NCREC-Broker-N Exam Dumps and Practice Questions

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

A general agent is authorized to handle a broad range of matters for a client, such as property management or handling day-to-day operations of a business or estate. In this case, the broker is managing all aspects of the investor's real estate portfolio, which qualifies as a general agency relationship. A special agent performs only specific tasks (like listing or selling a single property), and a universal agent has unlimited authority, which is rare. Therefore, the correct answer is B.

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For a contract to be valid and enforceable, all parties must have legal capacity at the time of signing. If the buyer can prove they were legally incompetent due to mental illness at the time of execution, they may have the right to void the contract---even if they later regained competence. Temporary or situational incompetence at the time of contract formation is legally sufficient to make the contract voidable. Therefore, the correct answer is D.

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Capital gain is determined by subtracting the adjusted basis (original cost plus improvements minus depreciation) from the amount realized (selling price minus selling costs). This matches Amount Realized -- Adjusted Basis as per the Broker N Financing and Taxation section.

Commingling is the illegal act of mixing a client's funds---such as earnest money---with the broker's personal or business funds. North Carolina law strictly prohibits brokers from depositing trust money (like earnest deposits) into the firm's general operating account. In this case, the broker used the funds to pay rent, which could also constitute conversion (intentional misuse). But since the question specifically addresses the deposit, the correct answer is B -- commingling.

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