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MS Real Estate practice questions

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Question 1Real Property Characteristics, Ownership, and Estates

A homeowner sells her house and leaves behind a chandelier that is hardwired into the dining-room ceiling. How is the chandelier most likely classified?

  1. A fixture and therefore part of the real property Correct answer.
  2. Personal property, because light fixtures are removable by the seller
  3. Personal property until the buyer takes possession
  4. A trade fixture belonging to the seller's business

Explanation

An item is a fixture when it is attached to the land or improvements with the intent that it remain permanently. Hardwiring a chandelier into the ceiling is strong evidence of both annexation and intent to make it part of the building. Fixtures pass with the realty unless the contract expressly excludes them.

Question 2Real Property Characteristics, Ownership, and Estates

Which estate lasts potentially forever, carries no condition on the owner's use, and passes to the owner's heirs if the owner dies without a will?

  1. Fee simple absolute Correct answer.
  2. Fee simple determinable
  3. Life estate
  4. Estate for years

Explanation

A fee simple absolute is the largest estate known to the law: it is of indefinite duration, is freely inheritable and alienable, and is not subject to any terminating condition. Because it is inheritable, it descends to heirs under intestacy rules.

Question 3Real Property Characteristics, Ownership, and Estates

Two unrelated investors take title to an office building, each holding an undivided one-half interest. When one investor dies, that investor's share passes to that investor's own heirs. Which form of co-ownership is this?

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

Explanation

A tenancy in common has no right of survivorship, so each owner may devise or pass an interest through intestacy to their own successors. The owners hold undivided interests that may be unequal and may be conveyed independently.

Question 4Real Property Characteristics, Ownership, and Estates

Which set of unities must exist at creation for a joint tenancy with a right of survivorship?

  1. Title, possession, and marital relationship
  2. Time, title, interest, and possession Correct answer.
  3. Interest, possession, and payment of equal taxes
  4. Time, title, and consideration

Explanation

A joint tenancy requires the four unities of time, title, interest, and possession. All tenants must acquire their interests at the same moment, by the same instrument, of equal size, with equal rights to possess the whole. Losing any unity severs the survivorship feature.

Question 5Real Property Characteristics, Ownership, and Estates

A life estate measured by the life of someone other than the estate holder is known as which of the following?

  1. A fee simple determinable
  2. An estate for years
  3. A life estate in reversion
  4. A life estate pur autre vie Correct answer.

Explanation

A life estate pur autre vie is measured by a life other than the holder's own, so the holder's death does not end it. The estate continues until the designated measuring life ends, and the holder's heirs may inherit the unexpired portion.

Question 6Real Property Characteristics, Ownership, and Estates

An easement that benefits a particular parcel of land and passes automatically when that parcel is transferred is best described as which of the following?

  1. A license
  2. A profit a prendre
  3. An easement appurtenant Correct answer.
  4. An easement in gross

Explanation

An easement appurtenant is tied to a dominant parcel and a servient parcel, and it runs with the dominant land on transfer. Because the benefit belongs to the land rather than to a person, it passes automatically with a conveyance of the dominant estate.

Question 7Real Property Characteristics, Ownership, and Estates

A retail tenant bolts heavy display shelving to the floor and walls of leased space. When the lease ends, which statement is most accurate?

  1. The tenant forfeits it unless the lease expressly allows removal.
  2. The tenant may remove it if removal does not substantially damage the premises. Correct answer.
  3. The tenant must remove it and restore the premises at any cost.
  4. The landlord acquires it automatically because it is attached to the walls.

Explanation

Items a commercial tenant attaches for business purposes are trade fixtures, which remain the tenant's personal property. The tenant may remove them at the end of the term provided removal does not cause substantial injury to the leased premises. Any damage caused by removal must generally be repaired.

Question 8Real Property Characteristics, Ownership, and Estates

Three friends own land as joint tenants. One conveys her interest to a stranger. What is the resulting ownership structure?

