License Law and DRE Regulation Practice Question
Question
A first-time buyer asks for exam-focused clarification involving conversion. What should a California real estate licensee understand? (Item 10)
Answer choices
- A. It is valid only when the buyer pays cash and no lender is involved.
- B. Recognize unauthorized use of client funds as a serious violation.
- C. It prevents any later disclosure, even when new facts become known.
- D. It applies only to commercial property and never to residential transactions.
Correct Answer
B. Recognize unauthorized use of client funds as a serious violation.
Explanation
The correct answer is B 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: hard
- Domain: License Law and DRE Regulation
- Objective: conversion