Iowa Real Estate Practice Exam

Who must provide disclosure even in exempt transactions under the Property Condition Disclosure Act?

1. Residential property investor

2. Real estate licensee selling a three-unit residential property

3. Commercial property owner

4. Property manager

The correct answer is: Real estate licensee selling a three-unit residential property

The correct choice is related to the unique responsibilities of real estate licensees in Iowa. Under the Property Condition Disclosure Act, certain exempt transactions still require specific disclosures to ensure transparency and protect all parties involved. Real estate licensees are considered professionals in the property market and are tasked with upholding ethical standards and compliance with state regulations. Even when a property falls under the exempt categories, such as certain transactions involving new construction or foreclosures, real estate licensees have a duty to provide disclosures regarding the condition of the property. This obligation helps maintain the integrity of the real estate market and ensures that potential buyers are informed about any issues that may affect their purchase decision. In contrast, other roles, like residential property investors or commercial property owners, typically do not hold the same disclosure obligations in exempt transactions, particularly if they are not acting in a professional capacity or not licensed. Property managers may also not be individuals responsible for providing disclosures related to the sale or transfer of property. Therefore, the emphasis on the role of a licensed real estate agent explains why this choice is appropriate within the context of the question.