  1. All three interests remain in joint tenancy, with the stranger substituted for the seller.
  2. The joint tenancy ends and all three hold equal shares as tenants in common.
  3. The conveyance is void because joint tenants may not convey without the others' consent.
  4. The stranger holds as a tenant in common with the other two, who remain joint tenants between themselves. Correct answer.

Explanation

A joint tenant may convey an interest unilaterally, and that conveyance destroys the unity of title as to the transferred share. The grantee becomes a tenant in common as to that share, while the remaining joint tenants keep their survivorship rights in the retained shares. The tenancy in common affects only the divided share.

Question 9Real Property Characteristics, Ownership, and Estates

A life tenant tears down a sound barn on the property and sells the lumber. The remainderman objects. What is the remainderman's best claim?

  1. The life tenant acted within full authority because a life estate is ownership for life.
  2. The life tenant committed ameliorative waste, which is always permitted.
  3. The life tenant committed voluntary waste and may be liable for the loss in value. Correct answer.
  4. The remainderman has no standing to object until the life tenant dies.

Explanation

A life tenant may use the property reasonably but may not commit acts that substantially diminish its value for the remainderman. Volatile or destructive acts such as demolishing a sound structure constitute voluntary waste. The remainderman may sue during the life tenancy for damages or an injunction.

Question 10Real Property Characteristics, Ownership, and Estates

Which statement about a tenancy by the entirety is accurate in states that recognize it?

  1. It can be created by any two individuals who take title at the same time.
  2. Either spouse may convey a half interest to a third party without the other's joinder.
  3. It can be created only between spouses and carries a right of survivorship. Correct answer.
  4. It ends automatically whenever the couple has children.

Explanation

A tenancy by the entirety is a marital co-ownership form based on the unity of the spousal relationship. It adds survivorship to the joint tenancy unities, so the surviving spouse takes the whole. Neither spouse may defeat that right by a unilateral conveyance.

Question 11Real Property Characteristics, Ownership, and Estates

A tenant at will plants and cultivates corn, and the landlord terminates the tenancy before harvest. Who is entitled to the crop?

  1. The landlord, because the tenancy ended before harvest.
  2. The tenant, under the doctrine of emblements. Correct answer.
  3. The landlord and the tenant equally, by operation of law.
  4. The next tenant who takes possession of the farmland.

Explanation

The doctrine of emblements protects a tenant whose tenancy ends at an uncertain time and who has planted annual crops. The tenant may re-enter to harvest those crops even after the lease terminates. The right applies to cultivated crops such as corn, not to perennial vegetation.

Question 12Real Property Characteristics, Ownership, and Estates

Which combination of elements is required to acquire an easement by prescription?

  1. An express grant, acceptance, and valuable consideration
  2. Necessity, unity of ownership before severance, and strict necessity at severance
  3. Written permission, recording, and payment of the property taxes
  4. Open and notorious, continuous, and adverse use for the statutory period Correct answer.

Explanation

A prescriptive easement arises from use that is open and notorious, continuous and uninterrupted, and adverse or under claim of right for the period set by statute. The use need not be exclusive in the way required for adverse possession of title. Permissive use does not ripen into prescription.

Question 13Real Property Characteristics, Ownership, and Estates

Land is conveyed "to the city so long as it is used for a park." If the city stops using it as a park, what is the result?

  1. Title automatically returns to the grantor, who retained a possibility of reverter. Correct answer.
  2. The grantor must sue to re-enter because the grantor retained a right of entry.
  3. The land escheats to the state because the stated condition failed.
  4. The city's fee simple shrinks to a life estate measured by the mayor's term.

Explanation

The phrase "so long as" creates a fee simple determinable, which ends automatically when the stated use ceases. The grantor keeps a possibility of reverter, a future interest that becomes possessory without any action by the grantor. A right of entry follows language such as "but if" or "on condition that."

Question 14Real Property Characteristics, Ownership, and Estates

A river slowly and imperceptibly deposits silt along the boundary of a riparian owner's land, adding two acres over 20 years. Who owns the newly formed land?

