ARIZONA DISCLOSURE: Comprehensive Final Exam Study Guide

Transcription

1 ARIZONA DISCLOSURE: Comprehensive Final Exam Study Guide To find the applicable content within the course: Click the "TABLE OF CONTENTS" button in the upper right corner. Then click on the applicable chapter (at the top center of the screen). Then click on the applicable TOPIC. 1. If unsubdivided lands are located within territory in the vicinity of a military airport, the public report connected with such lands shall include a statement disclosing such fact. a. on the back page of the public report b. written in bold 12 point block letters on the first page of the report c. and a copy of the map to the airport d. unless the Governor waives such requirement in writing The content that provides the information for the above question is found in Chapter 3, "Disclosure of Nearby Public Airport". 2. No criminal, civil or administrative action may be brought against a transferor or lessor of real property or a licensee for failing to disclose that the property being transferred or leased is or has been. a. the site of a natural death b. treated for wood infestation (termites) c. in the vicinity of a military airport d. near a landfill The content that provides the information for the above question is found in Chapter 3, "Stigmatized Property".

2 3. You are a property manager. You manage several complexes. You manage a complex and you know that several felony crimes have been committed there. When asked if there have been any crimes in the area, you say no. Have you broken the law? a. No, because A.R.S. section plainly states that no action can be brought against a licensee for failing to disclose that the property being transferred or leased is or has been the site of a natural death, suicide or homicide or any other crime classified as a felony. b. Yes, the law does not protect intentional misrepresentation. You should answer the question truthfully, or respond that you are not required to answer that question. c. No, because everyone know that area is not a well-defined term. d. No, because to tell the truth would not be in you client's (the complex owner) best interest The content that provides the information for the above question is found in Chapter 3, "Intentional Misrepresentation". 4. You have a full price offer on a home. It is your listing. You have complied with the law regarding disclosure of dual agency. HOWEVER, you know the reason the property is being sold. The seller is dying with complications of A.I.D.S. Should you disclose this fact to your buyer? a. No, because people with disabilities are protected under federal and state fair housing laws. The Fair Housing Act defines disability (called handicap in the Act). This definition applies to AIDS and HIV infection. The Act also protects people who are perceived as having AIDS or HIV or who are associated with people who have AIDS or HIV. b. Yes, because you owe a fiduciary duty to your buyer as well as your seller. c. No, but you should notify the County Health Department that the home is being sold. d. You don't have to, but you probably should The content that provides the information for the above question is found in Chapter 2, "Intentional Misrepresentation". 5. The primary source(s) of lead exposure for children is/are. a. deteriorating lead-based paint b. lead contaminated dust c. lead contaminated residential soil d. all of the above 6. What is lead? a. Lead is a metallic element found worldwide in rocks and soils. b. Lead is a type of mold found in rocks and soils in Arizona. c. Lead is a non-toxic metal that you find in some paints. d. Lead is a type of organic material found worldwide in rocks and soils

3 7. The people most vulnerable to lead poisoning are. a. the elderly b. overweight persons of all ages c. growing children d. people with pulmonary disease 8. If a home was built before 1960 but after 1940, the chances that lead-based paint was used in construction are. a. two out of three b. ten to one c. one out of three d. two to one 9. Which of the following is a true statement? a. If a property is being sold as is, the seller and the broker are relieved of their liability to disclose material facts which should be known. b. An as is clause will relieve the broker from his/her duty to disclose material facts that should be known, but does not relieve the duty to disclose known material defects. c. No matter how well worded, an as is clause will not relieve the seller or the broker of their liability to disclose known material facts or those which should be known. d. If a property is being sold as is, the listing broker is not required to conduct a reasonably competent and diligent visual inspection of the property The content that provides the information for the above question is found in Chapter 2, "Red Flags and Liability". 10. If there is a likelihood that the buyer or seller cannot perform, which of the following is TRUE? a. Fiduciary duty demands that an agent NOT reveal things told to the agent in confidence, so a disclosure of the buyer's or seller's inability to perform should never be disclosed. b. The ability of the buyer or seller to perform goes to the heart of the transaction, and thus is not confidential information. c. If the inability to perform is due to financial difficulties, the agent must disclose the inability to perform, but if the inability to perform is due to complications of a divorce, no disclosure is required. d. If it will blow the deal, the agent can put off the disclosure until the client gets his/her ducks in a row and can perform The content that provides the information for the above question is found in Chapter 2, "1958 Restatement of Agency".

4 11. By law, sellers are not obligated to disclose that the property is or has been: (1) the site of a natural death, suicide, homicide, or any other crime classified as a felony; (2) owned or occupied by a person exposed to HIV, or diagnosed as having AIDS or any other disease not known to be transmitted through common occupancy of real estate; or (3) located in the vicinity of a sex offender. Therefore, if a buyer inquires regarding whether the owner of a subject property is HIV positive, the agent should always state, "NO," regardless of what the circumstances are. a. Wrong. The agent should always disclose all known material facts truthfully, no matter what the material fact is. b. Right. Federal law prohibits this disclosure, so the agent should always answer 'NO' to this question. c. Wrong. The agent should either answer the question truthfully, or respond that he/she is not required to answer that question. d. The agent should terminate the relationship with the buyer The content that provides the information for the above question is found in Chapter 2, "Intentional Misrepresentation". 12. If you are a listing agent for a property that requires a public report, you should. a. make sure you have a copy of the public report available for each buyer b. give a copy of the public report to each buyer and have the buyer acknowledge receipt of the public report c. allow the buyer an opportunity to review the public report before signing the purchase contract d. all of the above The content that provides the information for the above question is found in Chapter 3," Contract Disclosures". 13. Court decisions have created an obligation for licensees such that the real estate licensee has a duty to disclose to the buyer all material defects in the property which are known to the licensee, as well as those which are not within the diligent observation and attention of the buyer. a. This means that the licensee should conduct a thorough visual inspection. b. This means that the licensee should keep notes regarding the visual inspection, and document all possible red flags. c. This means that if material defects are revealed during the term of the escrow, the licensee should disclose those material defects in writing to all parties to the transaction. d. All of the above The content that provides the information for the above question is found in Chapter 2, "Duty to Conduct Visual Inspection".

