Disclosures & Environmental Practice Questions
This national area is 9 scored items on the Texas Sales Agent exam: 5 on property conditions and environmental issues, and 4 on disclosure obligations and liability. It covers the exact federal laws, hazards, assessments, and disclosure scenarios named in the current Pearson VUE outline.
Exam prep only
These questions test three moves: identify the property or environmental condition, attach the correct law or review, and decide what the seller or license holder must disclose.
Use the condition-rule-duty read. Keep Phase I, Phase II, and an environmental impact statement separate. Keep CERCLA hazardous substances separate from petroleum UST regulation. Then ask who knew the material fact and whether a precise statutory no-duty rule applies.
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Disclosures & Environmental Practice Questions
16 scenario-based questions on disclosures & environmental, scored, each with a full explanation after you answer. Every question is also written out below if you would rather study at your own pace.
Every question explained
Prefer to study at your own pace? Here are all 16 questions. Read each one and pick your answer, then reveal the correct answer, the reasoning, and the trap that catches most candidates.
1. A seller has never tested a 1975 home for lead-based paint. Before the buyer becomes obligated, what does federal law require?
- A.The seller must test every painted surface
- B.The seller must disclose the lack of known lead information, provide available records and the current EPA pamphlet, include the warning, and give the buyer the inspection opportunity
- C.The seller must remove all original paint
- D.Nothing, because the seller lacks test results
Show answer and explanation
Correct answer: B. The seller must disclose the lack of known lead information, provide available records and the current EPA pamphlet, include the warning, and give the buyer the inspection opportunity
Why B is correct: Most pre-1978 target housing is covered even when the seller has no test results. The rule requires known-information disclosure, available records, the pamphlet, contract warnings and acknowledgments, and a purchaser opportunity to inspect. It does not require testing or abatement.
Trap: No knowledge does not remove the paperwork. The federal rule requires disclosure, not testing.
Source: 40 C.F.R. §§745.107, 745.110, 745.113
2. Which statement correctly distinguishes radon guidance from a transaction mandate?
- A.EPA's 4 pCi/L action level requires every seller to test before closing
- B.EPA recommends fixing a home at 4 pCi/L, but federal law does not require every home sale to include a radon test
- C.Radon is a fibrous building material
- D.Radon can be identified by smell
Show answer and explanation
Correct answer: B. EPA recommends fixing a home at 4 pCi/L, but federal law does not require every home sale to include a radon test
Why B is correct: Radon is a colorless and odorless radioactive soil gas. EPA recommends mitigation at 4 pCi/L and consideration between 2 and 4 pCi/L, but that health guidance is not a nationwide sale-testing requirement.
Trap: Do not convert an EPA action level into a universal transaction mandate.
Source: 15 U.S.C. §2661 et seq.; EPA radon guidance
3. A facility plans to discharge pollutants from a pipe into covered surface water. Which federal law and permit program are the closest match?
- A.Clean Air Act and NAAQS
- B.Clean Water Act and NPDES
- C.CERCLA and the National Priorities List
- D.Title X and the lead warning statement
Show answer and explanation
Correct answer: B. Clean Water Act and NPDES
Why B is correct: The Clean Water Act generally regulates point-source pollutant discharges through the National Pollutant Discharge Elimination System. The Clean Air Act addresses air emissions and ambient air-quality standards.
Trap: Match the medium first: water discharge points to the Clean Water Act.
Source: 33 U.S.C. §§1251, 1342; 42 U.S.C. §7401
4. A developer wants to place fill in an area confirmed to be federally regulated wetlands. What is the central federal issue?
- A.A Clean Water Act Section 404 permit for the discharge of fill
- B.A lead inspection under Title X
- C.A Clean Air Act mobile-source test
- D.A seller's deed warranty
Show answer and explanation
Correct answer: A. A Clean Water Act Section 404 permit for the discharge of fill
Why A is correct: Section 404 addresses discharges of dredged or fill material into covered waters. The Army Corps issues most permits, with EPA standards and oversight. Jurisdiction and exemptions remain fact-specific.
Trap: A wetland issue is not automatically a building ban, but fill can require a Section 404 permit.
Source: 33 U.S.C. §1344; 40 C.F.R. Part 230
5. Which statement about all appropriate inquiries is accurate?
- A.A Phase I automatically immunizes the buyer from CERCLA
- B.AAI generally must be completed within one year before acquisition, with specified components conducted or updated within 180 days
- C.AAI is completed after closing
- D.AAI requires every Phase I to collect groundwater samples
Show answer and explanation
Correct answer: B. AAI generally must be completed within one year before acquisition, with specified components conducted or updated within 180 days
Why B is correct: EPA's AAI rule uses a one-year window and a 180-day freshness rule for specified components. A Phase I may support AAI, but the buyer still has to satisfy the relevant statutory protection and continuing obligations.
