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PSI PA STATE REAL ESTATE PRACTICE EXAM 2025- PENNSYLVANIA
WITH 100% CORRECT ANSWERS
"The governing body of a municipality is responsible for enacting the comprehensive plan, zoning, and subdivision ordinances in accordance with procedures in the Pennsylvania Municipalities Planning Code. They may appoint a planning commission to be responsible for formulating the recommended plans and ordinances. Public hearings must be held prior to their enactment by
the governing body. - CORRECT ANSWER Zoning"
"Charges permitted by the Pennsylvania Municipalities Planning Code to help defray the cost of
streets to keep up with development - CORRECT ANSWER Impact Fees"
"Went into effect in July 2004, as prescribed by the Pennsylvania Construction Code Act that was passed in 1999. *In addition to satisfying the purpose of construction codes, the act encourages the use of state-of-the-art construction methods and systems and eliminates existing codes that
are obsolete, overly restrictive, or conflicting. - CORRECT ANSWER Uniform Construction
Code (UCC)" "Passed by the Department of Environmental Protection *Gives notice to prospective buyers that if a property is not serviced by a public sewage system and no community sewage system is
available, a permit for an individual system must be obtained - CORRECT ANSWER
Pennsylvania Sewage Facilities Act in 1994" "Created when the person claiming the easement has made use of another's land for 21 years in PA. The claimant's use must have been continuous, exclusive, and without the owner's approval. Through the principle of tacking (discussed in Unit 5), successive periods of adverse possession by different adverse possessors can be combined so that a person who is not in possession for the entire statutory time may establish a claim.The use must be visible, open, and notorious, that is, the owner must have been able to learn of it. The claimant is entitled to assert a right to use the property and cannot claim ownership. Prescriptive easements cannot usually be acquired on
public land. - CORRECT ANSWER Easement by Prescription"
"True or False The statute of frauds in Pennsylvania requires contracts for more than two years
duration to be in writing. - CORRECT ANSWER False, contracts for more than three years
duration are required to be in writing. However a written agreement can be used for any period of time."
"The theory of this warranty is that the lessor who leases residential premises warrants that the premises shall be fit for habitation. If the tenant proves that the premises are not fit for
habitation, the court can order a reduction or cessation of rental payment. - CORRECT
ANSWER Warranty of habitability"
"Under common law, a partnership is not a legal entity and technically cannot own real estate. Individual partners must hold title as tenants in common or joint tenants. However, in states that have adopted the Uniform Partnership Act, including Pennsylvania, a partnership is recognized as a legal entity and can hold title in the partnership's name. Similarly, under the Uniform Limited Partnership Act, a limited partnership is recognized as a legal entity that can hold title to property in the limited partnership's name. Profits and losses are passed through the partnership to each
partner, whose individual tax situation determines the tax consequences - CORRECT ANSWER
Partnerships"
"Elements of a deed legal description of real estate - CORRECT ANSWER A valid deed must
contain an accurate description of the real estate conveyed. Land is considered adequately described if a competent surveyor can locate the property using the description. In Pennsylvania, a metes-and-bounds and/or a lot-and-block description would be used." "Evidence that title is, in fact, marketable. Customarily, in Pennsylvania, a certificate of title or
title insurance is used as proof of ownership - CORRECT ANSWER Proof of Ownership"
"Mortgage bankers and mortgage brokers must be licensed and conduct business in accordance
with the Mortgage Bankers and Brokers Act - CORRECT ANSWER The Department of Banking
issues these licenses and governs the licensees' activities, with the State Real Estate Commission also having certain limited authority when these individuals are licensed real estate brokers and salespersons as well." "A borrower may cure the default of a residential mortgage loan with an outstanding balance of $50,000 or less by merely bringing the payments up to date. If some person other than the mortgagor redeems the real estate, the borrower becomes responsible to that person for the
amount of the - CORRECT ANSWER Redemption"
"A Broker MUST - CORRECT ANSWER be at least 21 years of age.
be a high school graduate or equivalent. have completed 240 hours (16 credits) of real estate instruction as prescribed by the Commission within ten years of the date of passing both portions of the licensing examination; instruction required for the salesperson license does not qualify for broker licensure.
