Disciplinary actions can include license denial, suspension, or revocation.
Before you read
Test yourself first: 5 questions
Question 1 of 5
A Nevada licensee who commingles a client's trust funds with the broker's own operating funds has most directly violated rules concerning:
Answer: B. Commingling client trust funds with the broker's own money is a violation of Nevada's trust account handling requirements and may subject the licensee to discipline.
Question 2 of 5
A Nevada salesperson deposits a buyer's earnest money into the salesperson's personal checking account 'just temporarily' to cover the broker's vacation. This is BEST described as which prohibited act?
Answer: A. Client funds such as earnest money must be handled through the broker's trust/escrow account, not a licensee's personal account. Mixing client money with personal funds is commingling, and using it is conversion. Both are grounds for discipline regardless of intent to return it.
Question 3 of 5
Mixing a client's trust funds with a broker's own operating money in Nevada is best described as:
Answer: B. Commingling client trust funds with the broker's personal or business funds is prohibited and is grounds for discipline by the Division.
Question 4 of 5
A member of the public obtains a final court judgment against a Nevada licensee for fraud committed in a real estate transaction but cannot collect because the licensee has no assets. What may the injured person pursue?
Answer: A. Nevada maintains the Real Estate Education, Research and Recovery Fund. A consumer who has an unsatisfied final judgment against a licensee arising from a covered real estate transaction may apply to recover actual damages from the Fund, subject to statutory per-transaction and per-licensee caps. The licensee's license is typically suspended until the Fund is reimbursed.
Question 5 of 5
Who has the authority to discipline a Nevada licensee for violations of real estate law, including suspending or revoking a license?
Answer: B. Disciplinary authority over Nevada licensees rests with the Real Estate Division and the Nevada Real Estate Commission, which can impose sanctions including suspension or revocation.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- NRED and the Nevada Real Estate Commission may investigate complaints and discipline licensees for violations of license law and regulations.
- Disciplinary actions can include license denial, suspension, or revocation.
- The Commission may impose administrative fines per violation in addition to other sanctions.
- Common grounds include misrepresentation, fraud, commingling or conversion of client funds, and conduct constituting cause for discipline under the license law.
- Licensees are entitled to notice and an administrative hearing before discipline becomes final, with judicial review available.
- Nevada maintains a Real Estate Education, Research and Recovery Fund to compensate eligible members of the public for losses from a licensee's fraud, misrepresentation, or deceit.
- Recovery from the Fund generally requires a court judgment against the licensee and an unsatisfied collection effort, subject to statutory limits per transaction and per licensee.
- When the Fund pays a claim on a licensee's behalf, that licensee's license is typically suspended until the Fund is repaid with interest.
Nevada License Discipline, Penalties & Recovery Fund: FAQs
Is Nevada License Discipline, Penalties & Recovery Fund on the real estate exam?
Yes. State License Law is a scored domain on the Nevada 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 Nevada test this differently?
Nevada applies its own license law on top of the national portion. This page covers the Nevada rules specifically, which is what the state section of your exam tests.