  1. The riparian owner, by the doctrine of accretion. Correct answer.
  2. The state, because newly formed land belongs to the public.
  3. The upland owner's neighbor, because the boundary line is fixed by the original survey.
  4. The riparian owner only if the deed's metes and bounds description is formally amended.

Explanation

Accretion is the gradual and imperceptible addition of land by natural water action, and the riparian owner gains title to the addition without a deed amendment. The gradual nature of the change is what distinguishes accretion from avulsion. Sudden shifts from avulsion do not move the boundary.

Question 15Real Property Characteristics, Ownership, and Estates

Two tenants in common cannot agree on how to use a property. What remedy is available to either of them?

  1. A partition action, by which the property may be divided or sold and the proceeds split. Correct answer.
  2. A suit to foreclose the other's interest without compensation.
  3. A unilateral deed conveying the entire property to a third party.
  4. An action to convert the tenancy into a joint tenancy by court order.

Explanation

Every cotenant has the right to partition the property, either in kind or by sale when physical division is impractical. Partition ends the co-ownership and allocates the shares according to each owner's interest. A cotenant may not simply convey the entire property alone.

Question 16Real Property Characteristics, Ownership, and Estates

A lease states a fixed six-month term, contains no notice provision, and has no renewal clause. How does the tenancy end?

  1. It ends automatically at the end of the stated term without notice. Correct answer.
  2. It converts to a tenancy at sufferance unless renewed in writing.
  3. It continues until either party dies.
  4. It requires 30 days' written notice from either party.

Explanation

An estate for years is measured by a fixed period, and it terminates automatically when that period expires. No notice to quit is required because the ending date is certain from the outset. Holding over afterward may create a new tenancy by operation of law, but that is a consequence of the tenant's conduct, not part of the original estate.

Question 17Real Property Characteristics, Ownership, and Estates

O conveys Blackacre "to A and A's heirs, but if the parcel is ever used to sell liquor, then to B and B's heirs." How is B's interest best described?

  1. A remainder in fee simple
  2. A shifting executory interest Correct answer.
  3. A possibility of reverter
  4. A right of entry for condition broken

Explanation

B's interest will divest A's fee and transfer title to a third party upon the stated event, which makes it a shifting executory interest. Because the interest cuts short a fee already granted to someone else, it is executory rather than a remainder. B holds the fee simple subject to A's executory limitation.

Question 18Real Property Characteristics, Ownership, and Estates

In a lien-theory state, one of two joint tenants mortgages her interest and then dies. What is the effect on the surviving joint tenant?

  1. The mortgage severs the joint tenancy only if it is recorded before the joint tenant's death.
  2. The mortgage does not sever the joint tenancy, and the survivor takes the whole property free of the lien. Correct answer.
  3. The survivor takes subject to the mortgage but keeps survivorship in the other half.
  4. The mortgage severed the joint tenancy, so the lender owns half and the survivor owns half.

Explanation

Under lien theory, a mortgage is only a lien and not a transfer of title, so it does not destroy the unity of title required for joint tenancy. When the mortgaging joint tenant dies, the survivor's right of survivorship takes the entire estate, and the lien on the decedent's now-extinguished share disappears. Recording the mortgage does not change this result.

Question 19Real Property Characteristics, Ownership, and Estates

Ann owns the parcel benefited by an easement across Ben's land. Ann then buys Ben's parcel, so she owns both properties outright. What happens to the easement?

  1. It is extinguished by merger, because one owner now holds both the dominant and servient estates. Correct answer.
  2. It becomes an easement in gross held by Ann personally.
  3. It survives because it was created by express grant and recorded.
  4. It is suspended while Ann owns both parcels and revives automatically when she sells one.

Explanation

When the same owner holds both the dominant and servient estates in fee simple, the easement is extinguished by merger. A person cannot hold an easement over their own land, since all rights of use merge into ownership. The easement does not revive automatically on a later sale.