5 14. Which of the following statements regarding agency is FALSE? a. The making of a contract by the agent is a representation by the agent that his principal is solvent or honorable. b. If the agent knows that the principal does not intend to perform the contract because of hopeless insolvency or other reason, the making of a contract for him under such condition subjects the agent to liability. c. If the agent fails to reveal circumstances which make it impossible for the principal to perform, the other party has the remedies given for misrepresentation. d. All of the above The content that provides the information for the above question is found in Chapter 2, "1958 Restatement of Agency". 15. Would you need a WDIIR (termite inspection report) if the home were being sold for cash? a. No, and with cash sales, a broker should never encourage a termite inspection. b. Yes, it is state law. c. Unfortunately, there is not state law that requires a WDIIR for the sale of a structure; it is a requirement of the lending institution. d. Yes, because the title company will require it. The content that provides the information for the above question is found in Chapter 3, Section The broker indemnification clause in the Arizona Association of REALTORS purchase contract will. a. safeguard the broker from any liability regarding material facts b. force errors and omissions insurance to cover all damages c. probably not relieve the broker from liability for disclosure of material facts d. hold up in court, and will cause a non-;disclosure case against a broker to be dismissed The content that provides the information for the above question is found in Chapter 2 "Red Flags and Liability". 17. If a licensee were required to disclose only known defects, but not those that are reasonably discoverable,. a. he or she would be shielded by his or her own ignorance of that which he or she professes to know b. such a construction would not only reward the unskilled broker or salesperson for his/her incompetence, but would, no doubt, provide the unscrupulous licensee the unilateral ability to protect himself at the expense of the inexperienced and unwary who rely upon him or her c. this would inevitably produce a disincentive for a seller's broker to make a diligent inspection d. all of the above The content that provides the information for the above question is found in Chapter 2, "Known vs. should have Known".

6 18. What if the pool barrier is not up to the local building code? a. The sale cannot take place. b. You and the seller must disclose that fact in writing to all parties to the transaction. c. The seller must bring the swimming pool barrier up to code before the close of escrow. d. Let the buyer beware The content that provides the information for the above question is found in Chapter 1, "Arizona Real Estate Code". 19. A licensee does not have to conduct an inspection on. a. residential property sold as part of a subdivision in which a Arizona Department of Real Estate public report is required (6 or more units) b. a single family residential resale c. a duplex resale d. a single family residential property that is being resold to a buyer who is purchasing it as a second home The content that provides the information for the above question is found in Chapter 1, "FAQs about the SPDS". 20. What kind of system is considered an on-site wastewater treatment facility? a. Any conventional septic tank system or alternative system installed at a site to treat and dispose of wastewater, predominantly of human origin, generated at that site. A conventional system consists of a septic tank that discharges effluent to a leach field or disposal field, usually configured as a trench (or trenches) or bed. b. A septic tank only. c. Municipality sewer system. d. A cesspool-sump The content that provides the information for the above question is found in Chapter 1, "Sewer/Wastewater Treatment". 21. If the seller states in the disclosure statement that the dishwasher is not functioning, but in the Real Estate Purchase Contract, the seller warrants that "all built-in appliances are in working order." Is the seller responsible for fixing the dishwasher? a. Yes. The seller is responsible for living up to his or her contractual obligations. b. No. Since the seller disclosed the non-functioning dishwasher, the seller is not liable to fix the dishwasher. The content that provides the information for the above question is found in Chapter 1, "FAQs about the SPDS".

7 22. The seller is prompted to disclose all water features on the property such as swimming pool, spa, hot tub, sauna or other water feature. What types of questions about the water feature(s) must also be answered? a. Are there any problems with any of these items? b. Are the water features heated, and if so, what type of heat? c. Can you hear the water running from the bedroom? d. Both a and b The content that provides the information for the above question is found in Chapter 4, "Water Features Probable Questions". 23. Which of the following statements is false? a. It is not the listing agent's responsibility to fill out the SPDS. b. It is the listing agent's responsibility to advise his or her client on how to properly complete the form. c. The listing agent should NOT review the SPDS, and should never advise his or her client on how to properly complete it. d. The agent should advise the seller of the seller's obligation to tell the truth and disclose material facts The content that provides the information for the above question is found in Chapter 1, "FAQs about the SPDS". 24. By law, a septic tank inspection needs to be performed. a. when and if the buyer requests it b. before the home can be listed for sale c. before an offer to purchase can be accepted d. before title to the property changes hands The content that provides the information for the above question is found in Chapter 3, "Wastewater Disclosure". 25. What happens if the seller presents the SPDS to the buyer, and the buyer does not respond within the required time frame? a. The seller must fix all defects in a workmanlike manner. b. The buyer can refuse to buy the property because of the defects, and still be in compliance with the contract. c. The buyer is automatically given an extension to the deadline. d. Silence is deemed as the buyer's decision to proceed, and the if the buyer does not respond to the SPDS, the buyer is bound to his promise to buy The content that provides the information for the above question is found in Chapter 1, "Timelines for the SPDS.