National Real Estate Practice Exam

What is the nature of a license in real estate?

1. An ownership right to property

2. A temporary privilege that is non-assignable

3. A type of lease agreement

4. Automatically renewable agreement

The correct answer is: A temporary privilege that is non-assignable

In the context of real estate, a license refers to a permit granted by a governing authority that allows an individual to engage in certain activities related to real estate transactions. This is considered a temporary privilege because it is granted for a specific duration and under certain conditions. The nature of a license in real estate is inherently non-assignable, meaning that the privilege cannot be transferred or assigned to another individual without the consent of the governing body that issued the license. This ensures that only the licensed individual is authorized to practice and that adherence to regulations is maintained. The other choices do not accurately reflect the nature of a real estate license. Licenses do not grant ownership rights to property, nor do they represent a type of lease agreement. Additionally, they are not automatically renewable; rather, licenses typically require renewal at specified intervals and may involve meeting continuing education or other requirements to maintain the privilege.