Leasing and Property Management Practice Question
Question
A broker is supervising a transaction file involving trust funds in management. Which statement best describes trust funds in management? (Item 41)
Answer choices
- A. Recognize owner and tenant funds must be handled according to trust-fund rules.
- B. It can be ignored if the transaction is expected to close quickly.
- 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
A. Recognize owner and tenant funds must be handled according to trust-fund rules.
Explanation
The correct answer is A 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