License Law and DRE Regulation Practice Question
Question
A listing agent notices a potential compliance issue involving recovery fund. Which statement best describes recovery fund? (Item 28)
Answer choices
- A. It is controlled only by local custom rather than by law, contract, or professional duty.
- B. It is valid only when the buyer pays cash and no lender is involved.
- C. It prevents any later disclosure, even when new facts become known.
- D. Recognize consumer compensation concepts for certain licensee misconduct judgments.
Correct Answer
D. Recognize consumer compensation concepts for certain licensee misconduct judgments.
Explanation
The correct answer is D because recovery fund requires candidates to recognize consumer compensation concepts for certain licensee misconduct judgments. 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: License Law and DRE Regulation
- Objective: recovery fund