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CA Real Estate practice questions

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Question 1Property Ownership and Land Use Controls and Regulations

Which form of concurrent ownership gives each co-owner a separate undivided interest with no right of survivorship?

  1. Community property with right of survivorship
  2. Tenancy by the entirety
  3. Tenancy in common Correct answer.
  4. Joint tenancy

Explanation

In a tenancy in common each co-owner holds a distinct undivided share that passes by will or intestacy, so there is no survivorship feature. The only unity required is possession, and owners may hold unequal shares.

Question 2Property Ownership and Land Use Controls and Regulations

In California, real property that a married person inherits during the marriage while domiciled in the state is presumed to be:

  1. Separate property Correct answer.
  2. Community property
  3. Community property with right of survivorship
  4. Quasi-community property

Explanation

Property acquired during marriage by gift, devise, descent, or inheritance is separate property under the Family Code, as is property owned before marriage. The separate-property presumption applies unless the owner takes affirmative steps to change the character of the asset.

Question 3Property Ownership and Land Use Controls and Regulations

Cities and counties derive their authority to adopt zoning ordinances from which power?

  1. Eminent domain
  2. Taxation
  3. Escheat
  4. Police power Correct answer.

Explanation

Zoning is an exercise of the police power, the state's authority to regulate private conduct to protect public health, safety, and general welfare. The state delegates that authority to local governments through enabling statutes.

Question 4Property Ownership and Land Use Controls and Regulations

Which of these is a charge against real property that secures payment of a debt?

  1. Easement
  2. Deed restriction
  3. Covenant
  4. Lien Correct answer.

Explanation

A lien is a nonpossessory charge against property that secures payment of a debt or obligation, such as a mortgage or mechanic's lien. If the debt is not paid, the lienholder may enforce the lien through foreclosure.

Question 5Property Ownership and Land Use Controls and Regulations

Ownership of real property by one person alone is described as ownership in:

  1. Community property
  2. Tenancy in partnership
  3. Severalty Correct answer.
  4. Joint tenancy

Explanation

Sole ownership is called ownership in severalty, from the idea that the owner's interests are severed from those of anyone else. The owner holds the entire bundle of rights and may convey or devise the property freely.

Question 6Property Ownership and Land Use Controls and Regulations

A built-in dishwasher installed under a kitchen counter and plumbed into the home's water lines is ordinarily treated as:

  1. Personal property
  2. An encumbrance on the title
  3. A fixture and part of the realty Correct answer.
  4. A trade fixture

Explanation

An item is a fixture when it is permanently attached and adapted to the use of the property, and the parties intend it to remain. Plumbing and cabinetry integration show both attachment and adaptation, so the dishwasher passes with the realty unless the contract reserves it.

Question 7Property Ownership and Land Use Controls and Regulations

A city takes a strip of private land to widen a public street and pays the owner fair market value. The city has exercised:

  1. Eminent domain Correct answer.
  2. Police power
  3. Escheat
  4. A tax sale

Explanation

Eminent domain is the power to take private property for public use upon payment of just compensation, as required by the Fifth Amendment and the California Constitution. A street widening is a classic public use.

Question 8Property Ownership and Land Use Controls and Regulations

When an owner dies intestate with no will and no surviving heirs, title to the real property passes to the state through:

  1. Condemnation
  2. Dedication
  3. Accretion
  4. Escheat Correct answer.

Explanation

Escheat is the reversion of property to the state when a person dies without a will and without heirs capable of inheriting. It is one of the state's sovereign powers over property.

Question 9Property Ownership and Land Use Controls and Regulations

Three friends take title as joint tenants. One of them records a deed conveying her interest to her cousin. What is the result?

  1. The cousin is a tenant in common as to one-third Correct answer.
  2. The joint tenancy remains intact and the cousin becomes a joint tenant
  3. The conveyance is void because joint tenants may not convey separately
  4. All four parties now hold as tenants in common in equal shares

Explanation

A joint tenant may unilaterally convey her share, and that conveyance severs the joint tenancy as to that share. The grantee takes as a tenant in common, while the two remaining joint tenants continue to hold their shares with survivorship between them.

Question 10Property Ownership and Land Use Controls and Regulations

The period of continuous, open, and adverse use required to acquire a prescriptive easement in California is:

  1. Three years
  2. Five years Correct answer.
  3. Ten years
  4. Twenty years

Explanation

California's prescriptive period is five years, during which the use must be open and notorious, adverse, continuous, and under a claim of right. Unlike adverse possession of the fee, a prescriptive easement does not require payment of property taxes.

