Pass the Real Estate New Jersey Real Estate New-Jersey-Real-Estate-Salesperson Questions and answers with ValidTests

In a buyer agency relationship, the buyer-broker owes fiduciary duties solely to the buyer.

The buyer-broker is not a subagent of the seller’s broker unless that is specifically created (rare in NJ).

The buyer-broker represents the buyer, not the seller, and has no fiduciary duty to the seller.

Correct answer = C.

In commercial leasing, the Americans with Disabilities Act (ADA) applies.

The ADA requires that public accommodations and commercial facilities be accessible to persons with disabilities.

Fair Housing laws apply mainly to residential property, not commercial.

Fiduciary duties are owed by the agent to their client, not by an owner to tenants.

Market lease rates are economic factors, not legal requirements.

Correct answer = C.

Under TILA-RESPA Integrated Disclosure (TRID) rules, the lender is primarily responsible for preparing and delivering the Loan Estimate and Closing Disclosure.

Brokers and licensees do not prepare these forms.

However, licensees must be knowledgeable about the disclosures so they can help clients understand the process and provide necessary information for lender compliance.

Thus, the best practice is B: brokers should ensure licensees are aware of what the lender requires.

Standard title insurance protects against defects in title that existed before closing, such as forged documents, undisclosed heirs, or improperly executed deeds.

It does not cover issues arising after closing (like new HOA liens).

It does not protect against defects the buyer already knew about.

It also does not insure physical possession or condition of property.

Thus, the correct answer is A.

Lenders often require borrowers to pay 1/12th of annual taxes and insurance each month into an escrow (impound or reserve) account.

The lender then pays property taxes and insurance premiums when due.

PMI accounts relate to mortgage insurance, not taxes/insurance.

Margin and adjustment accounts relate to investment or adjustable-rate loans.

Correct answer = C.

A liquidated damages clause specifies in advance the amount of money or type of damages one party will receive if the other party defaults.

In this case, the earnest money deposit forfeiture is the seller’s only compensation in the event of buyer default.

A broker protection clause protects a broker’s commission rights.

Indemnification clauses shift liability to another party.

A default delivery clause is not a standard real estate term.

Thus, the correct clause is B: liquidated damages clause.

Principle of anticipation: Value is created by the expectation of future benefits (e.g., new park development).

Change: value is constantly influenced by natural and economic changes.

Contribution: value of an improvement is measured by its contribution to the property’s value.

Highest and best use: most profitable legal use of the land.

Here, the increase is due to anticipated future benefits → C.

An option to purchase is a contract where:

The terms and price are established upfront in the option agreement.

The tenant (optionee) has the unilateral right to exercise the option within the agreed period.

Market value or tenant’s discretion does not determine the price unless specifically stated in the option.

Correct answer = A.

Under the Federal Fair Housing Act (as applied in New Jersey), landlords must permit disabled tenants to make reasonable modifications to the premises at the tenant’s expense, such as installing ramps or grab bars.

However:

The landlord cannot charge additional fees (answers A and B are discriminatory).

The landlord cannot prohibit installation of necessary accessibility aids (answer D is illegal).

The landlord can require the tenant to restore the property to its original condition upon vacating, which includes removing modifications such as ramps if they were installed.

Therefore, the correct answer is C.