Question 20Real Property Characteristics, Ownership, and Estates

A holds a life estate in a property, and C holds the remainder in fee simple. A leases the property to T for ten years and dies three years later. What is T's position?

  1. T may remain for the full ten-year term because the lease was valid when it was made.
  2. T holds a life estate pur autre vie for the remaining seven years.
  3. T's lease continues, but T must pay rent to C for the balance of the term.
  4. T's leasehold ended when A died, because A could not grant an estate longer than A's own. Correct answer.

Explanation

A life tenant may lease the property only for a period no longer than the life tenancy itself. When the measuring life ends, the life estate and any lease carved from it terminate at the same moment. C, as remainderman, then takes possession free of the lease.

Question 21Encumbrances, Liens, Title, and Transfer of Ownership

An easement that is held by a person rather than tied to ownership of a particular parcel of land is known as:

  1. an easement appurtenant
  2. a prescriptive easement
  3. an easement in gross Correct answer.
  4. an easement by necessity

Explanation

An easement in gross benefits its holder personally and has no dominant tenement that it serves. Easements appurtenant, by contrast, benefit and pass with a particular parcel of land.

Question 22Encumbrances, Liens, Title, and Transfer of Ownership

A deed that conveys only the grantor's present interest, if any, and makes no promises about the state of title is a:

  1. general warranty deed
  2. special warranty deed
  3. quitclaim deed Correct answer.
  4. deed of trust

Explanation

A quitclaim deed releases whatever interest the grantor may have without any covenant or warranty of title. The grantee receives no assurance that the grantor owns anything.

Question 23Encumbrances, Liens, Title, and Transfer of Ownership

A lien is best defined as:

  1. a right to use another person's land for a specific purpose
  2. a restriction on land use imposed by a prior owner
  3. a charge against property securing a debt Correct answer.
  4. a transfer of title to secure a loan

Explanation

A lien is an encumbrance that makes property stand as security for a debt or obligation without transferring ownership. The owner may keep title, but the property can be sold to satisfy the lien.

Question 24Encumbrances, Liens, Title, and Transfer of Ownership

The primary purpose of recording a deed in the public land records is to:

  1. guarantee that the grantor actually owns the property being conveyed
  2. give constructive notice to later purchasers and creditors Correct answer.
  3. validate the deed between the grantor and the grantee
  4. set the property's assessed value for taxation

Explanation

Recording places the conveyance in the public record so that the world, including later buyers and creditors, is charged with notice of it. Recording does not by itself prove ownership or make a deed valid between the parties.

Question 25Encumbrances, Liens, Title, and Transfer of Ownership

Which of the following transfers title by operation of law rather than by a voluntary act of the owner?

  1. Intestate succession Correct answer.
  2. Quitclaim deed
  3. Deed in lieu of foreclosure
  4. Warranty deed

Explanation

When an owner dies without a valid will, state intestacy statutes determine who receives the property, so title passes by operation of law. Deeds, including a deed in lieu of foreclosure, require the owner's voluntary act.

Question 26Encumbrances, Liens, Title, and Transfer of Ownership

An easement implied by necessity typically arises when:

  1. a parcel is landlocked with no access except across a neighbor's land Correct answer.
  2. a written document creates a right of way for utility lines
  3. the owner has used a neighbor's driveway openly for the statutory period
  4. a government agency takes private land for a public highway

Explanation

An easement by necessity arises when a parcel becomes landlocked through severance of ownership and reasonable access requires crossing neighboring land. The easement is based on strict necessity rather than on a written grant or long use.

Question 27Encumbrances, Liens, Title, and Transfer of Ownership

In Mississippi, a subsequent purchaser who buys land for value and without notice of a prior unrecorded deed will generally prevail over the earlier grantee because Mississippi's recording statute is a:

  1. race-notice statute
  2. notice statute Correct answer.
  3. race statute
  4. pure title statute

Explanation

Mississippi's recording statute protects a subsequent purchaser for valuable consideration who takes without notice of a prior unrecorded conveyance. Because the later purchaser need not record first to prevail, the statute operates as a notice statute.

