A Kentucky sales associate refuses to show a rental property to a prospective tenant because of the tenant's national origin. This conduct violates:
A. No law, since housing providers may choose tenants freely
B. Only a local zoning ordinance, not any state or federal law
C. The federal Fair Housing Act's prohibition on discrimination based on national origin
D. Kentucky's real estate license law, but no federal law
Show answer and reasoning
Correct answer: C. The federal Fair Housing Act's prohibition on discrimination based on national origin
Correct. The federal Fair Housing Act prohibits discrimination in housing transactions based on race, color, national origin, religion, sex, familial status, and disability, and licensees must comply with it in addition to state license law.
- A: Wrong. Housing providers and their agents are not free to discriminate on the basis of protected classes; that is precisely what fair housing law prohibits.
- B: Wrong. This is a substantive civil rights violation under federal law, not merely a local zoning matter.
- D: Wrong. National origin discrimination in housing violates federal fair housing law directly; it is not limited to a state licensing infraction alone.
Source: 42 U.S.C. § 3601 et seq. (federal Fair Housing Act)
In Kentucky, a real estate sales contract for the purchase of real property must generally be:
A. Oral, since written contracts are unnecessary
B. Filed with KREC before it takes effect
C. Notarized by a judge before it is binding
D. In writing to be enforceable, consistent with the statute of frauds
Show answer and reasoning
Correct answer: D. In writing to be enforceable, consistent with the statute of frauds
Correct. Consistent with the statute of frauds applicable to real estate transactions, a contract for the sale of real property in Kentucky must be in writing and signed by the parties to be enforceable.
- A: Wrong. Contracts for the sale of real property fall under the statute of frauds and generally must be in writing to be enforceable; an oral agreement alone is not sufficient.
- B: Wrong. Purchase contracts are private agreements between the parties and are not filed with or approved by KREC to take effect.
- C: Wrong. Judicial notarization is not a requirement for a valid real estate purchase contract; notarization by a notary public is sometimes used for certain recorded documents like deeds, not the underlying purchase contract itself.
Source: KRS 324.010
Kentucky license law authorizes KREC to take disciplinary action against a licensee, up to and including license revocation, for conduct such as:
A. Fraud or misrepresentation in a real estate transaction
B. Taking a scheduled continuing education course early
C. Referring a client to a mortgage lender
D. Advertising an open house on a weekend
Show answer and reasoning
Correct answer: A. Fraud or misrepresentation in a real estate transaction
Correct. KRS 324.281 authorizes the Commission to discipline licensees, including suspension or revocation, for grounds such as fraud, misrepresentation, or other prohibited conduct in the course of real estate practice.
- B: Wrong. Completing continuing education ahead of schedule is compliant behavior, not misconduct subject to discipline.
- C: Wrong. Referring a client to a lender is a routine, permissible practice as long as any compensation arrangements comply with applicable disclosure and referral-fee rules.
- D: Wrong. Advertising a routine open house is standard, lawful marketing activity, not grounds for discipline.
Source: KRS 324.281
The Kentucky Seller's Disclosure of Property Condition form, KREC Form 402, is designed to elicit information from the seller about the condition of which of the following?
A. The seller's personal financial history
B. Major systems and components such as roof, foundation, plumbing, electrical, and HVAC
C. The buyer's creditworthiness
D. The listing agent's commission structure
Show answer and reasoning
Correct answer: B. Major systems and components such as roof, foundation, plumbing, electrical, and HVAC
Correct. KREC Form 402 covers the condition of major property systems and components, including the roof, foundation, plumbing, electrical, HVAC, water and sewer systems, and known environmental hazards.
- A: Wrong. The form addresses the physical condition of the property, not the seller's personal finances.
- C: Wrong. Buyer creditworthiness is assessed during mortgage underwriting, not disclosed by the seller on the property condition form.
- D: Wrong. Commission structure is a separate brokerage compensation matter addressed in listing agreements, not the property condition disclosure form.
Source: KREC Form 402, Seller's Disclosure of Property Condition
Before an individual can legally perform acts of real estate brokerage as a sales associate in Kentucky, in addition to passing the exam, they must:
A. Register as a limited liability company
B. Open their own independent brokerage
C. Be licensed and affiliated with a Kentucky-licensed principal broker
D. Complete a separate appraiser license
Show answer and reasoning
Correct answer: C. Be licensed and affiliated with a Kentucky-licensed principal broker
Correct. KRS 324.046 requires a sales associate to hold an active license and be affiliated with, and supervised by, a Kentucky-licensed principal broker to lawfully perform brokerage acts.
- A: Wrong. LLC formation is a business-entity choice some brokers make for their firm, not a personal prerequisite for an individual sales associate's license activation.
- B: Wrong. Only a principal broker, not a newly licensed sales associate, may operate an independent brokerage; sales associates must work under a principal broker.
- D: Wrong. Real estate appraisal is a separate, distinctly licensed profession under different statutory requirements and is not a prerequisite for sales associate practice.
Source: KRS 324.046