Question 11Property Ownership and Land Use Controls and Regulations

The water rights of a landowner whose property borders a lake or the ocean are called:

  1. Riparian rights
  2. Littoral rights Correct answer.
  3. Percolating rights
  4. Appropriative rights

Explanation

Littoral rights attach to land bordering a sea, lake, or other still body of water. Riparian rights, by contrast, belong to owners of land bordering a watercourse such as a river or stream.

Question 12Property Ownership and Land Use Controls and Regulations

A recorded declaration establishes uniform building setbacks for every lot in a subdivision. The legal effect of the declaration is that:

  1. It applies only to the original purchaser of each lot
  2. It expires automatically when the developer sells the last lot
  3. It creates an easement in gross for the developer
  4. It creates enforceable servitudes running with all lots Correct answer.

Explanation

Covenants, conditions, and restrictions recorded against a subdivision create mutual equitable servitudes that run with the land. Any lot owner may enforce them against another owner, and they bind later purchasers with notice.

Question 13Property Ownership and Land Use Controls and Regulations

Under the Subdivision Map Act, a subdivision creating five or more parcels generally requires:

  1. A conditional use permit
  2. A parcel map only
  3. A tentative map and a final map Correct answer.
  4. A lot line adjustment

Explanation

The Act requires tentative and final maps for subdivisions creating five or more parcels, subject to local ordinances. Parcel maps are the usual procedure for subdivisions of four or fewer parcels.

Question 14Property Ownership and Land Use Controls and Regulations

Which element must appear in every California city and county general plan?

  1. Agricultural element
  2. Housing element Correct answer.
  3. Redevelopment element
  4. Historic preservation element

Explanation

State law requires seven mandatory general plan elements: land use, circulation, housing, conservation, open space, noise, and safety. The housing element must be periodically updated and reviewed by the state housing agency.

Question 15Property Ownership and Land Use Controls and Regulations

A homeowner in the coastal zone wants to add a second story. In addition to local permits, the owner most likely must obtain:

  1. An EIR approved by the Legislature
  2. A coastal development permit Correct answer.
  3. A Williamson Act contract
  4. A federal Clean Water Act permit

Explanation

Development within the coastal zone requires a coastal development permit, issued by the local government under its certified local coastal program or by the Coastal Commission. A second-story addition is development subject to that requirement.

Question 16Property Ownership and Land Use Controls and Regulations

A legally established auto repair shop becomes a nonconforming use after the surrounding area is rezoned residential. The owner may generally:

  1. Change to a more intensive commercial use
  2. Expand the shop onto the adjoining vacant lot the owner also buys
  3. Rebuild at twice the square footage after a fire
  4. Continue it without enlargement or substantial alteration Correct answer.

Explanation

A nonconforming use may be continued because it predates the ordinance, but it may not be enlarged, extended, or changed to a more intensive use. Most ordinances also limit rebuilding after destruction and extinguish the use after a period of discontinuance.

Question 17Property Ownership and Land Use Controls and Regulations

A seller conveys a landlocked parcel that has no access to any public road. The buyer most likely has:

  1. An easement by necessity Correct answer.
  2. A prescriptive easement
  3. A license revocable at the seller's will
  4. No right of access of any kind

Explanation

When common ownership is severed and one parcel is left without access, the law implies an easement by necessity over the grantor's remaining land. The easement lasts only as long as the necessity exists.

Question 18Property Ownership and Land Use Controls and Regulations

A developer records a subdivision map designating certain land as public streets. This is an example of:

  1. Dedication Correct answer.
  2. Avulsion
  3. Escheat
  4. Prescription

Explanation

Dedication is the intentional gift of private land to public use, and recording a subdivision map with streets shown is statutory dedication. It requires both an offer by the owner and acceptance by the public entity.

Question 19Property Ownership and Land Use Controls and Regulations

Under CEQA, a city approving a project that may have a significant effect on the environment must generally first:

  1. Hold a public referendum
  2. Adopt an environmental impact report Correct answer.
  3. Rezone the property
  4. Obtain approval from the Coastal Commission

Explanation

CEQA requires the lead agency to prepare or adopt an environmental impact report when a project may cause significant environmental effects that cannot be fully mitigated. If the effects are clearly insignificant, a negative declaration or mitigated negative declaration is used instead.