"Limits on Security Deposits - CORRECT ANSWER 1st Year-the maximum amount of the
security deposit cannot exceed a sum equivalent to two months' rent 2nd Year-the amount drops to a sum equivalent to one month's rent During years 2-5-the landlord may increase the amount of security deposit, following the same monthly equivalency formula, to keep pace with increasing rents After 5 years- the landlord cannot increase the amount of security deposit." "Pennsylvania law permits a landlord to purchase a guarantee, or surety, bond to guarantee the return of a security deposit to the tenant. The landlord may exercise this option in lieu of escrowing a security deposit in a financial institution. The landlord must return the amount of the bond (including any interest) less the cost of any necessary repairs to the tenant at the end of the
lease term. - CORRECT ANSWER Bond in lieu of escrowing"
"Tenants in certain situations must be given an explanation of rights informing them of the
consequence of confession of judgment when they sign a lease that contains this clause. -
CORRECT ANSWER Confession of Judgement"
"In Pennsylvania, only a memorandum of lease is filed. A memorandum of lease gives notice of the interest but does not disclose the terms of the lease to the public. Only the names of the
parties and a description of the property are included. - CORRECT ANSWER Recording a lease"
"Contains remedies for landlords if a lease is in default and rules of civil procedures for district
justices in these cases - CORRECT ANSWER Landlord and Tenant Act of 1951"
"Prohibits unfair practices in the conduct of commerce, also provides remedies for tenants of
residential property. - CORRECT ANSWER Pennsylvania Consumer Protection Law"
"Race, color, religion, national origin, sex, age (40 years old or older), handicap, use of guide or support animals due to a handicap or disability, or familial status, are all protected under what
Act? - CORRECT ANSWER All persons must have access to housing of their choice under the
Pennsylvania Human Relations Act"
"Legal forms of ownership in PA - CORRECT ANSWER In Severality or concurrently as Joint
Tenents or Tenents in Common, if married as Tenants in the Entireties. In addition, corporations and partnerships can hold title, and title can be held in trust" "When two or more new owners acquire title to a parcel of real estate and the deed does not stipulate the tenancy, they acquire title, by operation or rule of law, as tenants in common. But if
the conveyance is made to a husband and wife with no further explanation, in Pennsylvania a
tenancy by the entirety is created - CORRECT ANSWER Co-Ownership"
"A special form of joint tenancy between husband and wife that is recognized in Pennsylvania.
Each spouse has an equal, undivided interest in the property. - CORRECT ANSWER Tenancy by
the Entirety" "For Pennsylvania taxes, however, an LLC is treated as a corporation but may be considered an S
corporation if it meets the requirements for this type of an organization. - CORRECT ANSWER
Limited Liability Companies" "The state law adopted from the national model act that governs the development and operation of condominiums. The law also provides for certain disclosures to purchasers of condominium
units - CORRECT ANSWER Pennsylvania Uniform Condominium Act"
"Must be given to prospects at least 15 days before a sales contract is signed. Must detail 22 caterogies of info. i.e, bylaws, R&R, projected budgets, leins or encumbrences on the bldg, etc. If a purchaser is not provided the statement within the prescribed timeframe they may cancel the contract within 15 days of receipt w/out penalty & recover an amount of 5% of the units price up
to $2000 or actual damages whichever is greater - CORRECT ANSWER Public Offering
Statement" "The Pennsylvania Real Estate Licensing and Registration Act, requires licensure for a time-share
salesperson and a campground membership salesperson - CORRECT ANSWER Time-Share
Interests" "Pennsylvania law requires counties and municipal governments to adopt budgets and set tax rates on a January-to-December calendar year. Most school districts in Pennsylvania, however,
are required to prepare budgets and set tax rates on a fiscal year that begins July 1 - CORRECT
ANSWER Tax Bills"
"A contractor or subcontractor can file a claim with the court of common pleas in the county in which the property is located. This must be done within six months after the work is completed. If the claim is successful, the mechanic's lien takes priority as of the date on which the first "visible construction" begins when an improvement is erected or constructed or as of the date the claim is filed when an existing improvement is altered or repaired. A claimant must take steps to enforce the lien within two years of the date the claim is filed. Enforcement is a court action to
"The Pennsylvania State Real Estate Commission's Rules and Regulations require that a real estate broker representing a party to a transaction must ensure that all contracts are in writing.
