Agency Relationships and Disclosures Practice Question
Question
A listing agent notices a potential compliance issue involving material facts. Which response best protects the client and keeps the transaction compliant? (Item 9)
Answer choices
- A. Recognize facts that could affect value, desirability, or a party’s decision.
- B. It prevents any later disclosure, even when new facts become known.
- C. It applies only to commercial property and never to residential transactions.
- D. It is controlled only by local custom rather than by law, contract, or professional duty.
Correct Answer
A. Recognize facts that could affect value, desirability, or a party’s decision.
Explanation
The correct answer is A because material facts requires candidates to recognize facts that could affect value, desirability, or a party’s decision. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: hard
- Domain: Agency Relationships and Disclosures
- Objective: material facts