CA Real Estate Exam Practice Test

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  • 1/34 Questions

    A statement that discloses the presence of various environmental hazards includes disclosures for which of the following substances?

    • Asbestos
    • Lead based paint
    • Radon gas
    • All of the choice are correct
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About This Quiz

Do you want to be a real estate agent? Try this CA real estate exam practice test and check your knowledge regarding the same. Real estate agents aim to help people who are looking to buy a house at a specific place. With that CA Real Estate Exam around the corner, the practice test below is designed to help you See moresee how ready you are for the California real estate salesperson. So, give it a shot, and let's see how much you can score. Wishing you the best of luck!

CA Real Estate Exam Practice Test - Quiz

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  • 2. 

    Private restrictions on the use of land may be created by:

    • Private land use controls

    • Written agreement

    • A developer's general plan restrictions a subdivision

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Private restrictions on the use of land can be created through various means. Private land use controls refer to the regulations and rules set by private individuals or organizations to restrict the use of their land. A written agreement between parties can also establish restrictions on land use. Additionally, a developer's general plan restrictions in a subdivision can impose limitations on how the land can be used. Therefore, all of the options listed (private land use controls, written agreement, and a developer's general plan restrictions in a subdivision) can create private restrictions on the use of land.

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  • 3. 

    As used in real estate practices, the land of a riparian owner borders on:

    • A river;

    • A stream;

    • A watercourse;

    • Any of the above.

    Correct Answer
    A. Any of the above.
    Explanation
    In real estate practices, the land of a riparian owner can border on a river, a stream, or a watercourse. The term "riparian" refers to the ownership rights and responsibilities of a landowner whose property is adjacent to a body of water. These rights typically include access to and use of the water, as well as certain responsibilities for maintaining the watercourse. Therefore, any of the options mentioned (river, stream, or watercourse) can be considered as the land that borders a riparian owner's property.

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  • 4. 

    Legally and technically, a property is defined as:

    • That which is capable of involuntary transfer

    • Things with buyers or sellers

    • Rights or interests which a person has in a thing owned

    • Only personal property

    Correct Answer
    A. Rights or interests which a person has in a thing owned
    Explanation
    The correct answer is "rights or interests which a person has in a thing owned." This definition encompasses the legal and technical aspects of a property. It recognizes that a property is not just the physical object itself but also includes the rights and interests that a person has in that object. This definition allows for the concept of ownership and transfer of property, making it a comprehensive and accurate explanation.

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  • 5. 

    When a tenant voluntarily moves out of his apartment with the intention to never return, it would be described as:

    • Abandonment

    • Notice to quit

    • Eviction

    • Adverse possession

    Correct Answer
    A. Abandonment
    Explanation
    When a tenant voluntarily moves out of his apartment with the intention to never return, it would be described as abandonment. Abandonment refers to the act of giving up or deserting a property or lease without any intention of coming back. In this scenario, the tenant has made a deliberate decision to vacate the apartment permanently, indicating abandonment of the lease agreement.

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  • 6. 

    Broker Jones represented a young man in the sale of his home. Broker Jones did not consider the age of the young man when he listed and sold the home. After the grant deed had been signed and delivered into escrow, the title company discovered the young man who signed the deed was not yet 18 years old and was not emancipated. The grant deed would be:

    • Illegal

    • Void

    • Binding

    • Valid

    Correct Answer
    A. Void
    Explanation
    The grant deed would be void because the young man who signed the deed was not yet 18 years old and was not emancipated. This means that the deed is considered invalid and has no legal effect.

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  • 7. 

    Mr. and Mrs. Nasr were denied a home loan due to a very negative credit report. They obtained a copy of the report and found that the critical information contained in the report was false. They sent the credit reporting agency all the information necessary to disprove the false information and requested that the agency correct their records. If the credit reporting agency fails to correct the information in their files, the Nasrs could file a court action and seek:

    • Actual damages

    • Attorney's fees, and court costs

    • Punitive damages

    • Any of the above

    Correct Answer
    A. Any of the above
    Explanation
    If the credit reporting agency fails to correct the false information in their files, the Nasrs could file a court action and seek any of the above options. This means that they have the right to pursue actual damages, attorney's fees, court costs, or even punitive damages as a result of the agency's failure to correct the inaccurate information in their credit report. The Nasrs have taken the necessary steps to disprove the false information and have requested a correction, but if the agency fails to comply, they have legal recourse to seek compensation for the damages caused by the agency's negligence.

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  • 8. 

