Leasing and Property Management Practice Question
Question
A seller is reviewing documents before accepting an offer involving trust funds in management. Which statement best describes trust funds in management? (Item 11)
Answer choices
- A. It is primarily a tax rule with no effect on brokerage practice.
- B. It removes the need for written disclosure if the licensee believes the client already knows.
- C. Recognize owner and tenant funds must be handled according to trust-fund rules.
- D. It can be ignored if the transaction is expected to close quickly.
Correct Answer
C. Recognize owner and tenant funds must be handled according to trust-fund rules.
Explanation
The correct answer is C because trust funds in management requires candidates to recognize owner and tenant funds must be handled according to trust-fund rules. 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: Leasing and Property Management
- Objective: trust funds in management