Free Kentucky State Law Practice Test — LicenseIQ

Question 1

On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

Accepted Answer

$20,000 x 0.50 = $10,000 to the buyer's broker.

Question 2

A real estate licensee who is not an attorney may:

Accepted Answer

Licensees may complete attorney-prepared forms but may not draft contracts, amendments or addenda or give legal advice - that is the unauthorized practice of law.

Question 3

A licensee representing the seller who learns the buyer will pay more than the offer must:

Accepted Answer

Loyalty and disclosure require the seller's agent to share material information that benefits the client. The agent owes the buyer-customer no confidentiality.

Question 4

Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:

Accepted Answer

Article 17 requires REALTORS to mediate or arbitrate contractual and specific non-contractual disputes with other REALTORS through the association.

Question 5

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 6

Under Commission rules, when must the parties receive copies of documents the licensee prepared and they signed?

Accepted Answer

201 KAR 11:121 §9(4) requires the principal broker to ensure signers receive copies at signing. Refusing copies on demand also violates KRS 324.160(4)(q).

Question 7

A consumer complaint against a licensee must generally be filed with the Commission within what time?

Accepted Answer

201 KAR 11:190 sets a one-year limit measured from actual or constructive knowledge. Five years is the record-retention period, which is a different rule.

Question 8

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 9

Mixing client trust funds with the broker's own business funds is:

Accepted Answer

Commingling client/escrow funds with the broker's operating funds is prohibited and grounds for discipline. Using those funds for personal purposes is conversion.

Question 10

In designated agency, who designates the licensees who will represent each client?

Accepted Answer

KRS 324.121 authorizes the principal broker to designate affiliated licensees in writing and communicate the designation to all affiliates.

Question 11

After presenting a buyer's offer to the seller, what notice must the seller's licensee give the buyer's licensee?

Accepted Answer

201 KAR 11:121 §2(2)(a) requires written notice of the date and time of presentation to the seller.

Question 12

Which circumstance authorizes emergency action, such as freezing a broker's escrow account, under the Commission's complaint rules?

Accepted Answer

201 KAR 11:190 authorizes emergency action for two or more escrow violations, one violation over $500, or a substantiated threat to public health, safety, or welfare. A single $100 violation alone does not meet the threshold.

Question 13

In a Kentucky brokerage with multiple licensees, who owns the listing contracts?

Accepted Answer

201 KAR 11:121 §7 provides that the principal broker owns all written brokerage contracts, including listing, purchase, and exclusive agency agreements.

Question 14

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 15

A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $6,000 / $150,000 = 0.04 = 4%.

Question 16

From whom may a Kentucky sales associate accept compensation for licensed activities?

Accepted Answer

KRS 324.160(4)(f) bars accepting valuable consideration for licensed acts from anyone other than the principal broker.

Question 17

When the Recovery Fund pays a claim caused by a licensee, what happens to that licensee's license?

Accepted Answer

KRS 324.420(3) suspends the license (or permits permanent revocation) until full reimbursement plus 10% per annum interest. The fund fee is not insurance that excuses the licensee.

Question 18

Under KRS 324.160(5), a licensee's use of scare tactics or blockbusting is treated as:

Accepted Answer

KRS 324.160(5) treats violation of the federal Fair Housing Act, including scare tactics or blockbusting, as improper dealing under (4)(u).

Question 19

A sales associate wants to buy a property listed with her own brokerage. What must she do?

Accepted Answer

KRS 324.160(4)(e) requires the licensee to note licensee status in writing on the offer before buying property listed with the licensee or the licensee's broker.

Question 20

A home sells for $400,000 with a 5% total commission. What is the total commission?

Accepted Answer

$400,000 x 0.05 = $20,000.

Question 21

A licensee's advertising must generally:

Accepted Answer

Ads must identify the licensed broker/brokerage; salespersons cannot advertise under only their own name.

Question 22

In a lease, the tenant holds a ____ estate and the landlord holds a ____.

Accepted Answer

The lessee has a leasehold (non-freehold) estate; the lessor retains the leased fee interest plus the reversion.

Question 23

A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

Accepted Answer

Total = $520,000 x 0.05 = $26,000. Buyer broker gets 2.5% = $13,000, leaving $13,000 for the listing side. Salesperson = $13,000 x 0.60 = $7,800.

Question 24

The deed clause that defines the extent of the estate granted, often beginning 'to have and to hold,' is the:

Accepted Answer

The habendum clause defines the estate conveyed; the granting clause contains the words of conveyance.

Question 25

Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

Accepted Answer

Agreeing with competitors to refuse to deal with another business is an illegal group boycott.

Kentucky real estate state law practice test

1. On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

2. A real estate licensee who is not an attorney may:

3. A licensee representing the seller who learns the buyer will pay more than the offer must:

4. Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:

5. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

6. Under Commission rules, when must the parties receive copies of documents the licensee prepared and they signed?

7. A consumer complaint against a licensee must generally be filed with the Commission within what time?

8. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

9. Mixing client trust funds with the broker's own business funds is:

10. In designated agency, who designates the licensees who will represent each client?

11. After presenting a buyer's offer to the seller, what notice must the seller's licensee give the buyer's licensee?

12. Which circumstance authorizes emergency action, such as freezing a broker's escrow account, under the Commission's complaint rules?

13. In a Kentucky brokerage with multiple licensees, who owns the listing contracts?

14. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

15. A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

16. From whom may a Kentucky sales associate accept compensation for licensed activities?

17. When the Recovery Fund pays a claim caused by a licensee, what happens to that licensee's license?

18. Under KRS 324.160(5), a licensee's use of scare tactics or blockbusting is treated as:

19. A sales associate wants to buy a property listed with her own brokerage. What must she do?

20. A home sells for $400,000 with a 5% total commission. What is the total commission?

21. A licensee's advertising must generally:

22. In a lease, the tenant holds a estate and the landlord holds a .

23. A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

24. The deed clause that defines the extent of the estate granted, often beginning 'to have and to hold,' is the:

25. Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

Sources