Question 20Property Ownership and Land Use Controls and Regulations

A river gradually deposits soil along the bank of a farm, adding twenty feet of new land. Title to the added land belongs to:

  1. The owner on the opposite bank
  2. The riparian owner Correct answer.
  3. The state
  4. No one; it remains public land

Explanation

Accretion is the gradual and imperceptible addition of land by natural causes, and the added land belongs to the owner of the bank to which it attaches. Reliction, the gradual withdrawal of water, is treated the same way.

Question 21Property Ownership and Land Use Controls and Regulations

A flood suddenly cuts a new channel through a parcel, moving the river from one side of a forty-acre field to the other. Ownership of the land now lying beyond the new channel:

  1. Stays with the original owner Correct answer.
  2. Passes to the state as sovereign land
  3. Passes to the owner of the opposite bank
  4. Is fixed by recording a new boundary map

Explanation

A sudden and perceptible change in a watercourse is an avulsion, and avulsion does not move property boundaries. The original boundary remains where the watercourse ran before the flood.

Question 22Property Ownership and Land Use Controls and Regulations

An owner seeks to build a garage closer to the side lot line than the ordinance allows because the lot is unusually narrow and shallow. The proper relief is:

  1. A rezoning of the parcel
  2. A conditional use permit
  3. A nonconforming use designation
  4. A variance Correct answer.

Explanation

A variance grants relief from a dimensional or site-development standard when the strict application would cause hardship arising from the unique characteristics of the parcel. A conditional use permit authorizes a use that the ordinance lists as permitted with conditions, which is a different question.

Question 23Property Ownership and Land Use Controls and Regulations

A city's wetlands ordinance, as applied, leaves an owner with no economically viable use of the parcel. In a takings claim, the owner's strongest argument is that the regulation:

  1. Works a taking because it eliminates all economic use Correct answer.
  2. Must be replaced by a conditional use permit
  3. Is valid because police power regulations never require compensation
  4. Is invalid because it was adopted without a general plan amendment

Explanation

A regulation that deprives land of all economically beneficial use can be a compensable taking unless the use was already prohibited by background principles of state property and nuisance law. Less severe restrictions are judged by the multi-factor Penn Central balancing test.

Question 24Property Ownership and Land Use Controls and Regulations

Two neighbors want to shift the boundary between their parcels without creating any additional lot. Under the Subdivision Map Act, the proper procedure is:

  1. A tentative and final subdivision map
  2. A certificate of compliance
  3. A lot line adjustment Correct answer.
  4. A conditional use permit

Explanation

A lot line adjustment moves a boundary between four or fewer existing adjoining parcels and does not create a new parcel, so it is exempt from the map requirements but requires local agency approval. A certificate of compliance instead confirms that an existing parcel was lawfully created.

Question 25Property Ownership and Land Use Controls and Regulations

Several farms overlie a common groundwater basin, and pumping exceeds the basin's safe yield. Under California's correlative rights doctrine, the overlying owners must:

  1. Limit pumping to reasonable beneficial use of the overlying land Correct answer.
  2. Obtain a state water board permit before pumping any water
  3. Pay the county a fee equal to the value of exported water
  4. Continue pumping at will because groundwater is unregulated in California

Explanation

Overlying owners hold correlative rights to percolating groundwater but may use it only for reasonable beneficial use on the overlying land. In time of shortage they must share the safe yield proportionally, and appropriators of surplus water are subordinate to overlying users.

Question 26Property Ownership and Land Use Controls and Regulations

In California, a person claiming title to land by adverse possession must, in addition to possessing the land openly and continuously for five years, do which of the following?

  1. Record a lis pendens with the county recorder before entering
  2. Give the record owner written notice of the claim every year
  3. Obtain a court order confirming possession before the period ends
  4. Pay all taxes assessed on the parcel during those five years Correct answer.

Explanation

California requires an adverse possessor to show, among other elements, that all taxes levied on the property were paid during the five-year possession period; failure to pay the taxes defeats the claim even if every other element is met. No advance notice, lis pendens, or pre-possession court order is required.

Question 27Property Ownership and Land Use Controls and Regulations

A landowner enrolls a 200-acre farm in a contract under the California Land Conservation Act, commonly called the Williamson Act. In exchange for keeping the land in agricultural use, the owner receives which benefit?

  1. A permanent transfer of development rights to nearby parcels
  2. An annual state payment equal to the property tax bill
  3. Tax assessment based on agricultural use value Correct answer.
  4. Complete immunity from all local zoning regulations

Explanation

Williamson Act contracts restrict the land to agricultural or open-space use and, in return, the county assesses the property at its agricultural use value rather than its market or development value. The contracts run for an initial term of ten years and renew automatically unless a notice of nonrenewal is filed.