Question 28Encumbrances, Liens, Title, and Transfer of Ownership

A Mississippi contractor who furnishes labor and materials for a building must generally file a claim of lien within how many days after the last item of work or materials is furnished?

  1. 30 days
  2. 90 days Correct answer.
  3. 120 days
  4. 60 days

Explanation

Mississippi's mechanic's lien statute generally requires the claimant to file a claim of lien within 90 days after the last work or materials are furnished. Missing that period can forfeit the lien right.

Question 29Encumbrances, Liens, Title, and Transfer of Ownership

Which covenant in a general warranty deed is a future covenant promising that the grantee will not be disturbed in possession by a superior title?

  1. Covenant of quiet enjoyment Correct answer.
  2. Covenant of right to convey
  3. Covenant against encumbrances
  4. Covenant of seisin

Explanation

The covenant of quiet enjoyment is a future covenant in which the grantor promises that the grantee will not be evicted or disturbed by a superior lawful claim. Seisin, right to convey, and against encumbrances are present covenants.

Question 30Encumbrances, Liens, Title, and Transfer of Ownership

A special warranty deed differs from a general warranty deed because the grantor warrants title only against:

  1. claims arising from the grantor's own acts Correct answer.
  2. all claims arising at any time, including those of prior owners
  3. claims of the government for unpaid property taxes
  4. claims arising after the date the deed is delivered

Explanation

A special warranty deed limits the grantor's warranty to defects or claims arising from the grantor's own conduct or those claiming under the grantor. A general warranty deed covers the entire chain of title.

Question 31Encumbrances, Liens, Title, and Transfer of Ownership

Three friends take title as joint tenants. One conveys her interest to a stranger. The result is that:

  1. the joint tenancy is severed as to the conveyed share Correct answer.
  2. the joint tenancy continues in all four owners
  3. the stranger becomes a joint tenant with the two remaining owners
  4. the conveyance is void and cannot sever the joint tenancy

Explanation

A conveyance by one joint tenant severs the joint tenancy as to that share, and the grantee takes the share as a tenant in common. The remaining joint tenants continue to hold their shares with survivorship rights between themselves.

Question 32Encumbrances, Liens, Title, and Transfer of Ownership

An easement may be terminated by merger when:

  1. one owner acquires fee title to both parcels Correct answer.
  2. the servient owner erects a fence across the easement
  3. the easement is used for a different purpose
  4. the easement holder fails to use it for five years

Explanation

Merger occurs when the same person acquires fee ownership of both the dominant and servient parcels, because a person cannot hold an easement over her own land. The easement is extinguished by unity of ownership.

Question 33Encumbrances, Liens, Title, and Transfer of Ownership

A lis pendens filed in the county land records gives:

  1. the plaintiff immediate possession of the property
  2. constructive notice of pending litigation affecting title Correct answer.
  3. a lien for the amount claimed in the lawsuit
  4. an automatic stay of all other proceedings involving the property

Explanation

A lis pendens is a recorded notice that a lawsuit affecting title to the property is pending. It warns buyers and lenders that they may be bound by the outcome of the case.

Question 34Encumbrances, Liens, Title, and Transfer of Ownership

A judgment lien against real property generally arises when:

  1. the judge signs the judgment in open court
  2. the judgment is recorded in the county land records Correct answer.
  3. the sheriff seizes the debtor's personal property
  4. the debtor fails to pay within thirty days of entry

Explanation

A judgment lien on real estate generally attaches when a certified copy or abstract of the judgment is recorded in the land records of the county where the property is located. Entry of the judgment alone does not create a lien on land.

Question 35Encumbrances, Liens, Title, and Transfer of Ownership

A lender agrees to subordinate its mortgage to a later mortgage. The effect is that:

  1. the first mortgage is discharged of record
  2. the first mortgage keeps priority but changes rate
  3. the later mortgage becomes unenforceable
  4. the later mortgage moves ahead in priority Correct answer.