    Puffing defines the method by which an agent

    • Convinces the seller to pay a greater commission than is typical for the area

    • Convinces an appraiser to report a greater appraised value to the lender

    • Convinces the seller during his listing presentation that the he is well connected in the neighborhood

    • Exaggerates the features or condition of the property

    Correct Answer
    A. Exaggerates the features or condition of the property
    Explanation
    The correct answer is "exaggerates the features or condition of the property." Puffing refers to the practice of a real estate agent exaggerating or overemphasizing the positive aspects of a property in order to make it more appealing to potential buyers. This can include highlighting certain features or making claims about the condition of the property that may not be entirely accurate. It is a common sales tactic used to create interest and attract buyers, but it is important for buyers to conduct their own due diligence and verify the claims made by the agent.

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  • 9. 

    Which of the following appraisal reports would be (is) the most comprehensive and complete?

    • Narrative report

    • Abbreviated report

    • Letter form report

    • Short form report

    Correct Answer
    A. Narrative report
    Explanation
    A narrative report would be the most comprehensive and complete appraisal report. Unlike other types of reports, such as abbreviated, letter form, or short form reports, a narrative report provides a detailed and comprehensive analysis of the subject property. It includes a thorough description of the property, analysis of market data, and explanation of the valuation methods used. This type of report allows the appraiser to provide a comprehensive and detailed assessment of the property's value, making it the most comprehensive and complete option among the given choices.

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  • 10. 

    Which listing must contain this statement, "the amount of our rate of commission is not fixed by law. It is set by each broker individually and may be negotiable between the seller and broker."

    • A listing on a 50 unit apartment building

    • A listing on a commercial building

    • A listing on a building used for manufacturing

    • A listing on one-to-four residential units

    Correct Answer
    A. A listing on one-to-four residential units
    Explanation
    The statement about the rate of commission being negotiable between the seller and broker is required to be included in a listing on one-to-four residential units. This is because the rate of commission for residential properties is not fixed by law and can vary between brokers. In contrast, commercial buildings and buildings used for manufacturing may have different regulations regarding commission rates, and the statement may not be applicable to them. Similarly, a 50 unit apartment building may fall under the category of commercial property, depending on its use and zoning regulations.

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  • 11. 

    Linda applied for a real estate loan. The loan application requested her to disclose her race and marital status. What can she do?

    • Refuse to fill out that portion of the loan application

    • Sue the lender and the real estate broker

    • Nothing

    • Completely fill out the loan application if she wants to get the loan

    Correct Answer
    A. Refuse to fill out that portion of the loan application
    Explanation
    Linda can refuse to fill out that portion of the loan application because it is illegal for lenders and real estate brokers to discriminate based on race or marital status. By refusing to disclose this information, Linda is protecting her rights and ensuring that she is not subjected to any discriminatory practices.

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  • 12. 

    Joe owned a grocery store and wanted to raise some money. He decided to sell his land and building to an investor and leased it back to himself in order to continue running his grocery store there. Which of the following would be a tax benefit to Joe?

    • All capital gains for Joe are deferred

    • Joe has a new tax base for his future depreciation of the building

    • Joe's rent payments to the investor will be fully deductible for income tax purposes as a business expense

    • None of the above

    Correct Answer
    A. Joe's rent payments to the investor will be fully deductible for income tax purposes as a business expense
    Explanation
    Joe's rent payments to the investor will be fully deductible for income tax purposes as a business expense. This means that Joe can deduct the rent payments he makes to the investor from his taxable income, reducing his overall tax liability. This provides a tax benefit to Joe as it lowers the amount of income he is required to pay taxes on.

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  • 13. 

    Generally, when the government forces the sale of private land for public use it is governed by the due process of law and is accomplished through:

    • The exercise of the police power

    • Eminent domain

    • Estate in reversion

    • Escheat

    Correct Answer
    A. Eminent domain
    Explanation
    When the government forces the sale of private land for public use, it is done through the legal concept of eminent domain. Eminent domain allows the government to acquire private property for public use, as long as they provide just compensation to the owner. This power is derived from the Fifth Amendment of the United States Constitution, which ensures that private property cannot be taken for public use without fair compensation. Therefore, eminent domain is the correct answer in this scenario.

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  • 14. 

    The primary purpose of a site analysis by an appraiser is to determine the:

    • Applicable zoning laws

    • Highest and best use

    • Soil condition

    • Available amenities

    Correct Answer
    A. Highest and best use
    Explanation
    A site analysis conducted by an appraiser serves the primary purpose of determining the highest and best use of the property. This involves evaluating various factors such as market demand, location, potential income, and development possibilities to identify the most advantageous and profitable use of the site. By determining the highest and best use, appraisers can provide accurate assessments of the property's value and assist clients in making informed decisions regarding its utilization and potential.