Question 28Property Ownership and Land Use Controls and Regulations

A city council adopts a zoning ordinance permitting a regional shopping center on a parcel that the city's adopted general plan designates for low-density residential use. The ordinance is most likely:

  1. valid, because a general plan is advisory only and does not bind the council
  2. invalid, but only if the voters reject the ordinance at a referendum
  3. valid, because the council may rezone land without touching the general plan
  4. invalid, because zoning must be consistent with the adopted general plan Correct answer.

Explanation

California law requires that zoning ordinances be consistent with the adopted general plan of the jurisdiction. Where a zoning designation conflicts with the plan's land use diagram, the ordinance is inconsistent and therefore invalid unless the plan is first amended.

Question 29Laws of Agency and Fiduciary Duties

Which of the following creates an agency relationship between a California broker and a seller?

  1. A signed listing agreement Correct answer.
  2. Payment of a fee to the salesperson after closing
  3. A broker's sign on the lawn
  4. A neighbor's recommendation

Explanation

Agency is a consensual relationship formed when the principal authorizes another to act on the principal's behalf and that person accepts. In brokerage practice this is usually documented in a signed listing or representation agreement. Compensation, marketing, and reputation do not by themselves create the relationship.

Question 30Laws of Agency and Fiduciary Duties

A broker holds a buyer's earnest money deposit. Which fiduciary duty is most directly involved in safeguarding those funds and giving the buyer an accurate record of them?

  1. Accounting Correct answer.
  2. Obedience
  3. Disclosure
  4. Loyalty

Explanation

The duty of accounting requires an agent to keep client funds separate, protect them, and render an accurate accounting on request. Trust money belongs to others and must be handled through a proper trust account. The other fiduciary duties address instructions, conflicts of interest, and information.

Question 31Laws of Agency and Fiduciary Duties

A licensee is engaged as a buyer's agent under a written representation agreement. To whom does that licensee owe fiduciary duties?

  1. The buyer who engaged the licensee Correct answer.
  2. The listing broker
  3. Both buyer and seller equally
  4. The seller, because the seller pays at closing

Explanation

The party who engages the agent is the principal, and fiduciary duties flow to that principal; a buyer's agent owes them to the buyer. The source of compensation does not determine the identity of the principal. A licensee who owes equal duties to both sides is a dual agent, which requires informed written consent.

Question 32Laws of Agency and Fiduciary Duties

Under California's agency disclosure statutes, when should the Disclosure Regarding Real Estate Agency Relationships generally be given to a party?

  1. At the close of escrow
  2. Within five days after the purchase agreement is signed
  3. Only when a dual agency arises
  4. Before the party signs the agency agreement Correct answer.

Explanation

The disclosure must be made before the party becomes committed, so that the party understands who represents whom before signing. Where advance delivery is not practicable, it must be given as soon as practicable, and in any event before the party signs the agreement or offer. A late disclosure defeats the statute's purpose.

Question 33Laws of Agency and Fiduciary Duties

A listing expires and the seller signs with a different brokerage. What happens to the former listing agent's duty of confidentiality?

  1. It ends when the seller signs with a new broker
  2. It continues after the agency ends Correct answer.
  3. It ends when the listing expires
  4. It lasts only until escrow closes

Explanation

Confidentiality survives termination of the agency, so a former agent may not later use or reveal the former principal's confidences to that principal's disadvantage. The duty yields only to the obligation not to conceal material facts from another party to a transaction. Ending the listing does not free the agent to talk.

Question 34Laws of Agency and Fiduciary Duties

A broker will represent both the buyer and the seller in the same transaction. What must the broker obtain first?

  1. A reduction of the total commission by half
  2. The informed written consent of both parties Correct answer.
  3. The buyer's agreement to waive all representation
  4. The written consent of at least the seller

Explanation

A broker who represents both sides becomes a dual agent and must obtain the informed written consent of both principals before proceeding. The consent must explain the duties the broker will and will not perform. Consent from only one side is insufficient.

Question 35Laws of Agency and Fiduciary Duties

A broker acts as a dual agent. The seller privately says she would accept $20,000 below the list price, and the buyer then asks the broker whether the seller is flexible. What should the broker do?