Explanation

Subordination changes the order of priority so that the subordinated lien ranks behind the lien to which it is subordinated. In foreclosure, the later mortgage would be paid before the subordinated mortgage.

Question 36Encumbrances, Liens, Title, and Transfer of Ownership

An owner's title insurance policy typically protects the owner against:

  1. physical defects in the improvements on the land
  2. the owner's failure to pay the mortgage loan
  3. future encumbrances created by the owner after closing
  4. title defects existing when the policy was issued Correct answer.

Explanation

An owner's title policy insures against covered title defects and adverse claims that existed at the time the policy was issued. It is not casualty insurance and does not cover the owner's later acts or loan default.

Question 37Encumbrances, Liens, Title, and Transfer of Ownership

A property has an unpaid mortgage, a recorded judgment lien, and delinquent property taxes. In a foreclosure sale, which lien generally has the highest priority?

  1. They share priority equally
  2. The mortgage
  3. The delinquent property tax lien Correct answer.
  4. The judgment lien

Explanation

Ad valorem property tax liens generally take priority over private liens such as mortgages and judgment liens, regardless of recording order. The tax lien therefore is paid first from the sale proceeds.

Question 38Encumbrances, Liens, Title, and Transfer of Ownership

O conveys Blackacre to A, who does not record. O then conveys the same parcel to B, who pays value and has no notice of A's deed. Under a notice recording statute, B's title is:

  1. subject to A's deed because B should have inspected the property
  2. equal to A's, so they hold as tenants in common
  3. void, because A's deed was delivered first
  4. superior to A's, because B took without notice Correct answer.

Explanation

A notice recording statute protects a subsequent purchaser for value who takes without notice of a prior unrecorded conveyance. B therefore prevails over A even though A's deed was delivered first.

Question 39Encumbrances, Liens, Title, and Transfer of Ownership

A grantor signs and acknowledges a deed, gives it to her attorney with instructions to deliver it to the grantee after the grantor's death, and retains the right to recall it. The deed is generally:

  1. valid, because the grantee will eventually receive the deed
  2. valid, because the grantor acknowledged it before a notary public
  3. invalid as a present conveyance for lack of present intent Correct answer.
  4. effective as a will if the grantor dies before recalling it

Explanation

Delivery requires a present intent to transfer an interest in the property. Retaining the power to recall the deed shows that the grantor did not intend a present conveyance, so the deed is ineffective.

Question 40Encumbrances, Liens, Title, and Transfer of Ownership

A neighbor fences and uses a strip of another's land openly, exclusively, and continuously for the statutory period without permission. The neighbor's claim to title by adverse possession is strengthened most by which fact?

  1. The neighbor paid the taxes on the strip during the period Correct answer.
  2. The true owner paid the property taxes on the strip throughout the period
  3. The neighbor honestly believed that the strip belonged to her
  4. The true owner visited the land occasionally and posted signs

Explanation

Payment of the taxes on the disputed strip by the adverse possessor during the statutory period supports the claim and may be required in some jurisdictions. The true owner's tax payments or acts of ownership tend to defeat the claim.

Question 41Agency Relationships and Fiduciary Duties

Which fiduciary duty requires a licensee to place the principal's interests ahead of the licensee's own interests?

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

Explanation

Loyalty is the cornerstone fiduciary duty: the agent must act solely for the principal's benefit and may not gain advantage at the principal's expense. The other duties are narrower in scope and govern money handling, information, and instructions rather than overall allegiance.

Question 42Agency Relationships and Fiduciary Duties

The duty of confidentiality owed to a former client:

  1. ends when the transaction closes
  2. ends when the listing agreement expires
  3. continues after the agency relationship ends Correct answer.
  4. applies only while a written agreement is in force

Explanation

Confidentiality survives termination of the agency relationship; the agent may not later reveal or exploit information acquired during the representation. Duties such as loyalty and obedience generally end with the relationship, but confidentiality does not.