CORRECT ANSWER Statute of Frauds"
"State law limits the time within which parties to a contract may bring legal suit to enforce their rights. In Pennsylvania, it is four years from the date the contract is breached. Any rights that are
not enforced within the applicable time period are lost. - CORRECT ANSWER Statute of
Limitations"
"Penalty for providing legal advice unless properly licensed to do so - CORRECT ANSWER Up to
one-year imprisonment and a $2,500 fine. Also, the State Real Estate Commission can take disciplinary action against licensees who provide legal advice, resulting in a fine, or the suspension or revocation of a license. Finally, a party who is injured by the advice can file a lawsuit, which can result in an award of monetary damages against the individual who provided that advice."
"Plain Language Consumer Contract Act in Pennsylvania - CORRECT ANSWER Intends to
protect consumers from making contracts they do not understand by promoting the use of plain language. Agreements that must be written in plain language include contracts in which a consumer -borrows money; buys, leases, or rents personal property or real property; and -engages services for cash or on credit for personal, family, or household purposes. Any creditor, lessor, or seller who does not comply with the tests of readability (as defined by the law) is liable to the consumer for any loss caused by the violation, statutory damages of up to $100, court costs, and attorney fees" "Give legal effect to agreements bargained for electronically, as long as they meet all other
provisions of contract law. - CORRECT ANSWER Electronic Transaction Act enacted in January
"Intermediary theory - CORRECT ANSWER A hybrid philosophy that is based on the principles
of title theory but, like the principles of lien theory, requires that the mortgagee foreclose to obtain legal title."
"Prepayment - CORRECT ANSWER Lenders are not permitted to charge prepayment penalties
on mortgage loans insured or guaranteed by the federal government. In addition, Pennsylvania law does not permit prepayment penalties on residential mortgage loans when the principal
amount is $50,000 or less. Otherwise, lenders can include in the note whatever penalty conditions they choose" "This program was created during the early 1980s when workers faced the loss of their homes after losing their jobs in the demise of the steel industry. The program provides counseling and loans to help people pay delinquent mortgage loans. In some cases, people may qualify for
continuing monthly payment assistance for up to 24 months - CORRECT ANSWER Homeowner
Emergency Assistance Program (HEMAP)." "If it appears from evidence at a hearing that the employing broker had actual knowledge of a violation or permitted a course of dealing that violates the law, the Commission may suspend or
revoke the employing broker's license or levy a fine. - CORRECT ANSWER Discipline against a
broker" "This allows the property to be sold by court order after the mortgagee has given sufficient public
notice. This is the prevalent type of mortgage foreclosure in Pennsylvania. - CORRECT
ANSWER Judicial foreclosure"
"What is the major disadvantage of the deed in lieu of foreclosure? - CORRECT ANSWER The
mortgagee takes the real estate subject to all junior liens." "Established 2/19/1980, The Pennsylvania law that protects the public interest by governing real
estate practices and the activities of licensees. - CORRECT ANSWER Real Estate Licensing and
Registration" "The agency established by the Pennsylvania Real Estate Licensing and Registration Act to
administer this law and supervise the activities of licensees. - CORRECT ANSWER State Real
Estate Commission" "The five commissioners licensed as brokers shall have been engaged in the real estate business
for at least ___ years - CORRECT ANSWER 10"
"The Commission conducts regularly scheduled business meetings that, under the state _______
are open to the public. - CORRECT ANSWER "sunshine laws""
"The Commission is also required to hold _________ to solicit suggestions, comments, and objections about real estate practices from members of the public. These meetings are held each
year in Philadelphia, Harrisburg, and Pittsburgh - CORRECT ANSWER public meetings"
"A Builder-Owner Salesperson is - CORRECT ANSWER an individual who is a full-time
employee of a builder-owner of single-family and multifamily dwellings and who performs one or more of the following activities: -Lists for sale, sells, or offers for sale real estate of the builder-owner -Negotiates the sale or exchange of real estate of the builder-owner -Leases or rents real estate of the builder-owner -Collects or offers or attempts to collect rent for the real estate of the builder-owner"
"A builder-owner salesperson MUST - CORRECT ANSWER be at least 18 years of age, -be
employed by the builder-owner (who is not licensed), -complete a written examination prior to licensure. -There is no education requirement"
"Rental listing referral agent is - CORRECT ANSWER A licensee who owns or manages a
business that collects rental information for the purpose of referring tenants to rental units or locations. The applicant must satisfy licensing requirements that are essentially the same as for a salesperson licensee; however, the rental listing referral agent is not affiliated with a broker."