Trap: Phase I supports a process. It is not a stand-alone immunity certificate.
Source: 40 C.F.R. §§312.20, 312.21; 42 U.S.C. §9601(35)
6. Which review normally uses targeted soil or groundwater sampling to investigate a concern identified during due diligence?
- A.Phase I Environmental Site Assessment
- B.Phase II Environmental Site Assessment
- C.Environmental Impact Statement
- D.FEMA flood map review
Show answer and explanation
Correct answer: B. Phase II Environmental Site Assessment
Why B is correct: A Phase II uses targeted sampling and laboratory analysis. A Phase I is primarily nonintrusive historical and site review. An EIS evaluates the effects and alternatives of a proposed major federal action under NEPA.
Trap: Phase II samples. Phase I reviews. An EIS is a federal-action document.
Source: 40 C.F.R. §312.21; 42 U.S.C. §4332(C)
7. A former service station has a leaking gasoline underground storage tank. Which statement is most accurate?
- A.Petroleum is always an ordinary CERCLA hazardous substance
- B.The release is commonly addressed under the UST program authorized by RCRA Subtitle I and state law
- C.The leak creates no cleanup exposure
- D.The sales agent should collect soil samples
Show answer and explanation
Correct answer: B. The release is commonly addressed under the UST program authorized by RCRA Subtitle I and state law
Why B is correct: CERCLA generally excludes petroleum. Federal UST rules are primarily authorized by RCRA Subtitle I, with state programs playing a central role. Nonpetroleum hazardous substances may create separate issues.
Trap: Petroleum exclusion does not mean no liability. It changes the usual regulatory pathway.
Source: 42 U.S.C. §§6991, 9601(14); 40 C.F.R. Part 280
8. Under CERCLA Section 107, which person is one of the four potentially responsible party classes?
- A.Only a person proved negligent
- B.The current owner or operator of the facility
- C.Every neighboring homeowner
- D.Only a governmental agency
Show answer and explanation
Correct answer: B. The current owner or operator of the facility
Why B is correct: The four classes include current owners or operators, owners or operators at the time of disposal, arrangers, and transporters who selected the site. CERCLA liability is strict and retroactive, and may be joint and several when the harm is indivisible.
Trap: Current ownership can matter even when someone else caused the release.
Source: 42 U.S.C. §9607(a)
9. A seller secretly knows about lead hazards in a covered pre-1978 home but withholds that information from the listing agent after the agent explained the federal duties. Under the federal rule, the agent
- A.is automatically liable for every fact the seller concealed
- B.is not liable for seller-known information withheld from the agent if the agent informed the seller of the obligations
- C.may skip the rest of the federal disclosure process
- D.must personally test the paint
Show answer and explanation
Correct answer: B. is not liable for seller-known information withheld from the agent if the agent informed the seller of the obligations
Why B is correct: An agent must inform the seller or lessor and ensure compliance. Section 745.115(b) protects the agent from liability for owner-known information not disclosed to the agent after the agent properly informs the owner.
Trap: Agent responsibility is real, but it is not automatic liability for a seller's secret information.
Source: 40 C.F.R. §745.115
10. A Texas listing agent knows about a significant foundation defect hidden below new flooring. The seller orders the agent to remain silent. What should the agent do?
- A.Follow the instruction because confidentiality controls
- B.Disclose the known significant defect and involve the sponsoring broker
- C.Wait for the buyer's inspector to discover it
- D.Deny knowledge if asked
Show answer and explanation
Correct answer: B. Disclose the known significant defect and involve the sponsoring broker
Why B is correct: TREC may discipline a license holder for failing to disclose a known defect that would be significant to a buyer, including a known significant latent structural defect. A client cannot require illegal concealment.
Trap: Inspection rights do not excuse hiding a known latent defect.
Source: Tex. Occ. Code §1101.652(b)(3), (4)
11. A transfer is exempt from the seller's disclosure notice under Texas Property Code Section 5.008(e). The agent knows about a significant hidden defect. Which statement is correct?
- A.The exemption lets the agent conceal the defect
- B.The seller's notice exemption and the agent's independent disclosure duty are separate
- C.The buyer loses all inspection rights
- D.The defect becomes immaterial
Show answer and explanation
Correct answer: B. The seller's notice exemption and the agent's independent disclosure duty are separate
Why B is correct: Section 5.008(e) can exempt a seller from that notice, but it does not erase the license holder's separate duty under Section 1101.652 concerning known significant defects.
