Agency Relationships and Disclosures Practice Question
Question
A salesperson is explaining a concept to a client involving fiduciary duty of disclosure. What should a California real estate licensee understand? (Item 2)
Answer choices
- A. It can be ignored if the transaction is expected to close quickly.
- B. Disclose material facts known to the agent that affect the client’s decision.
- C. It requires the licensee to favor the other party over the licensee’s own client.
- D. It is primarily a tax rule with no effect on brokerage practice.
Correct Answer
B. Disclose material facts known to the agent that affect the client’s decision.
Explanation
The correct answer is B because fiduciary duty of disclosure requires candidates to disclose material facts known to the agent that affect the client’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: easy
- Domain: Agency Relationships and Disclosures
- Objective: fiduciary duty of disclosure