"Campground membership salesperson is - CORRECT ANSWER A licensee who, either as an
employee or independent contractor, sells campground memberships under the supervision of a broker. The applicant must be at least 18 years of age, complete 15 hours of instruction in specific topics, and complete not less than 30 days of on-site training at a campground membership facility prior to licensure. The broker is responsible for further training and supervising the licensee. Licensed salespersons, brokers, and time-share salespersons do not need a separate license to sell campground memberships."
"Time-share salesperson is - CORRECT ANSWER A licensee who, either as an employee or
independent contractor, sells time-shares under the supervision of a broker. A time-share salesperson must be at least 18 years of age, complete 30 hours of instruction in specific topics, and complete not less than 30 days of on-site training at a time-share facility prior to licensure. The broker is responsible for further training and supervising the licensee. Licensed salespersons and brokers do not need a separate license to sell time-shares."
"Penalties for unlicensed activity - CORRECT ANSWER The first conviction for unlicensed
activity is a summary offense and involves payment of a fine not to exceed $500 and/or imprisonment not to exceed three months. A second or subsequent offense is a felony of the third degree and involves payment of a fine between $2,000 to $5,000 and/or imprisonment for one to two years."
"Licensing procedures - CORRECT ANSWER The license period for all real estate licenses
currently begins June 1 and ends the last day of May in each even-numbered year (a two-year
license period). When a license is first issued, it expires on the last day of May of the current license period. A license is considered active once the license is issued and remains properly renewed."
"Continuing Education requires - CORRECT ANSWER Licensed brokers and salespersons are
required to satisfy a 14-hour continuing education requirement during each two-year period in order to renew the license. Licensees are required to keep documentation of approved coursework they have completed during the license period to satisfy the renewal requirement. The licensee may, however, be requested to provide documentation as evidence of completion of the continuing education requirement as part of a post-renewal audit program instituted with the 2008 renewal period"
"A license become inactive when - CORRECT ANSWER an individual voluntarily relinquishes a
license, sometimes referred to as putting a license in "escrow," or when an individual fails to properly renew a license."
"A license may be reactived by - CORRECT ANSWER submitting the proper forms and required
fees within five years of the date the license became inactive. Brokers and salespersons must obtain 14 hours of continuing education before they can reactivate a license. An individual who does not reactivate a license within five years must retake the appropriate examination in order to be issued a license." "If a broker or cemetery broker intends to maintain more than one place of business, the licensee
must obtain an additional license for each office location before any office is opened - CORRECT
ANSWER Branch Offices"
"Change of address; change of employment - CORRECT ANSWER If a broker's office is
removed from the location designated in the license, all licensees working at that location shall make application to the commission designating the new location of the office. This application must be filed before the removal or within ten days thereafter When a licensee changes employment from one broker to another, the licensee shall notify the commission no later than ten days after the intended date of change, return the current license, and pay the required fee. The applicant is responsible for notifying the commission if the new license is not received within 30 days."
"Disciplinary Actions - CORRECT ANSWER When a complaint alleging a violation of the Act
and/or the Regulations is received, the Bureau of Professional and Occupational Affairs conducts an investigation to determine if a violation has occurred. After the accused is given the
"Document Procedures - CORRECT ANSWER When no transaction results from a brokerage
relationship, the signed acknowledgment portion of the Consumer Notice that was provided must be retained for six months"
"Deadlines for deposits - CORRECT ANSWER A broker is responsible for depositing the funds in
escrow by the end of the next business day following receipt. In the case of multiple office firms, the deadline applies to receipt by the office out of which the account is administered. If the money has been tendered in the form of a check when an offer to purchase or lease is made, the broker may, with written permission from both the buyer and the seller, refrain from depositing the money pending acceptance of the offer. In this case, the broker must deposit the funds within one business day following acceptance of the offer."
