License Law and DRE Regulation Practice Question
Question
A salesperson is explaining a concept to a client involving conversion. What should a California real estate licensee understand? (Item 115)
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. Recognize unauthorized use of client funds as a serious violation.
- D. It prevents any later disclosure, even when new facts become known.
Correct Answer
C. Recognize unauthorized use of client funds as a serious violation.
Explanation
The correct answer is C because conversion requires candidates to recognize unauthorized use of client funds as a serious violation. 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: conversion