Fair Housing and Practice Practice Question

Question

A listing agent notices a potential compliance issue involving risk management documentation. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 28)

Answer choices

1. A. It requires the licensee to favor the other party over the licensee’s own client.
2. B. It is primarily a tax rule with no effect on brokerage practice.
3. C. It removes the need for written disclosure if the licensee believes the client already knows.
4. D. Use written records and timely disclosures to reduce transaction risk.

Correct Answer

D. Use written records and timely disclosures to reduce transaction risk.

Explanation

The correct answer is D because risk management documentation requires candidates to use written records and timely disclosures to reduce transaction risk. 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: Fair Housing and Practice
• Objective: risk management documentation

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