Trap: Form exemption is not permission to conceal.
Source: Tex. Prop. Code §5.008(e); Tex. Occ. Code §1101.652(b)(3)
12. A previous occupant died by suicide in a Texas home. Under Property Code Section 5.008(c), the seller and seller's agent
- A.must disclose the suicide before every sale
- B.have no duty to disclose the suicide
- C.must disclose it only if the buyer asks
- D.must order an environmental assessment
Show answer and explanation
Correct answer: B. have no duty to disclose the suicide
Why B is correct: Section 5.008(c) expressly removes the duty for a death by natural causes, suicide, or an accident unrelated to the property's condition. A dangerous property condition that caused an accident remains a separate issue.
Trap: Use the exact statutory list. Do not generalize it to every death.
Source: Tex. Prop. Code §5.008(c)
13. A buyer asks whether registered sex offenders live near a Texas home. What is the best response?
- A.Guarantee there are none
- B.Refer the buyer to the current Texas DPS public registry
- C.Compile an unofficial list from memory
- D.Describe the neighborhood as safe
Show answer and explanation
Correct answer: B. Refer the buyer to the current Texas DPS public registry
Why B is correct: Texas Code of Criminal Procedure Article 62.056(e) removes the specified real estate disclosure duty. The current official registry is more reliable than an agent's assurance or private list.
Trap: The precise Texas authority is Article 62.056(e), not a generic slogan about Megan's Law.
Source: Tex. Code Crim. Proc. art. 62.056(e)
14. A seller withholds a known defect intending to induce a buyer who would not have purchased if told. Which Texas provision most directly addresses that nondisclosure pattern?
- A.DTPA Section 17.46(b)(24)
- B.Clean Water Act Section 404
- C.CERCLA Section 107
- D.The lead RRP rule
Show answer and explanation
Correct answer: A. DTPA Section 17.46(b)(24)
Why A is correct: Section 17.46(b)(24) addresses known information withheld with intent to induce a transaction the consumer would not otherwise enter. The DTPA professional-services exemption does not remove this listed conduct.
Trap: Knowledge, intent to induce, and the consumer's decision are all part of this rule.
Source: Tex. Bus. & Com. Code §§17.46(b)(24), 17.49(c)(2)
15. An obvious roof hole is a patent defect. The listing agent knowingly tells the buyer the roof is sound. Which statement is best?
- A.A patent defect makes a false statement acceptable
- B.The visible condition does not excuse misrepresentation
- C.Only latent defects can ever be material
- D.The buyer must accept the statement because the hole was visible
Show answer and explanation
Correct answer: B. The visible condition does not excuse misrepresentation
Why B is correct: Latent defects create a strong nondisclosure problem, but the license holder may not misrepresent an open condition. Visibility does not authorize a false assurance.
Trap: Patent does not mean permission to lie.
Source: Tex. Occ. Code §1101.652(b)(2), (3)
16. A seller knowingly violates the federal lead disclosure rule, causing the buyer damages. Which statement is accurate?
- A.The rule has no civil remedy
- B.A knowing violation may support recovery of three times the buyer's damages, in addition to other enforcement
- C.Only the sales agent can be liable
- D.The buyer's only remedy is a Phase II assessment
Show answer and explanation
Correct answer: B. A knowing violation may support recovery of three times the buyer's damages, in addition to other enforcement
Why B is correct: The federal regulation provides civil liability and allows a person injured by a knowing violation to recover three times the amount of damages. Government civil and criminal sanctions may also apply.
Trap: The rule has real enforcement consequences. It is not merely a suggested form.
Source: 40 C.F.R. §745.118
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Get the full question bankFrequently asked questions
How many disclosure and environmental questions are on the Texas exam?+
Property Disclosures and Environmental Issues is 9 scored items on the national portion: 5 on property conditions and environmental issues, and 4 on disclosure obligations and liability. Pearson assigns the area 5 knowledge, 3 application, and 1 analysis item.
When is lead-based paint disclosure required?+
Federal law requires lead-based paint disclosure for residential housing built before 1978. The seller must disclose known hazards, provide the EPA pamphlet, and give the buyer a 10-day opportunity to inspect for lead.
What kind of liability does CERCLA impose?+
CERCLA liability is strict and retroactive. It may be joint and several when environmental harm is indivisible. A Phase I can support all appropriate inquiries, but the owner must satisfy every element of the claimed protection and any continuing obligations.