Free California Real Estate
Practice Questions

A salesperson's license is tied to their employing broker. When that relationship ends, the license becomes inactive until a new broker sponsors them.

To collect from the Recovery Fund, the claimant must first obtain a civil judgment against the licensee and demonstrate they have been unable to collect the judgment.

The minimum passing score on the California salesperson exam is 70%.

Negligent misrepresentation is making a false statement carelessly — without verifying its truth — as opposed to intentional fraud.

California law requires the agency disclosure form to be provided 'as soon as practicable' before the buyer signs a purchase agreement or representation agreement.

California law requires agents to disclose their agency relationship to all parties in a transaction. Failing to inform the buyer that the agent represents the seller is a violation of the agency disclosure requirement.

Common in subdivision financing, a release clause lets a developer pay off a portion of a blanket loan to get individual lots released for sale.

A release clause in a blanket mortgage (covering multiple parcels) allows individual parcels to be sold and released from the lien once the borrower pays a specified portion of the debt.

California's Statute of Frauds (Civil Code §1624) requires contracts for the purchase and sale of real property to be in writing and signed by the party to be charged.

Properties within an airport influence area must be disclosed, as noise levels, property use, and the right to object to aircraft operations may be affected.

Transfers between spouses, certain foreclosure sales, probate sales, and other specified transactions are exempt from the TDS requirement. An as-is designation does not exempt a seller from completing the TDS.

California requires sellers to disclose if they have actual knowledge that the property is located within one mile of a former federal or state ordnance location. This is required due to the potential for unexploded ordnance.

Encumbrances include liens (mortgages, tax liens), easements, deed restrictions, and encroachments — anything that affects the owner's rights or the use of the property.

An item permanently attached to a structure and connected to utilities — like a built-in dishwasher — is generally classified as a fixture and becomes part of the real property. It transfers with the home unless specifically excluded.

The Fifth Amendment and California law require just compensation defined as fair market value — what a willing buyer would pay a willing seller in an arm's-length transaction. Assessed value is often lower than market value and is not the legal standard. The owner cannot reject a valid eminent domain action but may challenge the amount in court.

When a lien is satisfied, the lienholder must record a release (for deeds of trust, this is called a reconveyance) to clear the title. Failure to do so is a violation in California.

An ARM's rate is set by adding the lender's margin to a benchmark index (such as SOFR or the 1-year Treasury). When the index rises or falls, the loan rate adjusts accordingly at each adjustment period.

Fannie Mae (FNMA) and Freddie Mac (FHLMC) are government-sponsored enterprises (GSEs) that buy conforming loans from lenders, package them as mortgage-backed securities, and sell them to investors — keeping money flowing through the mortgage market.

Landlords may set occupancy limits based on legitimate factors (square footage, local codes). "Two per bedroom" is generally reasonable, but such limits cannot be used to discriminate against families.

The California Civil Rights Department (CRD) — formerly the Department of Fair Employment and Housing (DFEH) — is the state agency charged with enforcing FEHA in housing matters. The DRE handles real estate licensee discipline separately.