California Real Estate Practice Exam

The correct answer indicates that any out-of-state subdivision offered for sale in California is not deemed a real property security under California law. This understanding stems from the definition of real property securities, which typically apply to transactions involving real estate where the security interest is tied directly to the property itself.

In this context, subdivisions located outside of California, while they may be marketed to California residents, do not fall within the framework of California real estate laws that pertain to security interests in actual, in-state real properties. Therefore, they are not subject to the same regulations and requirements that govern real property securities within California, distinguishing them from other types of securities tied directly to California properties or transactions.

In contrast, other answer choices include transactions and instruments that involve real property and are, therefore, classified as securities. When real estate is included as security for a loan, or when sales contracts or promotional notes are secured by property, these fall under the definition and regulatory oversight of real property securities in California. This delineation helps protect consumers and investors by ensuring transparency and legal compliance for securities that involve real estate interests.