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  • 15. 

    The reason an appraiser determines the value of an income producing property as of a "given date" is to indicate:

    • The age of the improvements as of a given date

    • The date the appraiser inspected the property

    • The market conditions influencing the value of the property as of a given point in time

    • The value of the seller's equity as of a given date

    Correct Answer
    A. The market conditions influencing the value of the property as of a given point in time
    Explanation
    An appraiser determines the value of an income producing property as of a "given date" to indicate the market conditions influencing the value of the property at that specific point in time. This is important because market conditions can fluctuate and have a significant impact on the value of the property. By assessing the market conditions as of a given date, the appraiser can provide an accurate and up-to-date valuation of the property.

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  • 16. 

    Which of the following option highlights an example of police power?

    • A condemnation action on the property for construction of a freeway

    • CC&Rs placed in a deed by a developer

    • Enforcement of contracts by equitable civil proceedings in court

    • Zoning laws which restrict and limit the use of land

    Correct Answer
    A. Zoning laws which restrict and limit the use of land
    Explanation
    Zoning laws are one example of police power.

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  • 17. 

    A tenant leased a building from an owner. The owner then sold the building to a new owner. The tenant's financial situation changed after the building was sold. Which of the following is true?

    • The new owner can make the lessee pay-off the lease

    • The change in lessee's financial situation is none of the new owner's business

    • The new owner can increase the security deposit required from the tenant

    • The new owner can raise the rent

    Correct Answer
    A. The change in lessee's financial situation is none of the new owner's business
    Explanation
    After the building is sold to a new owner, the new owner does not have the authority to intervene or make any demands related to the tenant's financial situation. The change in the lessee's financial situation is considered personal and unrelated to the new owner's business. Therefore, the new owner cannot make the lessee pay off the lease, increase the security deposit, or raise the rent based on the tenant's financial situation.

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  • 18. 

    Which of the following is an appraiser's primary concern in the appraisal of a residential subdivision?

    • Square foot area of each home

    • Marketability and acceptability

    • Functional utility

    • The adjoining neighborhood

    Correct Answer
    A. Marketability and acceptability
    Explanation
    An appraiser's primary concern in the appraisal of a residential subdivision is the marketability and acceptability of the subdivision. This means that the appraiser is primarily focused on determining the attractiveness of the subdivision to potential buyers and its overall desirability in the market. Factors such as location, amenities, infrastructure, and the overall appeal of the subdivision to buyers will be considered in the appraisal process. The square foot area of each home, functional utility, and the adjoining neighborhood are also important factors but may not be the primary concern in this particular appraisal.

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  • 19. 

    Government land use, planning, and zoning laws are important examples of:

    • The exercise of eminent domain

    • Use of police power

    • Deed restrictions

    • Escheatment

    Correct Answer
    A. Use of police power
    Explanation
    Government land use, planning, and zoning laws are important examples of the use of police power. Police power refers to the authority of the government to regulate and control the use of land in order to promote public health, safety, and welfare. Through land use, planning, and zoning laws, the government can establish regulations and restrictions on how land can be used, such as determining where residential, commercial, or industrial areas should be located, setting building codes and standards, and protecting natural resources. These laws aim to maintain order, protect the community, and ensure the overall well-being of society.

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  • 20. 

    When an owner acquires land which includes riparian rights, such riparian rights:

    • Give the owner absolute ownership of the water

    • Must be expressed in the trust deed

    • May be determined accurately from an examination of public records at the County Recorder's Office

    • Concern the use of moving water, such as a stream or brook within the watershed

    Correct Answer
    A. Concern the use of moving water, such as a stream or brook within the watershed
    Explanation
    Riparian rights refer to the rights of a landowner to use and access water from a stream or brook that runs through or borders their property. These rights are related to the use of moving water within a specific geographical area known as the watershed. It means that the owner has certain privileges and responsibilities regarding the use and management of the water resources in the area. These rights are not absolute ownership of the water itself, but rather pertain to the use and control of the water within the defined watershed.

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  • 21. 

