Contracts, Transfer, and Escrow Practice Question

Question

A property manager is preparing a written response involving proration. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 158)

Answer choices

1. A. It prevents any later disclosure, even when new facts become known.
2. B. Calculate or recognize allocation of recurring expenses at closing.
3. C. It applies only to commercial property and never to residential transactions.
4. D. It is controlled only by local custom rather than by law, contract, or professional duty.

Correct Answer

B. Calculate or recognize allocation of recurring expenses at closing.

Explanation

The correct answer is B because proration requires candidates to calculate or recognize allocation of recurring expenses at closing. 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: medium
• Domain: Contracts, Transfer, and Escrow
• Objective: proration

Practice more

Start Contracts, Transfer, and Escrow practice

Back to Contracts, Transfer, and Escrow