Free Real Estate Maryland-Real-Estate-Salesperson Practice Exam with Questions & Answers | Set: 5

Under Maryland license law and the Maryland Code of Ethics (COMAR 09.11.02.33), licensees are expected to cooperate with other licensees when doing so serves their client’s best interest. Cooperation often involves sharing information or coordinating showings, but does not require compensation unless there is a written agreement specifying how commissions will be shared. The client’s interest always takes priority over cooperative obligations.

The Civil Rights Act of 1866 was the first federal law to address discrimination in housing and property rights. It declares that all U.S. citizens shall have the same rights as white citizens to inherit, purchase, lease, sell, hold, and convey real and personal property, regardless of race or color.

Unlike later fair housing laws, this Act includes no exemptions—it applies to all property transactions, public or private.

This law is a foundation of modern fair housing legislation, and its absolute prohibition on racial discrimination still applies today.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Fair Housing and Ethics section.

– Civil Rights Act of 1866, 42 U.S.C. §1982.

Agency may be created expressly (by written or oral agreement) or by implication through the conduct of the parties. When a licensee and consumer act as though an agency relationship exists—advice, advocacy, and services consistent with representation—without a signed agreement, this is implied agency. Maryland emphasizes avoiding unintended implied agency by using timely written agreements and required disclosures.

Price fixing occurs when competing firms agree to set prices, fees, or commission rates rather than allowing them to be independently determined. In real estate, this includes agreements among brokers to set commission rates or fee structures—an antitrust violation. Market allocation divides territories or clients, group boycotts are concerted refusals to deal, and tie-in arrangements force the purchase of a second product/service as a condition of sale.

Under Maryland law, agency relationships are determined by who the licensee represents, not by who pays the compensation.

Even though the buyer’s agent may receive payment from the listing broker via a cooperative compensation (often shared through the MLS), that payment does not make the buyer’s agent an agent of the seller.

The licensee’s fiduciary duties—loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting—belong solely to the buyer, the client under the brokerage agreement.

This principle is detailed under the Maryland Agency Law section of the pre-licensing course.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Law of Agency module.

– Business Occupations and Professions Article §17-530 through §17-534.

– COMAR 09.11.07.01 – Disclosure of Agency Relationships.

In Maryland-specific coverage within “Leases and Property Management,” the course explains ground leases and the unique Maryland concept of ground rents. A redeemable ground rent permits the leasehold owner (tenant) to redeem—that is, buy out—the ground rent interest by paying a statutory redemption amount, thereby merging the leasehold and reversionary interests and effectively ending the ground rent. This contrasts with irreedeemable/irretrievable arrangements (not permitted for new creations under current Maryland law) where no buyout right exists.

References (Course Outline/Study Topics): Maryland 60-Hour Principles and Practices of Real Estate — “Leases and Property Management” (Ground leases and Maryland ground rents; redeemable ground rent concept and tenant redemption).

A lot-and-block legal description identifies land within a recorded subdivision plat, referencing a specific lot number, block number, map book, and page filed with the county recorder. It’s the most common method for urban and suburban properties in Maryland.

Choices B and D represent metes-and-bounds and rectangular survey systems, respectively; A is simply a street address.

Maryland recognizes dual agency within a brokerage when the brokerage represents both sides of a transaction. With the informed written consent of both parties, the broker (or branch manager) serves as the dual agent, and the broker may appoint separate associated licensees to represent each party; those appointees are called intra-company agents. Each intra-company agent owes undivided fiduciary duties to their respective client, while the broker maintains neutrality as the dual agent. This structure is specific to Maryland’s agency framework.

Underground storage tanks (USTs), particularly older ones made of steel, may corrode and leak, releasing hazardous substances such as oil or fuel into the soil and groundwater.

Maryland environmental law and the 60-Hour Course emphasize that sellers must disclose known environmental hazards, and buyers should be aware of potential remediation costs.

The Maryland Department of the Environment (MDE) regulates USTs, requiring proper registration, maintenance, and closure procedures to prevent contamination.

Maryland practice (as taught in pre-licensing) recognizes a customary 50/50 split of transfer and recordation taxes between buyer and seller, subject to local custom and negotiation. Parties may allocate differently in the contract, and some jurisdictions have varying defaults; however, exam-prep materials present 50/50 as the standard custom unless otherwise agreed.