    Each of the following elements must be established to obtain an easement by prescription, except:

    • Use of the property which is hostile and adverse to the true owner

    • The existence of a claim of right or color of title

    • Open and notorious use which is continuous and uninterrupted for a period of five years

    • A confrontation with the true owner

    Correct Answer
    A. A confrontation with the true owner
    Explanation
    To obtain an easement by prescription, several elements must be established. These include the use of the property which is hostile and adverse to the true owner, the existence of a claim of right or color of title, and open and notorious use which is continuous and uninterrupted for a period of five years. However, a confrontation with the true owner is not necessary to establish an easement by prescription. This means that even if there has been no direct confrontation or dispute with the true owner, the other elements can still be fulfilled to obtain the easement.

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  • 22. 

    The ultimate test of functional utility is:

    • Maintenance costs

    • Design

    • Utility costs

    • Marketability

    Correct Answer
    A. Marketability
    Explanation
    The ultimate test of functional utility is marketability. This means that the true measure of how useful a product or service is lies in its ability to be sold and accepted by the market. Even if a product has low maintenance costs, a good design, and low utility costs, if it is not marketable and cannot generate sales or demand, then its functional utility is ultimately limited. Marketability encompasses factors such as consumer demand, competitive advantage, and the ability to meet customer needs and preferences.

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  • 23. 

    Royal Bakers bought a farm. At the time of the purchase, the seller Thomson was growing corn on the north 40 acres of the farm. Thomson intended to harvest the corn before the close of escrow but never got around to it. No mention was made of the corn in the sales agreement and/or escrow instructions. Escrow has now closed, Royal Bakers is in possession and it is time to harvest the corn. Who gets to harvest the corn?

    • The buyer would have the right to harvest the corn because he always intended to do so

    • The buyer would get to harvest the corn because it goes with the land and is considered real property

    • The buyer would get to harvest the corn because of his equity in the corn

    • The seller would get to harvest the corn because the corn is his personal property and was not mentioned in the sales agreement

    Correct Answer
    A. The seller would get to harvest the corn because the corn is his personal property and was not mentioned in the sales agreement
    Explanation
    The seller would get to harvest the corn because the corn is considered his personal property and was not mentioned in the sales agreement. Since no mention of the corn was made in the sales agreement or escrow instructions, it remains the seller's personal property until it is harvested. Therefore, the buyer does not have the right to harvest the corn.

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  • 24. 

    When determining the value of a property, which of the following dates is the most important to an appraiser?

    • The date the contract was signed

    • The date the loan was funded

    • The date the transaction was recorded;

    • The date the escrow closed

    Correct Answer
    A. The date the contract was signed
    Explanation
    The date the contract was signed is the most important to an appraiser when determining the value of a property. This is because the contract signifies the agreement between the buyer and the seller, outlining the terms and conditions of the sale. The contract establishes the price at which the property is being sold, which is a crucial factor in determining its value. The other dates mentioned, such as the date the loan was funded, the date the transaction was recorded, and the date the escrow closed, are also important in the overall process, but they are not as directly tied to the value of the property as the date the contract was signed.

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  • 25. 

    After an appraiser has collected all the data, what is the next step in the appraisal process?

    • Simply average out the value estimates

    • Reconcile or correlate the adjusted sales price of the comparables

    • Assign appropriate value to individual estimates and average the total number

    • Give an opinion of value

    Correct Answer
    A. Reconcile or correlate the adjusted sales price of the comparables
    Explanation
    After collecting all the data, the next step in the appraisal process is to reconcile or correlate the adjusted sales price of the comparables. This involves analyzing the data collected, comparing it to the subject property, and making adjustments for any differences. The appraiser will then reconcile or correlate the adjusted sales prices of the comparable properties to determine a final value estimate for the subject property.

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  • 26. 

    Which of these is an example of a freehold estate?

    • The interested created by a trust deed

    • An estate at will

    • A life estate

    • A leasehold estate

    Correct Answer
    A. A life estate
    Explanation
    A freehold estate refers to ownership of real property for an indefinite period of time. A life estate is an example of a freehold estate because it grants the holder ownership and possession of the property for the duration of their life. This means that the owner has the right to use and enjoy the property during their lifetime, but they cannot sell or transfer it to someone else. After the owner's death, the property typically reverts to the original owner or passes to a designated remainderman.

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  • 27. 

    If one party agrees to indemnify another for a named loss in return for periodic payments, it is called:

    • A fidelity bond

    • Insurance

    • Performance agreement

    • None of the above

    Correct Answer
    A. Insurance
    Explanation
    If one party agrees to indemnify another for a named loss in return for periodic payments, it is called insurance. Insurance is a contract in which an individual or entity agrees to provide financial protection or compensation for specified risks or losses in exchange for regular premium payments. In this scenario, the party agreeing to indemnify another is essentially providing insurance coverage for the named loss, making insurance the correct answer.

