Free Minnesota Property Practice Test — LicenseIQ

Question 1

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 2

A borrower facing default voluntarily conveys the property to the lender in exchange for release of the debt. This is a:

Accepted Answer

In a deed in lieu, the borrower voluntarily deeds the property to the lender, which avoids the foreclosure process; the lender must agree, and the borrower should get a written release of any remaining debt. In a short sale, the property is sold to a third party for less than owed with lender approval. Credit-reporting effects vary by lender and situation, so licensees should not promise a borrower any particular credit outcome.

Question 3

A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

Accepted Answer

Money belonging to others goes into a trust account; depositing it in an operating account is commingling.

Question 4

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 5

A seller knows of no wells on the property. How can the seller avoid filing a well disclosure certificate at closing?

Accepted Answer

Section 103I.235, subd. 1(c) provides that no certificate is required if the deed includes the statement: The Seller certifies that the Seller does not know of any wells on the described real property.

Question 6

The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

Accepted Answer

Substitution: a buyer will pay no more than the cost of an equally desirable alternative.

Question 7

In a life estate, the person who receives the property when the life tenant dies is the:

Accepted Answer

The life tenant has a present interest; the remainderman holds a future interest. If the property returns to the grantor, it is a reversion.

Question 8

Which deed provides the GREATEST protection to the grantee?

Accepted Answer

A general warranty deed contains the fullest covenants, warranting title against all defects, including those arising before the grantor owned it.

Question 9

A lender's title insurance policy protects:

Accepted Answer

A lender's (mortgagee's) policy protects the lender's interest up to the loan amount and declines as the loan is paid. An owner's (fee) policy protects the owner.

Question 10

A neighbor's new garage extends two feet over the property line. This is an:

Accepted Answer

An encroachment is an improvement that intrudes onto another's land; a survey establishes the boundary.

Question 11

The Minnesota Common Interest Ownership Act (ch. 515B) generally governs common interest communities created:

Accepted Answer

Section 515B.1-102 applies chapter 515B to common interest communities created in Minnesota on and after June 1, 1994. Older condominiums remain under chapters 515 or 515A, with certain 515B sections applying.

Question 12

Annual property taxes are $5,110. The seller has paid nothing, and closing is on April 30 (the seller owns the day of closing; use a 365-day year, non-leap). What does the seller owe the buyer for taxes at closing?

Accepted Answer

Daily tax: 5,110 / 365 = $14.00. Days January 1 through April 30: 31 + 28 + 31 + 30 = 120. Seller's share: 120 x 14 = $1,680, credited to the buyer. The 12-month method (5,110 x 4/12 = $1,703.33) is not the stated method.

Question 13

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 14

In a general warranty deed, the grantor's promise that he owns the property and has the right to convey it is the covenant of:

Accepted Answer

Seisin = ownership and right to convey. Quiet enjoyment protects against superior title claims; further assurance obligates the grantor to cure defects; warranty forever defends title against all claims.

Question 15

In a mortgage, the borrower who pledges the property as security is the:

Accepted Answer

The mortgagor (borrower) gives the mortgage to the mortgagee (lender) in exchange for the loan.

Question 16

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 17

The periodic report a property manager gives the owner showing rents and other income collected and expenses paid for the period is the:

Accepted Answer

The income statement (P&L) summarizes income and expenses for the accounting period, typically monthly.

Question 18

Adverse possession allows someone to acquire title by:

Accepted Answer

Adverse possession requires open, notorious, exclusive, continuous and hostile use for the statutory period. A tenant's possession is permissive, not hostile. (Reclassified to section 1 / CORE.)

Question 19

Before placing a for-sale sign on an owner's property, a Minnesota licensee must have:

Accepted Answer

Section 82.66, subd. 1(a) requires a signed listing agreement or written authorization before advertising, and states that placing a sign on the property is advertising.

Question 20

A property sells for $300,000. The buyer assumes the seller's existing $120,000 mortgage, which remains on the property. What is the state deed tax?

Accepted Answer

Net consideration excludes liens remaining at the time of sale: 300,000 - 120,000 = 180,000. Deed tax: 180,000 x 0.0033 = $594. Taxing the full price gives $990, the tempting error.

Question 21

A salesperson is charged with a felony unrelated to real estate. What must the salesperson do?

Accepted Answer

Section 82.65, subd. 5 requires notice of being charged with, convicted of, or pleading guilty or nolo contendere to any felony, and subd. 2 sets a ten-day deadline. The duty arises at the charge, not only on conviction.

Question 22

When must a Minnesota seller of residential property provide the written seller's disclosure?

Accepted Answer

Section 513.55 requires the written disclosure before signing an agreement to sell or transfer residential real property.

Question 23

Which is NOT a protected class in real property transactions under §363A.09?

Accepted Answer

Section 363A.09 lists race, color, creed, religion, national origin, sex, gender identity, marital status, public assistance status, disability, sexual orientation, and familial status. Age is not on the real property list.

Question 24

A home sells for $425,000 and the buyer takes no existing liens. What is the state deed tax?

Accepted Answer

425,000 x 0.0033 = $1,402.50. Using the mortgage registry rate (425,000 x 0.0023 = $977.50) is the tempting error.

Question 25

For a contract for deed executed on or after August 1, 2024, what attorney fee may a defaulting buyer be required to pay to cure under §559.21, subd. 2a?

Accepted Answer

The 2024 amendment set the attorney fee at $1,000 for contracts executed on or after August 1, 2024; older contracts use the $250/$500 or $125/$250 tiers.

Minnesota real estate property practice test

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

2. A borrower facing default voluntarily conveys the property to the lender in exchange for release of the debt. This is a:

3. A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

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

5. A seller knows of no wells on the property. How can the seller avoid filing a well disclosure certificate at closing?

6. The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

7. In a life estate, the person who receives the property when the life tenant dies is the:

8. Which deed provides the GREATEST protection to the grantee?

9. A lender's title insurance policy protects:

10. A neighbor's new garage extends two feet over the property line. This is an:

11. The Minnesota Common Interest Ownership Act (ch. 515B) generally governs common interest communities created:

12. Annual property taxes are $5,110. The seller has paid nothing, and closing is on April 30 (the seller owns the day of closing; use a 365-day year, non-leap). What does the seller owe the buyer for taxes at closing?

13. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

14. In a general warranty deed, the grantor's promise that he owns the property and has the right to convey it is the covenant of:

15. In a mortgage, the borrower who pledges the property as security is the:

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

17. The periodic report a property manager gives the owner showing rents and other income collected and expenses paid for the period is the:

18. Adverse possession allows someone to acquire title by:

19. Before placing a for-sale sign on an owner's property, a Minnesota licensee must have:

20. A property sells for $300,000. The buyer assumes the seller's existing $120,000 mortgage, which remains on the property. What is the state deed tax?

21. A salesperson is charged with a felony unrelated to real estate. What must the salesperson do?

22. When must a Minnesota seller of residential property provide the written seller's disclosure?

23. Which is NOT a protected class in real property transactions under §363A.09?

24. A home sells for $425,000 and the buyer takes no existing liens. What is the state deed tax?

25. For a contract for deed executed on or after August 1, 2024, what attorney fee may a defaulting buyer be required to pay to cure under §559.21, subd. 2a?

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