Practice Test Geeks(CRECI) Commercial Real Estate Certification Institute Practice Test
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Regulatory Compliance and Ethics Flashcards

7 cards from real CRECI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Compliance and Ethics flashcards as text

  1. The Foreign Investment in Real Property Tax Act (FIRPTA) primarily requires:

    Answer: Withholding of a percentage of the sale price when a foreign person sells US real property

    FIRPTA requires buyers to withhold a percentage of the sale price (typically 15%) when a foreign person disposes of US real property interests.

  2. Which ethical principle requires a commercial real estate professional to provide competent service and not take on assignments beyond their expertise without disclosure?

    Answer: Duty of competence

    The duty of competence obligates professionals to only undertake assignments for which they have the necessary knowledge and skill, or to disclose limitations.

  3. Anti-money laundering (AML) regulations in commercial real estate are primarily enforced under which framework?

    Answer: Bank Secrecy Act (BSA) and FinCEN rules

    The Bank Secrecy Act and FinCEN (Financial Crimes Enforcement Network) rules form the primary AML compliance framework applicable to real estate transactions.

  4. A broker who inflates a property's estimated value to secure a listing agreement is guilty of:

    Answer: Fraudulent misrepresentation

    Intentionally misrepresenting a property's value to secure a listing constitutes fraudulent misrepresentation, which involves knowingly false statements made to induce a party to act.

  5. Under commercial real estate ethics standards, when must a broker disclose a potential conflict of interest?

    Answer: At the earliest possible opportunity before the conflict can affect the transaction

    Ethics standards require disclosure of conflicts of interest as early as possible so clients can make informed decisions about their representation.

  6. Which of the following would constitute 'commingling' of funds in a commercial real estate context?

    Answer: Depositing earnest money into the broker's personal operating account

    Commingling occurs when client funds (such as earnest money) are mixed with the broker's personal or operating funds rather than held in a separate trust account.

  7. The concept of 'steering' in commercial real estate refers to:

    Answer: Channeling buyers or tenants toward or away from areas based on protected class characteristics

    Steering is a discriminatory practice of directing people toward or away from certain neighborhoods based on their membership in a protected class.