A contingency is a clause in a contract that makes the agreement dependent upon a certain event or action occurring before the contract becomes fully binding. Common examples include financing, appraisal, or home inspection contingencies. An amendment modifies an existing contract, an option gives a party the right but not the obligation to act, and a stipulation may refer to a general condition but not necessarily a legal contingency. Therefore, the correct answer is B.

In North Carolina, and in most states, ad valorem (real estate) property tax liens have “superior lien” status. They take precedence over all other liens, regardless of recording date. This includes mortgage liens and judgment liens. Therefore, even if a mortgage was recorded first, a property tax lien takes priority. Correct answer: A.

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North Carolina license law requires brokers to ensure their client receives a detailed closing statement. Even if the attorney or settlement agent prepares the statement, the broker must review it for accuracy and notify all parties of any errors. Failure to do so may result in disciplinary action.

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Step 1: Determine assessed value

Market value = $630,000

Assessment rate = 50%

Assessed value = $630,000 × 0.50 = $315,000

Step 2: Calculate tax

Tax rate = $32 per $1,000

$315,000 ÷ $1,000 = 315

315 × $32 = $10,080

However, this result matches option C. Therefore:

Answer: C

Corrected Final Answer: C. $10,080

Explanation Confirmed: Assessed value is 50% of $630,000 = $315,000. Tax at $32 per $1,000 means $315 × $32 = $10,080. Correct answer is C.

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In a gross lease, the tenant pays a fixed rent amount, and the landlord is responsible for property taxes, insurance, and maintenance costs. This type of lease is common in residential rentals and contrasts with a net lease, where the tenant pays some or all ownership costs. A graduated lease involves rent increases at intervals, and a percentage lease involves paying rent based on the tenant’s gross business income. Therefore, the correct answer is B, gross lease.

North Carolina provisional brokers are required to complete three postlicensing courses, each 30 hours in length, for a total of 90 hours. These must be completed within 18 months of licensure. Failure to complete these results in the license status being changed to inactive—not revoked. Additionally, postlicensing is not required to activate a license initially, but must be completed to remove the “provisional” status. Therefore, the correct answer is C.

Encroachmentis a physical intrusion by a structure onto neighboring property. A garage that crosses property lines without permission is the textbook definition of encroachment, matching optionD. Options A and B involve non-physical use rights (easements), and C describes trespass or nuisance—but not an encroachment. Thus,Dis accurate per NCREC definitions.

The total commission earned was 7% of the final sales price ($695,000 × 0.07 = $48,650).

The cooperating (buyer’s) broker received 3% ($695,000 × 0.03 = $20,850).

The listing brokerage firm retained the difference:

$48,650 – $20,850 = $27,800.

So, the listing firm earned $27,800 — answer C.

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An option contract gives the buyer (optionee) the exclusive right, but not the obligation, to purchase a property at a predetermined price within a specified time. The seller (optionor), however, is bound by the terms of the contract and must sell if the buyer exercises the option. Consideration (often a non-refundable option fee) is required to make the option enforceable. Therefore, the seller is obligated to sell if the buyer chooses to exercise the option, making statement B true.

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A slab-on-grade foundation is a flat concrete slab poured directly on the ground, often used in warmer climates where ground freezing is not an issue. It supports the building structure directly and does not include a crawl space or basement. Pier and beam and post and beam refer to elevated structures, while platform construction refers to framing, not the foundation. Therefore, the correct answer is D.

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