Under Proposition 13, California property is reassessed to current market value when:
Correct Answer
D) There is a change of ownership
Under Proposition 13, property is reassessed to full market value upon a change of ownership (sale or transfer). Annual increases are otherwise capped at 2%.
Why This Is the Correct Answer
There is a change of ownership is correct. Under Proposition 13, property is reassessed to full market value upon a change of ownership (sale or transfer). Annual increases are otherwise capped at 2%. Under Proposition 13, property is reassessed to full market value upon a change of ownership (sale or transfer). Annual increases are otherwise capped at 2%.
Why the Other Options Are Wrong
Option A: Every 5 years automatically
Properties are not automatically reassessed on a cycle. Assessment stays at base year value plus 2% annual increases.
Option B: The property owner makes improvements over $50,000
Improvements can affect assessed value for the new construction portion, but Proposition 13 reassessment to current market value is triggered by change in ownership.
Option C: The county assessor requests it
The assessor cannot unilaterally reassess to market value without a triggering event like a sale.
Memory Technique
CA -> ca-foreclosure-property-servicing-and-debt-collection
Exam Tip
Legacy California general items should be used sparingly; they are kept officially supported for existing content but new MLO growth should focus more on DFPI/DRE, CFL, CRMLA, covered-loan, and usury rules.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
More UST Questions
A Washington broker provides the federal settlement service estimates and booklet in 2026 and no separate state itemization. Can disclosures compliant with RESPA and Regulation X satisfy the state third-party itemization subsection?
Priya is comparing pre-license education providers before applying for a Florida mortgage loan originator license. How many hours of approved pre-license education must she complete in total?
An applicant is budgeting for a Florida MLO license and asks what the state application fee comes to at filing. Which figure is correct?
A newly sponsored Florida MLO is told she must buy an individual surety bond in her own name before she can originate. Is that correct?
A Washington consumer loan act licensee also brokers loans in 2026 outside the authority of that act. Does the consumer-loan-act exemption extend to mortgage brokerage outside that act’s authority?
A $200,000 Texas home equity loan has $3,700 in fees subject to the constitutional cap and a separate $600 fee for an appraisal performed by a third-party appraiser. Do the capped fees exceed the limit?
An owner applies for a Texas home equity loan on 4 May 2026 and the lender delivers the required notice on 8 May. Which date starts the constitutional 12-day waiting period for closing?
An owner closed a Texas home equity loan on 3 February 2026 and wants a second one on the same homestead in November 2026. Assuming no declared-emergency exception applies and the earlier home equity lien will be paid off, may the new loan close in November?
A Texas home equity loan forecloses and the sale leaves the lender $62,000 short of the balance owed. Absent actual fraud in obtaining the credit, may the lender recover the shortfall personally from the owner or spouse?
A Washington real estate broker helps a 2026 buyer arrange financing and takes only the usual sales commission. Does financing assistance incidental to a bona fide sale for only the customary real-estate commission fall within the exemption?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam