Disclosures & Environmental Practice Questions
This national area is 9 scored items on the Texas Sales Agent exam. It covers property-condition and environmental hazards, the federal statutes that govern them, and a license holder's disclosure obligations and liability. Work the questions below, then read every explanation.
Exam prep only
Disclosure and environmental questions test two things: which hazard is described, and which federal rule governs it. Lead-based paint, asbestos, radon, and CERCLA liability come up the most.
Use the hazard-then-rule read. First identify the hazard, then attach the federal statute or disclosure requirement that governs it. Many traps confuse what federal law requires with what is left to state law.
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Disclosures & Environmental Practice Questions
15 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 15 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 is selling a home built in 1975. Under federal law, the seller and the listing agent must
- A.say nothing, because lead paint disclosure is optional
- B.provide a lead-based paint disclosure and the EPA pamphlet, and offer the buyer a 10-day inspection opportunity
- C.test the home for lead before listing it
- D.remove all lead paint before closing
Show answer and explanation
Correct answer: B. provide a lead-based paint disclosure and the EPA pamphlet, and offer the buyer a 10-day inspection opportunity
Why B is correct: Federal law requires lead-based paint disclosure for housing built before 1978. The seller must disclose known lead hazards, provide records and the EPA pamphlet, and give the buyer a 10-day opportunity to conduct a lead inspection. Testing or removal is not required.
Trap: The trigger is housing built before 1978, and the buyer gets a 10-day inspection window. Testing and removal are not federally required.
Source: Federal Residential Lead-Based Paint Hazard Reduction Act (Title X)
2. Asbestos in older buildings poses the greatest health risk when it is
- A.sealed inside walls
- B.friable, meaning it can crumble and release fibers into the air
- C.painted over
- D.located in the attic
Show answer and explanation
Correct answer: B. friable, meaning it can crumble and release fibers into the air
Why B is correct: Asbestos is most dangerous when it is friable, meaning it can be crumbled by hand and release fibers into the air. Intact, sealed asbestos is generally less hazardous than friable material that is disturbed.
Trap: Friable asbestos is the dangerous form. Sealed, undisturbed asbestos is a lower risk.
Source: Environmental hazards; asbestos
3. A naturally occurring radioactive gas that seeps up from the ground and can accumulate in basements and lower levels is
- A.radon
- B.asbestos
- C.lead
- D.formaldehyde
Show answer and explanation
Correct answer: A. radon
Why A is correct: Radon is a naturally occurring radioactive gas produced by the breakdown of uranium in soil and rock. It can enter and accumulate in lower levels of a home, where high concentrations pose a health risk. Testing and mitigation systems address it.
Trap: Radon is a soil gas, not a building material. Asbestos and lead are materials; radon comes from the ground.
Source: Environmental hazards; radon
4. Under CERCLA (Superfund), the liability for cleaning up contamination is best described as
- A.limited to the party who caused the contamination
- B.strict, joint-and-several, and retroactive, so a current owner can be liable for a prior owner's contamination
- C.applicable only to commercial property
- D.waived if the buyer did not know about the contamination
Show answer and explanation
Correct answer: B. strict, joint-and-several, and retroactive, so a current owner can be liable for a prior owner's contamination
Why B is correct: CERCLA imposes strict, joint-and-several, and retroactive liability. A current owner can be held responsible for contamination caused by a prior owner, even without fault. The innocent-landowner defense requires appropriate pre-purchase due diligence.
Trap: CERCLA liability can attach to a current owner who never caused the contamination. The defense is proving due diligence.
Source: CERCLA (Superfund), as amended by SARA
5. To qualify for the innocent-landowner defense under CERCLA, a buyer generally must show
- A.that the property is residential
- B.that appropriate due diligence, such as a Phase I environmental site assessment, was performed before purchase
- C.that the purchase price was below market
- D.that the seller signed a disclosure
Show answer and explanation
Correct answer: B. that appropriate due diligence, such as a Phase I environmental site assessment, was performed before purchase
Why B is correct: The innocent-landowner defense requires the buyer to have made all appropriate inquiry before purchase, typically a Phase I environmental site assessment reviewing records and inspecting the site. If contamination is suspected, a Phase II involves sampling and testing.
Trap: Due diligence, not the property type or price, supports the innocent-landowner defense. Phase I is records and inspection.
Source: CERCLA; innocent-landowner defense
6. A property sits in a designated flood zone. The most likely consequence for a buyer obtaining financing is that
- A.the sale cannot close
- B.flood insurance will likely be required by the lender
- C.the property cannot be insured at all
- D.the buyer must elevate the structure
Show answer and explanation
Correct answer: B. flood insurance will likely be required by the lender
Why B is correct: Property in a designated flood zone typically requires flood insurance as a condition of a federally backed mortgage. The flood zone designation affects insurance, not the legality of the sale.
Trap: A flood zone usually triggers a flood insurance requirement, not a ban on selling or insuring the property.
Source: National Flood Insurance Program; flood zones
7. A license holder knows the home's foundation has a major structural defect that a buyer could not see during a normal walkthrough. The license holder must
- A.say nothing, because the buyer should hire an inspector
- B.disclose the known material defect that is not readily observable
- C.disclose it only if the buyer asks directly
- D.wait until after closing to disclose it
Show answer and explanation
Correct answer: B. disclose the known material defect that is not readily observable
Why B is correct: License holders must disclose known material defects that affect the value of the property and are not readily observable. A known, hidden structural defect must be disclosed. The license holder cannot conceal or misrepresent it.
Trap: Recommending an inspection does not excuse hiding a known defect. Known, hidden, value-affecting facts must be disclosed.
Source: Disclosure of material defects; license holder duties
8. An underground storage tank for heating oil is discovered leaking on a property. This is significant because it
- A.is never the current owner's responsibility
- B.can contaminate soil and groundwater and trigger cleanup liability
- C.automatically voids the sale
- D.is regulated only by local zoning
Show answer and explanation
Correct answer: B. can contaminate soil and groundwater and trigger cleanup liability
Why B is correct: A leaking underground storage tank can contaminate soil and groundwater, creating environmental cleanup liability. Such contamination falls under federal and state environmental oversight, including potential CERCLA-style liability for owners.
Trap: A leaking tank is a contamination source that can create owner liability, not a minor issue or a purely local matter.
Source: Environmental hazards; underground storage tanks
9. Under the federal lead-based paint rule, a buyer of a pre-1978 home must be given
- A.nothing special
- B.the lead-hazard pamphlet and a 10-day opportunity to inspect for lead-based paint
- C.a new roof
- D.a 30-day right to rescind any contract
Show answer and explanation
Correct answer: B. the lead-hazard pamphlet and a 10-day opportunity to inspect for lead-based paint
Why B is correct: For housing built before 1978, the seller and agent must disclose known lead-based paint, provide the EPA lead-hazard pamphlet, and give the buyer a 10-day period (unless waived) to conduct a lead-based paint inspection or risk assessment.
Trap: The lead rule applies to pre-1978 housing and includes a 10-day inspection opportunity, not a general right to rescind.
Source: Residential Lead-Based Paint Hazard Reduction Act (Title X)
10. Mold growth in a building is most associated with
- A.excess moisture
- B.low property taxes
- C.high ceilings
- D.new paint colors
Show answer and explanation
Correct answer: A. excess moisture
Why A is correct: Mold needs moisture to grow, so it is associated with water intrusion, leaks, and high humidity. Controlling moisture is the key to prevention and remediation. Known mold problems can be material facts.
Trap: Moisture drives mold. A known mold or water-intrusion problem may be a material fact requiring disclosure.
Source: Environmental hazards; mold
11. An owner wants to fill part of a federally regulated wetland on a parcel. Generally, the owner
- A.may fill it freely
- B.must obtain a permit before discharging fill material
- C.only needs the neighbor's approval
- D.must first sell the property
Show answer and explanation
Correct answer: B. must obtain a permit before discharging fill material
Why B is correct: Filling or discharging dredged or fill material into regulated wetlands generally requires a permit under Section 404 of the Clean Water Act. Wetlands restrictions can significantly limit how land is developed.
Trap: Wetlands are protected; filling them usually requires a federal permit, not just local approval.
Source: Clean Water Act §404; wetlands
12. A buyer asks an agent whether any registered sex offenders live nearby. The agent should
- A.guarantee the neighborhood is offender-free
- B.direct the buyer to the public sex-offender registry rather than provide a personal assurance
- C.refuse to answer and end the relationship
- D.make up an answer to close the deal
Show answer and explanation
Correct answer: B. direct the buyer to the public sex-offender registry rather than provide a personal assurance
Why B is correct: Information about registered offenders is available through public databases. An agent generally directs the buyer to the public registry rather than personally researching or guaranteeing the result, which avoids fair housing and accuracy pitfalls.
Trap: Point the buyer to the public registry. Do not personally guarantee or assume responsibility for that information.
Source: Megan's Law; public sex-offender registry
13. In Texas, the fact that a prior occupant died on the property by natural causes is generally
- A.a material defect that must be disclosed
- B.not a material fact that must be disclosed
- C.grounds to void any sale
- D.a federal disclosure requirement
Show answer and explanation
Correct answer: B. not a material fact that must be disclosed
Why B is correct: A death on a property by natural causes, suicide, or accident unrelated to the property's condition is generally not considered a material fact requiring disclosure in Texas. A known physical defect, by contrast, must be disclosed.
Trap: Stigma from a death is generally not a required disclosure, but a known physical defect always is.
Source: Texas disclosure law; stigmatized property
14. A Phase I Environmental Site Assessment primarily involves
- A.collecting and lab-testing soil and water samples
- B.a records review and site inspection to identify potential contamination, without sampling
- C.demolishing the building
- D.appraising the property's market value
Show answer and explanation
Correct answer: B. a records review and site inspection to identify potential contamination, without sampling
Why B is correct: A Phase I ESA is a non-intrusive review of records, history, and a site inspection to identify potential or existing contamination. It does not involve sampling. If concerns are found, a Phase II with sampling and testing may follow.
Trap: Phase I is records and inspection only. Sampling and lab testing belong to Phase II.
Source: Environmental due diligence; Phase I ESA
15. If a Phase I assessment reveals likely contamination, the next step is typically a Phase II assessment, which
- A.repeats the records review
- B.collects samples and performs laboratory testing to confirm and measure contamination
- C.is never necessary
- D.transfers liability to the buyer
Show answer and explanation
Correct answer: B. collects samples and performs laboratory testing to confirm and measure contamination
Why B is correct: A Phase II ESA follows a Phase I that identifies concerns. It involves taking samples (soil, groundwater, materials) and laboratory testing to confirm whether contamination exists and to what degree.
Trap: Phase II is the sampling-and-testing stage that follows a Phase I red flag.
Source: Environmental due diligence; Phase II ESA
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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 of the Texas Sales Agent exam. Expect questions on lead-based paint, asbestos, radon, CERCLA liability, flood zones, and a license holder's duty to disclose known material defects.
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 imposes strict, joint-and-several, and retroactive liability for contamination. A current owner can be liable for a prior owner's contamination. The innocent-landowner defense requires appropriate pre-purchase due diligence, such as a Phase I environmental site assessment.