  1. Urge the buyer to offer the full list price
  2. Withdraw from the transaction immediately
  3. Keep the seller's statement confidential Correct answer.
  4. Tell the buyer the seller will negotiate below list

Explanation

Even in dual agency, the broker may not reveal one principal's confidential information to the other, including a seller's willingness to accept less. The broker also may not use that information to push the buyer toward a particular price. Neutrality and confidentiality are the core limits of dual representation.

Question 36Laws of Agency and Fiduciary Duties

A salesperson quietly accepts a $500 gift card from a home inspector for referring a client. The client is never told. This conduct is best described as which of the following?

  1. A lawful marketing practice
  2. Ostensible agency
  3. Commingling of trust funds
  4. A breach of loyalty Correct answer.

Explanation

Undisclosed compensation from a vendor creates a secret profit and puts the agent's interest ahead of the client's, which violates the duty of loyalty. Referral compensation must be disclosed and consented to. Such conduct can also expose the licensee to discipline under the license law.

Question 37Laws of Agency and Fiduciary Duties

A licensed salesperson wants to buy a home that her own brokerage has listed. Before writing the offer, what should she do?

  1. Give written notice that she is licensed Correct answer.
  2. Pay the listing side commission herself
  3. Have her broker sign the offer as a dual agent
  4. Resign her license before making the offer

Explanation

A licensee who acts as a principal in a transaction must disclose the license status in writing before entering into the agreement. The purpose is to prevent the other side from mistakenly believing an independent agent is protecting them. Resigning the license or rearranging the commission is not the required step.

Question 38Laws of Agency and Fiduciary Duties

A seller tells the listing agent about recurring water intrusion in the basement and directs the agent not to mention it to buyers. What should the agent do?

  1. Say nothing but urge the buyer to hire an inspector
  2. Wait until a buyer asks a direct question
  3. Follow the instruction, because the seller controls disclosure
  4. Disclose the problem to prospective buyers Correct answer.

Explanation

An agent must disclose known facts that materially affect the value or desirability of the property, and this duty extends to prospective buyers. A principal's instruction to conceal does not excuse the agent; the agent must disclose or terminate the representation. Silence plus an inspection recommendation does not satisfy the duty.

Question 39Laws of Agency and Fiduciary Duties

A seller who granted a broker an exclusive right to sell dies while the listing term is still running. What generally happens to the agency?

  1. It continues only if the broker records an extension
  2. It continues until the listing term expires
  3. It terminates by operation of law Correct answer.
  4. It transfers to the seller's heirs automatically

Explanation

Death of the principal terminates an ordinary agency by operation of law, even if the listing period has not run out. The exception is an agency coupled with an interest, which survives while the agent's interest exists. An unexpired term does not keep a standard listing alive.

Question 40Laws of Agency and Fiduciary Duties

A broker lends money to a developer in exchange for a listing agreement that the parties agree cannot be revoked until the loan is repaid. This arrangement is best described as which of the following?

  1. An illegal net listing
  2. A void dual agency
  3. An agency coupled with an interest Correct answer.
  4. An open listing secured by a recorded lien

Explanation

An agency coupled with an interest arises when the agent holds an interest in the subject matter of the agency, and the agency cannot be revoked while that interest lasts. The broker's loan gives the broker such an interest. Ordinary listings remain freely revocable.

Question 41Laws of Agency and Fiduciary Duties

A broker gives a person business cards, lets that person host open houses, and places the person's name on the team sign. A homeowner reasonably relies on these signals and deals with the person as the broker's representative. The broker is bound under which doctrine?

  1. Subagency implied by law
  2. Ratification after the fact
  3. Novation
  4. Ostensible agency Correct answer.

Explanation

Ostensible agency arises when the principal's own conduct leads a third party reasonably to believe that someone acts as the principal's agent, and the third party relies to their detriment. The broker's cards, sign, and permission create that appearance. Authority can be established by appearances, not just by a written appointment.

Question 42Laws of Agency and Fiduciary Duties

A seller instructs the listing agent to advertise the home only to buyers of a particular national origin. What should the agent do?

  1. Comply, because the agent must obey the principal
  2. Comply but note the instruction in the MLS
  3. Ask the seller to put the instruction in writing
  4. Refuse, because the instruction is unlawful Correct answer.

Explanation

The duty of obedience covers only lawful instructions; fair housing laws forbid discriminatory advertising and steering. An agent who complies risks license discipline and civil liability. Documenting or memorializing the instruction does not cure the illegality.

Question 43Laws of Agency and Fiduciary Duties

A broker deposits a client's earnest money into the company's general operating account. Why is this improper?

