Fair housing and running a practice

A broker properly deposits a buyer's earnest money into a trust account. After the transaction closes, the broker leaves their earned $15,000 commission in the trust account for six months to pay business expenses directly from it. Which statement applies to the broker's handling of the earned commission?

1. The practice constitutes illegal commingling of personal and trust funds
2. The business expenses must be paid exclusively from a secondary escrow account
3. The action is permissible provided the balance stays below state maximum balances
4. The practice is acceptable if clear ledger records are properly maintained
5. The funds remain legitimate trust money due to their transaction origins

An agent shows minority buyers only homes in high-minority neighborhoods and away from predominantly white areas they requested. This is:

1. Permissible if the agent documents reasons for each showing.
2. Reverse redlining, not steering, because minority buyers are involved.
3. Legal if based on buyer's unstated racial preferences.
4. Channeling buyers to areas likely to be a better financial fit.
5. Steering, a prohibited practice under fair housing law.

An agent tells homeowners that minority families are moving in and property values will decline, urging them to sell quickly. Identify the illegal practice and why it violates fair housing law.

1. Coercion; pressures homeowners with threats
2. Steering; channels buyers to particular areas based on race
3. Blockbusting; exploits prejudice and panic selling
4. Redlining; denies services based on neighborhood composition
5. Disparate impact; policy has discriminatory effect

A listing agent publishes a property's square footage in the MLS based entirely on the seller's verbal estimate. The buyer later discovers the home is significantly smaller than advertised. Is the agent potentially liable?

1. Yes, the agent failed to verify the material facts.
2. Yes, but only if the agent intentionally committed fraud.
3. Yes, because agents must hire appraisers to measure homes.
4. No, agents are protected when relying on seller claims.
5. No, buyers are solely responsible for checking dimensions.

A property manager holds tenant security deposits. Upon the sale of the building, the broker uses the retained security deposits to pay for final repairs required by the buyer's inspection. What legal violation has occurred?

1. Improper proration of rents
2. Violation of the statute of frauds
3. Commingling of earnest money
4. Conversion of trust funds
5. Breach of the implied warranty of habitability

A property manager requires a minority applicant to have income of 4 times the rent but only requires white applicants to have 3 times the rent. Is this illegal, and under what theory?

1. Yes, but only state law, not federal law
2. No, because income requirements are legitimate business criteria
3. Yes, disparate treatment under the Fair Housing Act
4. No, as long as the criteria are consistently applied
5. Yes, disparate impact because the policy appears neutral

A buyer gives a broker a $5,000 earnest money deposit. The purchase contract requires deposit within three business days. The broker deposits the funds after five business days. Which statement is correct?

1. The broker may keep the funds in an operating account until closing
2. The buyer may cancel the contract automatically
3. The delay is acceptable because the funds were eventually deposited
4. The broker violated trust fund handling requirements

The buyer's agent received an earnest money check and kept it in a desk drawer for two weeks, past the contract's three-business-day deposit deadline. The agent then released the funds to the seller for repairs based only on the buyer's oral approval. Which violations occurred?

1. Only the delayed deposit violated escrow rules
2. Only the oral authorization violated escrow rules
3. No violation because oral approval suffices
4. Commingling of trust funds
5. Delayed deposit and oral approval disbursement

A listing advertisement states, "Perfect for young professionals, no children, ideal for Christian family." Which protected classes are implicated and what fair housing rules does the ad violate?

1. Familial status only; disparate impact liability
2. Disability and age; discriminatory advertising practices
3. National origin and sex; illegal advertising practice
4. Familial status and religion; discriminatory ads
5. Race and color; steering and blockbusting

A buyer's agent directs a client to a specific home inspector because the inspector privately pays the agent a fifty-dollar referral fee for every inspection. Which statement applies to this situation?

1. The inspector alone is exclusively liable for offering an unauthorized payment
2. The referral fee is strictly acceptable if it is paid outside of closing
3. The agent violated fiduciary duties and kickback regulations
4. The agent fulfilled their fiduciary duty by securing a qualified inspector
5. The agent earned a completely legally permissible business referral commission

A property manager enforces a blanket policy rejecting any applicant with a criminal record, resulting in disproportionate rejection of minority applicants. Which statement is correct?

1. The manager must accept all applicants with criminal records to avoid liability.
2. The policy is permissible because it applies equally to all applicants.
3. The policy is lawful because criminal records are not a protected class.
4. Disparate impact requires proof of intent, so no liability exists.
5. Disparate-impact liability if policy lacks legitimate business necessity.

Two brokers agree to charge identical commission rates to avoid undercutting. A third broker refuses and is excluded. This is:

1. Price-fixing; competing brokers may not agree on commission rates.
2. Lawful if all brokers in the market agree to the same rate.
3. An illegal group boycott but not price-fixing.
4. Permissible because brokers may set standard rates independently.
5. A violation only if written agreement exists.

A designated broker orally delegates trust account administration and advertising review to an office manager without written delegation or policy. A newly licensed associate then misappropriates trust funds. Who remains accountable?

1. The associate only; the broker has no vicarious liability
2. Designated broker; no documentation can reduce exposure
3. Designated broker; oral delegation does not shift the supervision duty
4. No one; the state guarantee fund indemnifies the brokerage
5. Office manager only; oral delegation shifts accountability

A buyer verbally tells their real estate agent they do not care about conducting a mold inspection, despite noticeable musty odors originating in the basement. What is the most important risk management action for the licensee in this situation?

1. Accept the verbal waiver and immediately proceed to the final closing
2. Verbally assure the buyer that musty odors never impact property values
3. Personally hire a professional mold remediator to eliminate the odors
4. Refuse to draft the purchase offer until an inspection is fully completed
5. Document the buyer's waiver of the environmental inspection in writing

A broker managing a rental property collects a $1,000 cash rent payment from a tenant. The broker immediately uses $200 of the cash to pay for an emergency plumbing repair and deposits the remaining $800 into the brokerage trust account. Which statement applies to the broker's actions?

1. The broker violated trust fund laws because property repairs must be paid solely by the tenant
2. The broker violated trust accounting duties by failing to deposit the gross receipts first
3. The broker acted correctly by directly mitigating an emergency property maintenance issue
4. The broker fulfilled their duties provided the property owner receives an exact expense receipt
5. The broker maintained fiduciary standards by ensuring the net balance was promptly deposited

A brokerage relies on an AI advertising platform with automatic exclusions based on inferred demographics. The broker assumes platform defaults ensure fair housing compliance. What is the broker's responsibility?

1. No responsibility because the platform's algorithms are not controlled by the broker.
2. Disable all algorithmic targeting and advertise only through broadcast media.
3. Maintain oversight and document review of platform targeting choices.
4. Include a disclaimer that the brokerage does not discriminate in ads.
5. Rely on platform defaults as they are designed to comply with laws.