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  • 28. 

    Joseph and Maria, husband and wife, own a home as community property. If only one spouse signed the listing to sell the property, the agreement is:

    • A legal contract

    • An unenforceable contract

    • An unbinding contract

    • A violation of the Statute of Frauds

    Correct Answer
    A. A legal contract
    Explanation
    If only one spouse signed the listing to sell the property, the agreement is a legal contract. In community property states, such as California, both spouses have equal ownership rights to the property. Therefore, even if only one spouse signs the listing agreement, it is still considered a legal contract because the signing spouse has the authority to act on behalf of the community property. The agreement would be enforceable, and both spouses would be bound by its terms.

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  • 29. 

    Who signs the promissory note and mortgage?

    • Mortgagor

    • Mortgagee

    • Lender

    • Beneficiary

    Correct Answer
    A. Mortgagor
    Explanation
    The mortgagor is the party who signs the promissory note and mortgage. This is because the mortgagor is the borrower who pledges their property as collateral for a loan. By signing these documents, the mortgagor agrees to repay the loan and allows the lender to take possession of the property if the loan is not repaid. The mortgagee, on the other hand, is the lender who provides the loan, and the beneficiary is typically a third party who benefits from the mortgage.

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  • 30. 

    A real estate appraiser reduced his opinion of the value of a home because the local sewer system was in poor condition and in need of repair. This loss in value would be classified as:

    • Physical obsolescence

    • Functional obsolescence

    • Physical deterioration

    • Economic obsolescence

    Correct Answer
    A. Economic obsolescence
    Explanation
    The reduction in value of the home due to the poor condition of the local sewer system is classified as economic obsolescence. Economic obsolescence refers to a decrease in value caused by external factors that affect the property's desirability or usefulness, such as changes in the surrounding area or economic conditions. In this case, the need for sewer system repairs negatively impacts the property's value, as potential buyers may be deterred by the inconvenience and potential costs associated with the issue.

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  • 31. 

    Gross leases are most often used with:

    • Residential property

    • Retail space

    • Office space

    • Shopping malls

    Correct Answer
    A. Residential property
    Explanation
    Gross leases are most often used with residential property because they are designed to simplify the rental process for tenants. In a gross lease, the tenant pays a fixed amount of rent each month, and the landlord is responsible for covering all expenses such as property taxes, insurance, and maintenance. This type of lease is commonly used in residential settings where tenants prefer the convenience of a single monthly payment without having to worry about additional costs or responsibilities associated with the property.

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  • 32. 

    A bona fide listing to sell real property must contain:

    • Consideration, mutual consent, competent parties, and writing

    • Consideration, mutual consent, capable parties expressed time element and price

    • Capable parties, mutual consent, lawful object, consideration, and be in writing

    • Consideration, price, lawful object, competent parties, and legally sufficient writing

    Correct Answer
    A. Capable parties, mutual consent, lawful object, consideration, and be in writing
    Explanation
    The correct answer is "capable parties, mutual consent, lawful object, consideration, and be in writing." In order for a listing to sell real property to be considered bona fide, it must involve parties who are legally capable of entering into a contract, there must be mutual agreement or consent between the parties, the object or purpose of the contract must be lawful, there must be consideration or something of value exchanged, and the agreement must be in writing to be legally enforceable.

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  • 33. 

    The fiduciary relationship between an agent and the principal is comparable to the relationship between:

    • Trustor and beneficiary

    • Mortgagor and mortgagee

    • Trustor and trustee

    • Trustee and beneficiary

    Correct Answer
    A. Trustee and beneficiary
    Explanation
    The fiduciary relationship between an agent and the principal is comparable to the relationship between a trustee and a beneficiary. In both cases, there is a legal and ethical duty to act in the best interests of the other party and to avoid any conflicts of interest. The agent and trustee both have a responsibility to ensure that the principal and beneficiary, respectively, are protected and their interests are prioritized.

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  • 34. 

    A seller is required to deliver the Homeowner's Guide to Earthquake Safety to the buyer of any one-to-four-unit residential properties built prior to:

    • 1952

    • 1960

    • 1970

    • 1975

    Correct Answer
    A. 1960
    Explanation
    The correct answer is 1960. This means that the seller is required to deliver the Homeowner's Guide to Earthquake Safety to the buyer of any one-to-four-unit residential properties built prior to 1960. This guide is likely a resource that provides information and tips on how to ensure the safety of the property and its occupants in the event of an earthquake.

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  • Current Version
  • Jan 15, 2025
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 08, 2011
    Quiz Created by
    Kalidatu

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