disclosure form explaining the agent's role, property condition disclosure or credit, and lead paint disclosure for pre-1978 homes (Correct answer)
- No disclosures are required in NY
- Only the purchase price must be disclosed
- Only environmental hazards must be disclosed
Correct answer: Agency disclosure form explaining the agent's role, property condition disclosure or credit, and lead paint disclosure for pre-1978 homes
NY agents must provide an agency disclosure form at first substantive contact. Sellers must provide a Property Condition Disclosure Statement (or $500 credit in lieu). Pre-1978 homes require lead paint disclosure.
Question 3: What is the Property Condition Disclosure Act in New York?
- A law requiring sellers to complete a disclosure statement about the property's condition or provide a $500 credit to the buyer at closing (Correct answer)
- A mandatory home inspection law
- A requirement for sellers to repair all defects
- A regulation about property insurance
Correct answer: A law requiring sellers to complete a disclosure statement about the property's condition or provide a $500 credit to the buyer at closing
NY Property Condition Disclosure Act requires sellers to complete a 48-question form disclosing known property conditions. Most sellers opt to provide the $500 credit instead, as their attorneys often advise against detailed disclosure.
Question 4: What is commingling in NY real estate law?
- Illegally mixing client funds (trust money) with the broker's personal or business operating funds (Correct answer)
- Combining two property listings
- Mixing residential and commercial properties
- Sharing commission with an unlicensed person
Correct answer: Illegally mixing client funds (trust money) with the broker's personal or business operating funds
NY law strictly prohibits commingling. Brokers must maintain a separate escrow/trust account for client funds (earnest money, security deposits) and never deposit them into personal or general business accounts.
Question 5: Can a NY real estate salesperson receive commission directly from a client?
- No, commissions must always be paid through the sponsoring broker (Correct answer)
- Yes, salespersons can collect commissions directly
- Only for transactions under $10,000
- Only if the client agrees in writing
Correct answer: No, commissions must always be paid through the sponsoring broker
NY law requires that all commissions and compensation for real estate services flow through the licensed broker. Salespersons cannot receive payment directly from clients, other brokers, or any other source except their sponsoring broker.
Question 6: What constitutes unlicensed real estate activity in New York?
- Performing real estate brokerage services (listing, showing, negotiating) for compensation without holding a valid NY real estate license (Correct answer)
- Buying property for personal use
- Renting your own property
- Giving free advice to friends about real estate
Correct answer: Performing real estate brokerage services (listing, showing, negotiating) for compensation without holding a valid NY real estate license
Performing brokerage activities for others for compensation without a license is a misdemeanor in New York. This includes listing properties, showing homes, negotiating deals, or any act requiring a license.
NY Real Estate Exam NY Real Estate License Law & Regulations 2
What is the NY Human Rights Law as it applies to real estate?