  1. Client trust funds may not be commingled Correct answer.
  2. State law bars brokers from ever holding deposits
  3. Earnest money must always be held by a neutral escrow
  4. The broker must first obtain the buyer's written consent

Explanation

Money held for others must go into a trust account and may not be mixed with the broker's own operating funds. Commingling is a license law violation and can lead to discipline and loss of the license. The issue is where the funds are kept, not whether a broker may ever hold them.

Question 44Laws of Agency and Fiduciary Duties

A seller signs an exclusive right to sell listing with Broker A. During the term the seller sells directly to a buyer whom Broker A procured. What is Broker A entitled to?

  1. The full agreed commission Correct answer.
  2. Half of the agreed commission
  3. Only reimbursement of marketing costs
  4. Nothing, because the seller located the buyer

Explanation

Under an exclusive right to sell, the broker earns the agreed commission if the property is sold during the listing period, regardless of who produced the buyer. The seller's direct involvement does not defeat the broker's right. Different rules govern open listings and cooperating-broker disputes.

Question 45Laws of Agency and Fiduciary Duties

A seller offers to pay a salesperson directly for finding a buyer, bypassing the salesperson's employing broker. Is this permissible?

  1. No; only an escrow officer may pass funds to a salesperson
  2. No; compensation must be paid to and through the broker Correct answer.
  3. Yes, if the salesperson reports it as income
  4. Yes, if the amount is under $1,000

Explanation

A salesperson licensee may not be compensated by anyone other than the employing broker, so commissions and referral fees must flow to and through the broker. A seller who pays a salesperson directly circumvents the licensing structure. The rule applies regardless of the dollar amount.

Question 46Laws of Agency and Fiduciary Duties

Under California's agency disclosure statutes, a cooperating broker who is working with a buyer on another broker's listing is presumed to be which of the following?

  1. A disclosed principal
  2. The buyer's agent Correct answer.
  3. The seller's subagent
  4. A dual agent

Explanation

The statutory scheme presumes that a broker working with a buyer represents that buyer unless a written agreement provides otherwise. Subagency is no longer presumed and must be created expressly. Dual agency requires informed written consent that is absent here.

Question 47Laws of Agency and Fiduciary Duties

A licensee hands a prospective buyer a key and opens a door for an inspection. Under California law, performing that ministerial act alone does which of the following?

  1. Does not create an agency relationship Correct answer.
  2. Requires written disclosure within 24 hours
  3. makes the licensee a dual agent
  4. Creates an agency relationship with that party

Explanation

The agency disclosure statutes expressly provide that performing ministerial acts, such as delivering documents or providing access, does not by itself create an agency relationship. Agency requires an actual or implied agreement to represent. Otherwise courtesy services would unknowingly create fiduciary duties.

Question 48Laws of Agency and Fiduciary Duties

A listing agent wants to purchase the seller's property personally. Which condition must be satisfied for the purchase to be proper?

  1. The seller must consent after full written disclosure Correct answer.
  2. The seller must receive a higher price than any other offer
  3. The agent must first cancel the listing in writing
  4. The broker of record must approve the purchase

Explanation

An agent's purchase of the principal's property places the agent's interest in direct conflict with the principal's, so the agent must disclose all material facts and obtain the principal's informed consent. The agent bears the burden of showing good faith and full disclosure. Nothing less protects the principal.

Question 49Laws of Agency and Fiduciary Duties

An agent promises a buyer to review the inspection report before the contingency deadline, then never does it, and the buyer loses the chance to request repairs. Which fiduciary duty did the agent most likely breach?

  1. Accounting
  2. Care Correct answer.
  3. Confidentiality
  4. Obedience

Explanation

The duty of care and diligence requires an agent to perform promised services competently and to protect the client from foreseeable harm. Missing a known deadline after undertaking the task falls below that standard. The remaining duties address funds, instructions, and information rather than competence.

Question 50Laws of Agency and Fiduciary Duties

Under Civil Code section 2079, a seller's broker owes a prospective buyer a duty to conduct a reasonably competent visual inspection of which areas?

  1. The areas of the property reasonably accessible to the broker Correct answer.
  2. All recorded public records affecting the property
  3. Only the common areas of a planned development
  4. Every square foot, including inside walls, regardless of access

Explanation

The statute requires a reasonably competent and diligent visual inspection of the property's reasonably accessible areas, with disclosure of material facts the inspection reveals. The broker need not open walls or search every public record. The standard is what a competent inspection would reveal.