Iowa Real Estate Practice Exam

Under what circumstance may the commission deny the issuance or renewal of a real estate license?

1. If the applicant has not completed a certain number of transactions

2. Upon receipt of notice that the applicant is in default of a college student loan

3. If the applicant has a criminal record

4. If the applicant does not have a sponsoring broker

The correct answer is: Upon receipt of notice that the applicant is in default of a college student loan

The issuance or renewal of a real estate license can be denied upon receipt of notice that the applicant is in default of a college student loan because financial responsibility is a critical factor that regulatory commissions consider. If an applicant is unable to meet their debt obligations, it raises concerns about their overall reliability and ethical standards, which are vital in maintaining the integrity of the real estate profession. This criterion is aimed at ensuring that licensed individuals are financially sound, reflecting positively on the industry and protecting public trust. The other scenarios, while they could raise concerns, do not specifically align with the guidelines established for license denial. Transaction volume is often achievable through ongoing practice; having a criminal record may be considered depending on the nature and recency of the offense; and lacking a sponsoring broker has alternatives and does not preclude the possibility of obtaining a license in certain cases. Each of these factors may be examined but the default on a student loan provides a strong basis for denial due to its implications regarding financial responsibility.