Question 43Agency Relationships and Fiduciary Duties

A buyer gives a licensee a $5,000 good-faith deposit. The duty of accounting requires the licensee to:

  1. deposit it in the broker's general operating account right away
  2. deposit it in a trust account and account for it Correct answer.
  3. hand it to the seller immediately
  4. hold it until closing without notifying anyone

Explanation

Funds belonging to others must be held in a trust account and accurately accounted for, with records showing receipt and disbursement. Accounting also requires prompt reporting to the party entitled to the money.

Question 44Agency Relationships and Fiduciary Duties

A licensee who has signed a buyer agency agreement with a purchaser represents:

  1. the purchaser, as the licensee's client Correct answer.
  2. no one until an offer is accepted
  3. the seller, because the seller pays the commission
  4. both parties as a dual agent by default

Explanation

Agency follows the agreement between the broker and the party consenting to representation, not the source of compensation. Once the buyer engages the broker, the buyer is the client and the licensee owes fiduciary duties to the buyer.

Question 45Agency Relationships and Fiduciary Duties

A person who is not represented by a licensee but who deals with the licensee's client is best described as:

  1. a fiduciary
  2. a customer Correct answer.
  3. a client
  4. a principal

Explanation

A customer is an unrepresented party to a transaction who is entitled to honesty and fair dealing but not to fiduciary duties. A client, by contrast, has an agency relationship with the broker.

Question 46Agency Relationships and Fiduciary Duties

The duty of obedience requires the licensee to follow the client's instructions that are:

  1. given in writing only
  2. approved by the other party to the deal
  3. lawful and within the agency's scope Correct answer.
  4. consistent with the licensee's own opinion

Explanation

An agent must follow the principal's lawful directions that fall within the scope of the agency. Instructions to act unlawfully, such as concealing a required disclosure, need not be followed.

Question 47Agency Relationships and Fiduciary Duties

The "Working with a Real Estate Broker" form used in Mississippi is intended to:

  1. explain agency relationships and disclose who the licensee represents Correct answer.
  2. create a binding contract of sale between the parties
  3. record the commission split between cooperating brokers
  4. certify the physical condition of the listed property

Explanation

The form is an agency disclosure document: it explains the types of representation available and identifies whom the licensee and brokerage represent in the transaction. It is not a contract of sale, a commission agreement, or a property disclosure.

Question 48Agency Relationships and Fiduciary Duties

A brokerage firm already represents the seller. One of its licensees wants to also represent the buyer in the same transaction. What is required?

  1. Only the buyer's verbal permission, given at the showing
  2. Informed written consent of both parties Correct answer.
  3. Approval from the buyer's mortgage lender before showing
  4. Only the seller's written consent, since the firm already lists it

Explanation

Dual agency is permitted only with the informed, written consent of all parties to the transaction. Without that consent, the brokerage must decline to represent the second party and may only treat that party as a customer.

Question 49Agency Relationships and Fiduciary Duties

Under designated agency, a broker assigns one affiliated licensee to represent the buyer and another to represent the seller. The broker is best described as:

  1. the seller's agent only
  2. a neutral facilitator for both sides
  3. the buyer's agent only
  4. a dual agent for both parties Correct answer.

Explanation

In designated agency, the individual licensees serve their respective clients fully, while the broker supervises both and therefore occupies a dual-agent position. The broker must remain neutral and shield each designated agent's confidential information from the other.

Question 50Agency Relationships and Fiduciary Duties

A seller's agent learns that the roof leaks badly and the seller refuses to disclose it. The agent should:

  1. keep the information confidential because of loyalty to the seller
  2. disclose the material defect to the buyer Correct answer.
  3. resign from the listing without telling anyone why
  4. tell only the buyer's lender

Explanation

A licensee must disclose known material facts about the property to parties in the transaction; confidentiality does not authorize concealing a defect. Confidentiality protects information such as the seller's motivation or bottom-line price, not the true condition of the property.