Mello-Roos special-tax district status must be disclosed to buyers.
Before you read
Test yourself first: 5 questions
Question 1 of 5
If a California buyer receives the TDS after signing the purchase agreement (delivered late), the buyer generally has the right to:
Answer: D. When the required disclosures are delivered after the buyer has signed the purchase agreement, the buyer has a statutory right to terminate within a short period after delivery (commonly 3 days if delivered in person and 5 days if delivered by mail).
Question 2 of 5
A fact that California courts and the DRE recognize as a material fact requiring disclosure to a buyer would most likely include:
Answer: D. A known chronic flooding or drainage problem affects value and desirability and is not readily observable, so it is a material fact that must be disclosed. The seller's motivation for moving and similar non-defect facts are generally not required property-condition disclosures.
Question 3 of 5
A broker who receives a buyer's deposit check and is not instructed otherwise must place trust funds into a neutral escrow, the principal's hands, or a trust account within how many days?
Answer: B. California law generally requires a broker to place trust funds into a neutral escrow depository, into the hands of the broker's principal, or into a trust account within three business days following receipt.
Question 4 of 5
A broker who collects a buyer's earnest-money deposit must place those trust funds into a trust account, neutral escrow, or the principal's hands no later than:
Answer: B. Under California trust-fund rules, a broker must deposit trust funds into a trust account, a neutral escrow depository, or into the hands of the principal no later than three business days following receipt. Improper handling of trust funds is a frequent basis for discipline.
Question 5 of 5
Generally, a California broker who accepts trust funds on behalf of a principal must deposit them into a trust account, into escrow, or into the hands of the owner no later than:
Answer: B. DRE regulations require that trust funds received by a broker be deposited into a neutral escrow depository, into a trust fund account, or into the hands of the principal (or as the principal directs) no later than three business days following receipt.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Transfer Disclosure Statement (TDS): seller's required condition disclosure.
- Natural Hazard Disclosure (NHD): flood, fire, seismic and related hazard zones.
- CC 2079 visual inspection duty supports the agent's portion of the TDS.
- Trust funds: deposit into escrow, trust account, or to principal within 3 business days.
- Documentary transfer tax: $0.55 per $500 of value transferred.
- Mello-Roos special-tax district status must be disclosed to buyers.
California Required Disclosures & Escrow/Trust Timeframes Quick Sheet: FAQs
Is California Required Disclosures & Escrow/Trust Timeframes Quick Sheet on the real estate exam?
Yes. State License Law is a scored domain on the California real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does California test this differently?
California applies its own license law on top of the national portion. This page covers the California rules specifically, which is what the state section of your exam tests.