"Conflict of Interest - CORRECT ANSWER It also says that a broker who manages rental
property may not accept commission, rebate, or profit on expenditures made for the lessor without the owner's written consent"
"Advertisement of lotteries, contests, prizes, certificates, lots, and gifts - CORRECT ANSWER
advertisements for the solicitation or sale of real estate that employ lotteries or contests or that offer prizes, certificates, gifts, or free lots shall contain -a description of each prize, certificate, gift, or lot offered; -the prerequisites for receiving the awards; -the limitation on the number of awards; -the fair market value (not suggested retail value) of each award; and -the odds of winning or receiving the award. The Commission requires that disclosures be made if there is a possibility that a particular award is not available and prohibits advertising an award that is not available for distribution. The description of an award cannot be misleading, and a statement of value and odds shall be printed in a clear and conspicuous manner. If the prizewinner must pay any fees, such as dealer preparation, shipping, handling, or insurance, these must be disclosed."
"Advertising sales volume, market position, and number of offices - CORRECT ANSWER
advertising by a broker about "sales volume" or "production" shall refer only to closed transactions An advertisement by a broker about production or position in the "market" shall identify the municipality that the market comprises. An advertisement about the number of offices that the broker operates shall refer only to offices that have been issued branch office licenses."
"Promotional land sales - CORRECT ANSWER any person who proposes to engage in real
estate transactions of a promotional nature in PA, regardless of whether the property is located
within or outside PA, shall first register with the Commission. "Promotional real estate" is an interest in property that is part of a promotional plan that offers real estate through advertising by mail, newspaper, or periodical, or by radio, television, telephone, or other electronic means. Promotional real estate does not involve fewer than 50 lots or shares or land areas of less than 25 acres. The registration is not required if the promotional property is already registered with the Department of Housing and Urban Development under the Interstate Land Sales Full Disclosure Act." "The governing body of a municipality is responsible for enacting the comprehensive plan, zoning, and subdivision ordinances in accordance with procedures in the Pennsylvania Municipalities Planning Code. They may appoint a planning commission to be responsible for formulating the recommended plans and ordinances. Public hearings must be held prior to their enactment by
the governing body. - CORRECT ANSWER Zoning"
"Charges permitted by the Pennsylvania Municipalities Planning Code to help defray the cost of
streets to keep up with development - CORRECT ANSWER Impact Fees"
"Went into effect in July 2004, as prescribed by the Pennsylvania Construction Code Act that was passed in 1999. *In addition to satisfying the purpose of construction codes, the act encourages the use of state-of-the-art construction methods and systems and eliminates existing codes that
are obsolete, overly restrictive, or conflicting. - CORRECT ANSWER Uniform Construction
Code (UCC)" "Passed by the Department of Environmental Protection *Gives notice to prospective buyers that if a property is not serviced by a public sewage system and no community sewage system is
available, a permit for an individual system must be obtained - CORRECT ANSWER
Pennsylvania Sewage Facilities Act in 1994" "Created when the person claiming the easement has made use of another's land for 21 years in PA. The claimant's use must have been continuous, exclusive, and without the owner's approval. Through the principle of tacking (discussed in Unit 5), successive periods of adverse possession by different adverse possessors can be combined so that a person who is not in possession for the entire statutory time may establish a claim.The use must be visible, open, and notorious, that is, the owner must have been able to learn of it. The claimant is entitled to assert a right to use the property and cannot claim ownership. Prescriptive easements cannot usually be acquired on
public land. - CORRECT ANSWER Easement by Prescription"
"True or False The statute of frauds in Pennsylvania requires contracts for more than two years
duration to be in writing. - CORRECT ANSWER False, contracts for more than three years
have completed 240 hours (16 credits) of real estate instruction as prescribed by the Commission within ten years of the date of passing both portions of the licensing examination; instruction required for the salesperson license does not qualify for broker licensure. have been engaged as a licensed real estate salesperson for at least three years or have experience and/or education that the Commission considers equivalent. pass both portions of a written examination within three years of the date of the license application."
