California Real Estate Practice Exam

A salesperson purchased a property listed through his broker's office. Later the sellers complained to the Commissioner that the salesperson had neglected to inform them he was a licensee. Which of the following is correct?

1. No violation of real estate law

2. Salesperson and broker are both subject to disciplinary action

3. Salesperson is not responsible, just the broker

4. Seller should have guessed that the buyer was licensed, due to his knowledge

The correct answer is: No violation of real estate law

The situation illustrates an important principle in real estate transactions regarding disclosure and the responsibilities of licensees. The correct answer indicates that there was no violation of real estate law in this case. According to California law, a salesperson, even if licensed, is not required to disclose their licensee status when purchasing property for their own account if they are acting as a buyer. The law does not impose a blanket obligation on all buyers to disclose their licensing status unless they are acting on behalf of another party. In this scenario, the salesperson was engaging in a personal transaction, and the requirement for disclosure may not extend to such circumstances. Therefore, there is no violation of real estate law, as the salesperson acted within the legal boundaries established for licensees when purchasing property for themselves, which is distinct from representing actual clients. The other options do not accurately reflect the nuances of the situation. If the salesperson was acting on behalf of a client or in a different capacity, the expectations around disclosure would certainly differ. Overall, the absence of a violation rests upon the nature of the transaction and the obligations imposed on licensed real estate professionals when purchasing real estate for personal purposes.