Free Practice Questions for Real Estate Maryland-Real-Estate-Salesperson Exam

A tax-deferred exchange, also known as a 1031 exchange, allows investors to exchange one qualifying investment or business property for another “like-kind” property and defer payment of capital gains taxes until the new property is sold.

This provision falls under Internal Revenue Code §1031.

In the Maryland pre-licensing curriculum, this is explained under the “Real Estate Financing and Investment” section to show how investors legally postpone capital gains recognition by following IRS guidelines.

In real estate terminology taught in the course:

Land = the earth’s surface down to the center and upward to infinity, including permanently attached natural objects (trees, minerals, water).

Real estate = land plus improvements (man-made attachments such as buildings, fences).

In Maryland, agency exists when a licensee represents a client under a brokerage agreement. If the seller has a written listing agreement with a broker, the seller is the client.

An unrepresented buyer is considered a customer, not a client. The licensee owes customers limited duties—honesty, fair dealing, and disclosure of material facts—but does not owe fiduciary duties such as loyalty, confidentiality, or obedience.

Therefore, in this case, the seller is the only client.

Maryland licensees may use pre-approved or attorney-drafted forms in the course of their duties.

However, they may not draft legal documents or interpret legal implications, as doing so constitutes unauthorized practice of law.

The Maryland Real Estate Commission (MREC) allows licensees to fill in the blanks of standard forms approved by the Maryland Association of REALTORS® (MAR) or by legal counsel, but all legal interpretations must be referred to an attorney.

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.

The metes and bounds system is the oldest method of land description used in the United States and is based on physical landmarks, measurements, and compass directions.

It begins at a defined point of beginning (POB) and traces the boundaries using distances (metes) and directions or angles (bounds), returning to the starting point.

In contrast:

Lot and block (option C) refers to recorded plats.

Rectangular survey (option D) uses township and range.

Street addresses (option A) are not legal descriptions.Maryland still recognizes metes and bounds for rural or irregular parcels.

A life tenant holds possession for the duration of a measured life but must maintain the property and preserve its value for the remainderman or reversionary owner.

When the life tenant damages, neglects, or depletes the property, that conduct is termed an act of waste.

The future interest holder may take legal action to stop such waste.

The concept appears under “Interests in Real Estate” when describing life estates and their limitations.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices of Real Estate Pre-Licensing Course, Estates in Land chapter.

– Maryland Real Property Article §14-101 et seq.

Downzoning occurs when a local government changes zoning classifications to reduce the density or intensity of land use, such as rezoning an area from multifamily to single-family residential.

It can limit development potential and may lower market value but is typically done to control growth, preserve open space, or maintain community character.

The Maryland course explains downzoning under local land-use authority topics governed by county and municipal zoning ordinances.

Maryland’s Property Condition Disclosure Law requires residential sellers to deliver the Maryland Residential Property Disclosure and Disclaimer Statement to a prospective purchaser on or before the time the buyer enters into a contract of sale. This timing ensures the buyer receives statutory condition information before becoming contractually bound, and failure to provide it timely can trigger buyer rights to rescind.

Maryland law prohibits self-help eviction, which occurs when a landlord takes direct action—such as locking out a tenant or removing their belongings—without a court order.

Only a sheriff or court-appointed officer may evict a tenant following a court judgment for possession.

A landlord who locks out a tenant to recover rent is acting illegally, even if rent is overdue.

This topic is addressed in the Leasing and Property Management module of the pre-licensing course.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Landlord-Tenant Law section.

– Real Property Article §8-216 – Prohibited Acts of Landlord (Self-Help Eviction).