Contracts, Transfer, and Escrow Practice Question

Question

A license applicant is studying a California practice scenario involving proration. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 178)

Answer choices

1. A. It shifts all responsibility to escrow and eliminates the broker’s duties.
2. B. Calculate or recognize allocation of recurring expenses at closing.
3. C. It makes oral promises enforceable in every real estate transaction.
4. D. It is optional whenever both parties verbally agree to proceed.

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

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